Why is social media important: Revisiting Online Reviews

The spread of eWOM and the travelers’ practice to post online hotel reviews can be both an opportunity and a threat for travel suppliers. T...

The spread of eWOM and the travelers’ practice to post online hotel reviews can be both an opportunity and a threat for travel suppliers. Travel companies can try to manage both positive customers’ messages and vindictive negative WOM generated by a service failure, interacting with them on travel review sites. This means replying to guests’ feedbacks in order to create moral engagement (He and Harris 2014). Hotels, for example, could apologize about a service inefficiency appeasing angry customers.

Academic research has tried to understand how to manage this content. As highlighted in the blog post earlier about eWOM, a great deal of academic studies supports the idea that online reviews have become a powerful decision-making resource for consumers.

why is social media important


However, we notice an ongoing discussion about the opportunity to engage with customers (or presumed consumers)48 on travel review websites. A stream of research considers online reviews as an opportunity rather than a threat for travel suppliers (Litvin et al. 2008) and a new marketing tool (Dellarocas 2003) that allow to post product information, to chat and to interact with customers. Given that the most common way to interact with travel reviewers is to respond to their feedbacks,
this research path supports the position that companies should strategically respond to online consumers’ reviews (Chen and Xie 2005, Dellarocas 2006; Zhu and Zhang 2010). These studies confirm that responses to negative online reviews can positively influence hotel customers’ attitudes and potential customers’ perceptions (Litvin and Hoffman 2012), purchasing intention and expectations (Ye et al. 2008; Xie et al. 2011), and review rating and review volume (Ye et al. 2010), while “no action strategy” may damage the company’s reputation (Lee and Song 2010).

Hotels response opportunity on travel review websites was not permitted until a few years ago. Indeed, TripAdvisor started to let hotels reply only recently after the strong requests of hoteliers. Despite this new opportunity, academics found that a very small part of hotels actually respond to online consumers’ feedbacks (O’Connor 2010; Park and Allen 2013). Moreover, even in case of reply, sometimes the methods of response employed by hotels are generally inconstant and incoherent (Park and Allen 2013).

We can identify some response approaches emerged by previous studies, in particular related to negative reviews. Companies may adopt a “defensive” or “accommodative” strategy (Marcus and Goodman 1991). The defensive approach contemplates organizational interest as a priority, while the accommodative one considers the complainers’ concerns first. Lee and Song (2010) added a third
method that is called “no action,” and found that sometimes taking no action against the negative review may provide a more favorable outcome than using a defensive strategy.

Another classification of corporate responses strategies identifies two main approaches: problem solving and strategic (Park and Allen 2013). In the first approach, online reviews are used in order to resolve customer complaints as quickly and efficiently as possible. In the second approach, a wider perspective is used that considers online review responses as a way to engage guests and online
users. In this second case, gathered information is used to create innovative services and improve existing ones.

Therefore, the central issue is not if the hotel should reply or not to online feedbacks but more likely how to reply. Mauri and Minazzi (2013) conducted an experimental study to investigate the impact of online hotel reviews on consumers decision-making and expectations. They tested the effect of hotel response presence compared to a scenario without responses.49 Results showed that hotels replies
presence can have a negative effect on purchase intentions. A possible explanation of this finding was identified to be the adoption of a too standardized and defensive response approach that can be perceived by users as advertising and then as less credible because not independent from the organization (Buttle 1998; Stern 1994). Furthermore, a too promotion-based approach could be interpreted as a way to manipulate and control online user-generated content and consumers’ opinions (Mauri and Minazzi 2013).

In the light of previous results, hotels responses should be elaborated not only considering valence. On the contrary, the hotel reply should change according to the type of product, the kind of information provided in the message (Chen and Xie 2008) and the context. Specific rather than generic management responses are perceived more favorably by travelers and can increase trust (Wei et al. 2013). Knowledge of the dimensions customers use to evaluate eWOM reported earlier can help companies to elaborate more authentic and personalized responses.

Adopting the classification of Park and Allen (2013), firms that intend to optimize WOM management should develop a strategic approach that can offer more benefits, if properly handled, with dedicated resources. However, hotels sometimes do not have selected and trained staff in charge of this function (the activity can be also outsourced), with a consequently negative effect on accuracy, style, and consistency of responses (Park and Allen 2013).

Finally, a further complication that interferes with hotel operator response activity is sometimes a hotels managers’ lack of knowledge about information technologies (IT). As previously mentioned, IT and social media are mainly seen as an instrument to reach customers but rarely they are integrated into the company’s business strategy (Law and Jogaratnam 2005; Law et al. 2008). This influences the awareness of the positive effects eWOM management could have on business.

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