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📝 Intro

Reviews and ratings from customers are crucial for success.

We’ve seen in previous insights that:

• Whether the first review of a product is positive or negative starts a chain reaction that can decide the fate of your product.

• Some negative reviews improve perceptions of products, rather than undermining them - when they are irrelevant to the product’s core features.

• Non-perfect ratings of between 4 and 4.5 stars drive more sales than near-perfect ones of between 4.5 and 5 stars.

We even saw how you should respond to public complaints on social media (reply once, then take the conversation private).

But what happens when you respond to reviews - or don’t?

This study from University of Southern California and Boston University analyzed 806,342 reviews from 3,264 hotels to find out.

P.S.: Shoutout to Demand Curve for covering several of Ariyh’s insights in their Growth Newsletter.

They do a great job at finding and explaining advanced marketing tactics to test. Just like Ariyh, it’s not for beginners. I’ve become a fan. You can check out their newsletter here.

P.P.S.: Today’s newsletter went out later than usual due to a technical glitch. Thank you for your patience! (remember, thank you is better than sorry).

Responding to reviews increases the number of reviews and their average rating

Impacted metrics: Customer acquisition
Channels: Reviews
For: B2C
Research date: August 2017

📈 Recommendation

Reply to all customer reviews, both positive and negative ones, in places that allow it (e.g. TripAdvisor, Google, Facebook, Yelp).

Expect more positive reviews and fewer - but longer and more detailed - negative reviews.

🎓 Findings

• Responding to customer reviews increases positive reviews, reduces negative reviews, and increases the overall number of reviews.

• An analysis of all hotels in Texas that had reviews on both TripAdvisor and Expedia found that when companies started to respond to reviews:

  • Star ratings increase 0.12, on average.

  • Total reviews increased 12%

  • There were fewer negative reviews, but the negative reviews became longer

• The effect seems to be stronger for independent hotels that are not part of a chain.

🧠 Why it works

• When companies respond to reviews, it changes the way we leave reviews in two ways.

• First, it makes it more appealing to leave a positive review because we know that the company will read it. So we’re more likely to make the effort of writing one.

• Second, it makes it more difficult to leave a negative review because we know the company will scrutinize it and respond. So:

  • Our negative feedback needs to be defensible and detailed enough to be credible. This is why negative reviews become longer, on average

  • We may just give up and not put in the extra effort, which reduces the number of negative reviews

✋ Limitations

• This research focused exclusively on hotels and the impact of answering reviews on TripAdvisor. However, the drivers of this effect should also exist in other contexts too. For example, previous studies on eBay found that people are less likely to give negative feedback when the other party can give feedback too.

• This study did not analyze which types of responses are better than others. However, other studies found that lengthy responses perform the best.

🏢 Companies using this

• Most major review platforms, including TripAdvisor, Google, Booking.com, Facebook, and Yelp, allow companies to respond.

• 31.5% of TripAdvisor reviews had a response from the company. Only 2.3% of reviews on Expedia had one (data from 2013).

• Due to how star ratings are rounded on TripAdvisor (e.g. if the rating goes from 4.24 to 4.26 the restaurant goes from 4 to 4.5 stars), 27% of hotels in the study gained at least half a star within six months of starting to respond to reviews.

• Farmhouse Kitchen Thai Cuisine restaurant in San Francisco is a good, randomly chosen, example of a restaurant that consistently responds to reviews on Yelp.

⚡ Steps to implement

• Actively monitor reviews and try to respond to them within 1 or 2 days. The earlier you respond, the more exposure your reply will have.

• Don’t just respond with “Thank you”. People will read your responses.

  • If reviews are positive, try to build on key things the reviewer said, so they feel heard and you highlight the benefits for others (e.g. “I’m glad you loved the shower, we renovated them last year!”).

  • If reviews are negative, try to address the concerns (e.g. “That should not have happened, I’ve asked our maintenance team to check it right now.”).

• Using “I” and signing your name when responding (e.g. “I’m very happy you enjoyed your stay”) is probably much more effective than using “We” (the company; e.g. “We’re very happy”).

🔍 Study type

Market observation (analysis of 806,342 reviews on TripAdvisor and Expedia of hotels in Texas between August 2001 and December 2013).

📖 Research

Online reputation management: Estimating the impact of management responses on consumer reviews. Marketing Science (August 2017).

🏫 Researchers

• Davide Proserpio. Marshall School of Business, University of Southern California.

• Georgios Zervas. Questrom School of Business, Boston University

Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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