Paper ID
1747
Paper Type
full
Description
Online Customer Reviews (OCRs) belong to the most important marketing tools for online retailers, and have a significant impact on customers’ final purchase decision. This article adds new perspective on the favorable consequences of customer feedback and sheds light on the purchasing behavior of the OCR senders. Based on the self-perception theory, we study if an increased level of customer engagement makes reviewing customers more loyal compared to their non-reviewing counterparts. By linking a unique set of actual transaction data from online fashion covering more than 2.9 million orders from 0.4 million individual customers with more than 0.5 million submitted OCRs, we use a difference-in-difference (DID) approach as the method of choice. The results show that reviewing customers have on average a significantly higher number of orders and purchased items – even when considering product returns. Therefore, we argue that OCRs as a marketing instrument are not only helpful towards gaining new – but also for retaining existing – customers. This is especially important for retailers in the competitive e-commerce context, as customer loyalty is seen as an economic necessity for profitability and long-term success.
Recommended Citation
Lohse, Tobias M. and Kemper, Jan, "Online Customer Reviews as Driver of Customer Loyalty" (2019). ICIS 2019 Proceedings. 3.
https://aisel.aisnet.org/icis2019/business_models/business_models/3
Online Customer Reviews as Driver of Customer Loyalty
Online Customer Reviews (OCRs) belong to the most important marketing tools for online retailers, and have a significant impact on customers’ final purchase decision. This article adds new perspective on the favorable consequences of customer feedback and sheds light on the purchasing behavior of the OCR senders. Based on the self-perception theory, we study if an increased level of customer engagement makes reviewing customers more loyal compared to their non-reviewing counterparts. By linking a unique set of actual transaction data from online fashion covering more than 2.9 million orders from 0.4 million individual customers with more than 0.5 million submitted OCRs, we use a difference-in-difference (DID) approach as the method of choice. The results show that reviewing customers have on average a significantly higher number of orders and purchased items – even when considering product returns. Therefore, we argue that OCRs as a marketing instrument are not only helpful towards gaining new – but also for retaining existing – customers. This is especially important for retailers in the competitive e-commerce context, as customer loyalty is seen as an economic necessity for profitability and long-term success.