Three studies on exploring the effectiveness of e-WOM on customer evaluation and behavior

Abstract

With the advent and prosperity of social media, an increasing number of customers voluntarily post their evaluations and opinions about a product or service online and e-WOM has gained extraordinary growth and aroused intensive academic attention. The current literature has examined how e-WOM, especially in the form of online customer reviews, influences a wide range of outcomes such as customer awareness, perceptions, attitudes, behavioral intentions, and product sales. In my dissertation, I developed three studies that aim to reveal the role of e-WOM in different forms (e.g., photo, text, and vote) on consumer information processing and decision-making. In the first study, I examined the interaction effects of review certainty, reviewer popularity, reviewer expertise, and the niche width of a restaurant on review usefulness, by drawing on the dual-process theory and social influence theory. Utilizing a zero-inflated negative binomial Poisson regression, I empirically tested my hypotheses based on 10,097 reviews on 2,383 restaurants from Yelp.com. My results indicated that (1) the impact of review certainty on review usefulness decreases with reviewer popularity but does not vary with reviewer expertise; (2) the niche width of a restaurant—as a contextual feature—interacts with review certainty and reviewer characteristics in influencing review usefulness. In the second study, I focused on one particular type of e-WOM - votes by prior users on a review. I examined how two numeric characteristics of online review helpfulness: 1) helpfulness ratio—the ratio of later viewers who believe that a previous review is helpful; and 2) helpfulness magnitude—the number of later viewers who vote on a previous review; influence consumers' reaction toward the product/service reviewed. Drawing on the social influence theory, this study examined the interactive impacts between these two factors and two other characteristics of online review content (i.e., review valence and type) on consumer trust and attitude. I conducted three lab-based experiments to test the research model. My research finds that regardless of the valence and type of reviews, vote ratio enhances review trustworthiness and guide corresponding product evaluation. In contrast with ratio effect, vote magnitude is significantly influential only for the negative attribute-based review. In the third study, I investigated three key characteristic of photo e-WOM: layout, sequence and density of photo relative to text in an online customer review. This study conducted both a lab experiment and a field study to demonstrate the role of photo e-WOM on consumer information processing and decision-making. In particular, I adapted the cue summation theory of multi-channel communication to examine the impact of between-channel interactions of text and photo on two outcomes of consumer information processing—diagnosticity and pleasantness of e-WOM and one outcome of consumer decision-making—product value ratings. This study employs both a lab-based experiment and a field analysis to provide robust validation of hypotheses. The experimental results show that separate layout is better than the alternate layout in perceived diagnosticity and product evaluation, especially when the photo is displayed first than the text first displayed. In contrast, for pleasantness, alternate layout is better than separate layout, regardless of the sequence of text and picture. Moreover, the field results suggest that sharing more photos especially outside photos hurts restaurant reputation while sharing photos more on food, drink and menu of a restaurant increases the restaurant's reputation; and for the restaurant as a generalist occupying multiple cuisines, the more photos shared in a review, the better its reputation will be; by contrast, for the restaurant as a specialist occupying few cuisines, the more photos shared on food and drink in a review, the better its reputation will be. Theoretically, these findings contribute to online customer review literature, provide new managerial implications for leveraging e-WOM, and add new insights into understanding the role of organization positioning in customer evaluations.