Do repeat customers effectively attract new customers? Reconsidering customer influence value of repeat customers

Abstract

In the hospitality industry, repeat customers are recognized for their significant contributions, not just because they visit a business again but also because they generate strong word-of-mouth impacts on potential customers’ decisions. However, the quality of repeat customers’ word-of-mouth should be reconsidered for its pivotal role in influencing new customers. This research examines the effectiveness of repeat customers’ word-of-mouth compared to first-time customers. Employing a multi-study, multi-method approach, the study examines whether the quality and usefulness of online reviews written by repeat customers is indeed superior to those of first-time customers, through text analysis (Study 1), an experiment (Study 2), and a regression analysis utilizing secondary data (Study 3). Contrary to common belief, the results of the three studies reveal that repeat customers’ reviews do not surpass those of first-time customers in terms of quality, usefulness, or attracting new customers, highlighting the importance of considering quality when assessing customers’ indirect contributions.