The increasing volume of online customer reviews of companies, products, and services requires organizations to carefully examine how they respond. The complex question of if and how firms should respond to online reviews and the effects of managerial response on future customer attitudes has limited systematic research available.
Professor T. Ravichandran, Lally School associate dean of research, Irene and Robert Bozzone ’55 Distinguished Professor, and the director of the Center for Supply Networks and Analytics, presented his research on this current topic at the Copenhagen Business School on Feb. 24 in their “Renowned Scholars Seminar Series.”
Ravichandran’s talk—“How Should Firms Respond to Online Word of Mouth?”—was based on his research with Rensselaer doctoral student Chaoqun Deng. Their research shows that electronic word of mouth (eWoM), as signified by customer reviews in online forums, has grown in importance in terms of its influence on customer attitudes and purchase decisions.
The study compiled data through text analysis of reviews and responses in an online review forum. The analysis demonstrated the importance of appropriate managerial response strategies to influence the attitudes of the complaining customer as well as observing customers. It concludes that managers should interact with consumers carefully in the review community in response to expressed dissatisfaction in order to restore that company’s reputation and brand image.
The study shows that managers should be aware they can respond both rationally and, at times, emotionally to complaints. Using social exchange theory, the study classifies customer complaints into three categories and suggest that managerial rational responses to negative reviews should be provided when customer complaints are of distributive and procedural unfairness. A combination of emotional and rational managerial response is warranted for negative reviews about interactional unfairness. Lastly, the research reflects that overall customer sentiment in the online review forum will also have an influence on future customers’ attitudes. The research suggests that managers should adopt a proactive stance and respond skillfully, dedicate appropriate skilled resources to handling complaints, and where there is a high volume of reviews, carefully balance automated with effectively tailored responses.
Ravichandran’s long-term research interests focus on digital strategies of firms and the mechanisms through which digitization is transforming firms, markets, supply networks, and industries. He has published more than 130 research papers including in leading scholarly journals in information systems (Information Systems Research, Journal of Management Information Systems, MIS Quarterly, Decision Sciences, European Journal of Information Systems), strategic management (Organization Science), technology management (IEEE Transactions on Engineering Management), and in leading practitioner journals (Communications of the ACM).
His research has won several awards including the Best Information Systems Publication in 2010 (Association of Information System); Best Published Paper Award, 2010 (Information Systems Research); Best Paper Award, Software Technology Track (HICSS, 2010); Best Paper Award Honorable Mention (IEEE Transactions on Engineering Management, 2007); Best Academic Paper Award (Second Supply Chain Management Symposium, McMaster University, 2004); and Best Paper Award (OCIS Division, Academy of Management, 2001).
He currently serves as a senior editor of MIS Quarterly and as a department editor for IEEE Transactions on Engineering Management. He recently completed a four-year term as an associate editor of MIS Quarterly and a three-year term as an associate editor of Information Systems Research.
Ravichandran works closely with several large firms on IT strategy, supply chain management, and innovation management. He has had extensive business experience as a consultant to the Reliance Group, Bombay; as the assistant director of the National Productivity Council, India; and as a production manager in Flakt AB (now Asea Brown Boveri). He has also been a successful entrepreneur of an IT services firm.
The Renowned Scholars Seminar Series at Copenhagen has showcased experts in business from around the world with recent scholars from the London School of Economics, Massachusetts Institute of Technology, New York University, University of Munich, University of Cambridge, and the University of Michigan. The series features multidisciplinary research at the socio-technical intersections of computer science and social science that can include big data analytics applications for managers, teachers, and citizens. The showcased research often provides practical applications that generate actionable insights, valuable outcomes, and sustainable impacts for organizations and society.