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What influences customers’ online reviews

October 26, 2011 | Online Marketing

How accurately do online comments represent the true underlying sentiment of a product’s customers? New research sheds light on several important dynamics that affect the opinions that customers post about products.

Social Media has generated an unprecedented volume of word of mouth surrounding brands and products. Customers who had historically engaged in water-cooler discussions with coworkers or backyard conversations with neighbors are now turning to online ratings and reviews, blogs, discussion groups and Twitter feeds. Previously private conversations are now publicly visible to potential customers and product managers.

From the standpoint of companies, social media can provide valuable customer feedback about their products by allowing them to eavesdrop on these conversations. The desire to listen in on customers’ online conversations about products is so pervasive across companies that it has spawned a cottage industry of listening companies that regularly scan online conversations to gauge customer sentiment.

But how accurately do these conversations represent the true underlying sentiment of a product’s customers? To probe this question, we analyzed product ratings and sales over time from a popular online retailer. By studying rating behavior at the level of individual contributors, we uncovered several key dynamics that drive the evolution of online forums. We subsequently demonstrated how these dynamics influence product sales by relating online opinions to sales performance across a sample of products.

Get the full story at the MIT Sloan Management Review

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