Valence or Volume? Maximizing Online Review Influence Across Consumers, Products, and Marketing

Evidence shows that products with online reviews have a higher chance to stay in the consideration set of consumers than products with no online reviews do. Online reviews, as consumer-generated content, affect consumers’ purchase decision-making process. Most of the studies in this area have looked at valence and volume of online reviews. Generally, valence and volume of online reviews are considered to positively influence sales; however, the findings in the literature are inconclusive. While some studies have reported a positive relationship between valence/volume and sales, others have failed to find any significant relationship. Using both lab experiments and real-world data, this dissertation addresses the conflicting findings from previous studies by introducing the role of the individual, the product, and firm-generated promotional message. In the first essay of the dissertation, I attempt to explain the inconsistencies in the literature by examining the moderating effect of regulatory focus on the relative role of valence versus volume of online reviews in consumer purchase decisions. Regulatory focus theory suggests that people tend to have either a promotion or a prevention orientation in approaching their desired goals. The current research argues that depending on consumers’ regulatory orientation, the effect of either review valence or review volume on consumers’ likelihood to purchase the product will become more salient. Moreover, specific products also activate a certain regulatory orientation. Therefore, depending on the products’ regulatory orientation, valence or volume of online reviews (i.e. valence and volume) will become more or less influential across different product categories. The second essay of the dissertation investigates the use of firm-generated promotional message to maximize online review volume versus valence effects. Specifically, it examines how a common online retail-marketing tactic, scarcity appeal, can be used to accentuate the effect of online review volume and valence on consumers’ purchase decisions. I argue that the mere presence of a scarcity appeal and the specific type of scarcity appeal used can influence the extent to which consumers weigh valence versus volume information. The integrative approach developed in this research advocates the simultaneous consideration of firm marketing tactics and consumer-generated content. It argues that firm-level actions can interact with online review components (i.e. volume and valence) to affect sales