Insights into managerial responses to repeat customers: The moderating role of social influence and revisit intention

Abstract

Purpose: Repeat customers play an important role in the restaurant sector. Previous studies have confirmed the positive effect of managerial responses on customer relationship management. However, the practice of managerial response strategies toward repeat customers in the restaurant sector remains unclear. This study aims to explore how social influence and the revisit intention of customers affect the responding behavior of restaurant managers. Design/methodology/approach: This study collects information of 251,944 customer reviews and managerial responses from 1,272 restaurants on Yelp (a leading restaurant review website around the world) and builds four econometric models (with restaurant and month fixed effects) to test the hypotheses empirically. Findings: The empirical results show that restaurant managers are less likely to respond to reviews posted by repeat customers (10% lower than that of new customers). This effect is moderated by customer social influence, which entails that repeat customers with great social influence are more likely to receive managerial responses. Moreover, reviews from repeat customers who have had a longer time since their last consumption are also more likely to receive managerial responses. Practical implications: The results present implications for restaurant managers in business practice regarding managerial response. Managers should take advantage of platform designs and tools (i.e. customer relationship management programs to keep track of repeat customers) to locate repeat customers and avoid the potential negative effects caused by their selected response strategies. Originality/value: To the best of the authors’ knowledge, this study is among the first attempts to examine empirically how restaurant managers respond to reviews generated by repeat customers in real business practice and reveals what drives such activities from the perspectives of social influence and revisit intention.