Do Managerial Responses Pay Off? Individual-Level Returns from Responding to Online Reviews
(A2026-132664)

AUTHORS

Yingying Peng, University of Manchester; Florian Dost, Brandenburg University of Technology; Bryan Lukas, University of Manchester’s Alliance Manchester Business School

ABSTRACT

Firms increasingly respond to customer reviews, yet it is unclear whether these responses create value for the reviewer as a customer. We link 27,202 reviews, managerial responses, and five years of transaction data from an online retailer to examine how responding affects the reviewer’s future spending and customer lifetime value (CLV). Using Heckman selection and control-function models over a 3-year horizon, we show that responses do not increase spending on average, but have strong positive effects for specific customers and reviews. High-value customers spend more when they receive longer responses, indicating that effortful replies pay off where CLV is high. Positive low-arousal “faint praise” reviews do not signal robust loyalty; however, empathetic responses to faint praise substantially increase future spending. We provide individual-level evidence on the return to responding and derive guidelines for which reviews and reviewers firms should prioritise.