Word of mouth and online customer reviews are important factors that influence customer purchase behavior. However, firms face the challenge of motivating customers to share their experiences online and quantifying the value of this online engagement. My dissertation consists of two essays that address these challenges by showing how firms can motivate customers to engage online and measure their change in spending once they do so. Essay One examines the role of cognitive effort in the generation of word of mouth, and across six studies I show that when firms suggest positive pre-generated comments to their customers, effort is reduced and customers are more likely to share via social media. The first study establishes that offering one pre-generated comment is optimal and requires the least amount of cognitive effort. Study two shows that effort is the mediator between the pre-generated comments and customer posting intentions. Studies three and four are field experiments that show robustness of the main effect of a pre-generated comment increasing online engagement. Study five replicates these findings and highlights an added benefit of pre-generated comments: Firms can prime customers with desirable behavior (e.g., excitement) by using language cues, which can generate additional spending. Study six tests for potential backlash from customers when there is a mismatch between the positive pre-generated comment and the actual experience. Findings from study six show that the positive suggestions will not amplify customer negativity, which indicates that there are no significant downsides to these positive suggestions. Taken together, the study results in Essay One show that firms can reduce cognitive effort for their customers by suggesting positive comments, and this will subsequently increase positive word of mouth and customer spending. Essay Two attempts to push forward the current understanding of how much online customer reviews are worth to firms. Much prior work has assessed the effect of reviews on potential customers, but little work has focused on changes in behavior of the reviewers themselves once they post a review. Drawing on the commitment-consistency principle, I conduct two studies that show how the act of posting a review changes customer spending. Study one uses a data set of over 60,000 loyalty program members of a large quick-serve restaurant, and results show that customers who are active reviewers spend differentially more and have more transactions than those customers who are not reviewers. I also find that relationship length affects this reviewer spending effect, where customers with a longer tenure exhibit even greater spending and transaction. Study two is an experiment that builds upon the results of study one by establishing causality and showing the value of a managerial response to an online customer review. When the review is acknowledged by management, interpersonal justice is increased, which partially explains the relationship between reviewer status and future spending. As a result, I conclude that when assessing the benefits of online customer reviews, managers must also account for changes in spending of the reviewers themselves. At the same time, firms should focus on converting customers into reviewers, since this could spur additional purchases from them in the future.
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