How Online Customer Reviews Impact Product Development

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Product reviews from online users are essential to successful product development. A study by professor Zhilhei Qiao at the University of Alabama at Birmingham’s Collat School of Business explored how online reviews impact customer agility and product performance, yielding 4 key product development insights.

Big Data, Vast Opportunity

Online reviews are a rich source of data that can inspire product development. Although analysis is costly, developers can gain a more comprehensive market view. That’s why customer agility matters: product developers must leverage big data to understand customer needs.

The Changing Value of Online Review Data

Initially, as a product’s review volume starts growing, capturing insights actually becomes less valuable. But when review volume hits an optimal threshold of over 28,000 online reviews, data insights start to pay dividends.

The Effects of Sibling Products and Variance in Product Ratings

Sibling products (products related to the same organization) often compete for resources. The number of sibling products amplify effects of review volume on customer agility: more sibling products means a more negative effect of low-volume reviews, and a more positive effect of high-volume reviews.

Variance in product ratings (receiving many extreme positive and/or negative ratings) has the opposite effect. Rating variance decreases the negative effect of low review volume and the positive effect of high review volume.

Customer Agility and Product Performance

“Over-responding” to reviews has pitfalls. Customers can express misleading demands, and product modification is costly. But when developers address demands that really matter, better performance will result. UAB’s study found that while most product developers address 12% of online reviews, a 15% rate of response is the sweet spot of customer agility.

When technology and business come together, more successful products and more 5-star reviews are the result. Learn more at University of Alabama at Birmingham’s Collat School of Business online.

An infographic about how product developers can use online review data to transform products by the UAB Collat School of Business.

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