Effect of Online Reviews on Customers of Bangalore-Based Real Estate Company - An Exploratory Study

Social media, consumer forums, review sites and blogs facilitate wider and faster sharing of customer experiences. Consumers look at user-generated reviews in consumer portals before deciding to purchase products/services. This Paper aims at studying effects of online reviews on intentions of existing and potential customers to pursue specific actions with regard to budget- and mid-range housing projects offered by a Bangalore-based realty company (Bangalore Realty Limited - BRL). Main data set for the study comprises of 221 user online reviews - in eight consumer review/complaint portals over a period of four years (2010-2014), supplemented by personal interviews of 25 customers. Online reviews are subjected to manual content analysis. Emergent themes in the reviews are identified and frequencies for negative and positive themes, valence and outcomes - which culminate in actions such as ‘taking legal recourse', ‘withdrawal from the project' or intentions ‘not to recommend' and ‘to recommend' - are determined. Such intentions expressed in reviews convey strong messages as further “threads” and “comments” are generated. Parameters like ‘Mean time to get the complaints resolved' (in case of registration of sites and getting refunds on cancellation) are determined. This study reveals that user-generated online reviews help customers for making decisions about ‘continuance' or ‘withdrawal' or ‘staying away' from the projects of BRL. At the same time BRL itself benefits from monitoring and responding to such reviews through setting up of appropriate customer complaints handling system, for gathering, transmitting and resolution of issues raised in online reviews, which would minimize harmful effect of negative reviews and maximize beneficial effect of positive reviews. Giving timely responses to customer complaints/online reviews, and periodic communication about project status may not require additional capital outlay or human resources. BRL's current policy of ignoring or being indifferent to online reviews would be detrimental for its revenues, reputation and future growth. Study is based on analysis of qualitative data which cannot be subjected to robust statistical tests. Many critical dimensions such as customer/user preferences, motives, expertise, involvement and credibility (of the portals, users posting online reviews) are not analyzed in this study, as online reviews do not contain relevant data