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Requesting customers to rate service professionals first can lead to smaller tips

Rating a service professional first before making the tip decision decreases the tip amount by 13 percent, a significant portion of income for service professionals in the restaurant industry.

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Researchers from City University of Hong Kong, University of Minnesota, and University of Illinois Urbana-Champaign published a new paper in the Journal of Marketing that finds that requesting customers to rate service professionals first can lead to smaller tips, whereas asking customers to tip first does not influence subsequent rating scores.

The study, forthcoming in the Journal of Marketing, is titled “Order Matters: Rating Service Professionals First Reduces Tipping Amount” and is authored by Jinjie Chen, Alison Jing Xu, Maria A. Rodas, and Xuefeng Liu.

Imagine you are on vacation and have just taken an Uber from the airport to your hotel. When you arrive, the app asks you to rate the driver. The trip was great, so you give the driver a five-star rating, as you usually do. Then, the app asks you to decide on how much to tip the driver. How would having rated the driver affect how much you tip? What if the app asked you to tip first and then rate?

Many apps such as Uber and Lyft ask customers to both rate and tip the service professionals. Interestingly, although Uber and Lyft apps allow riders to both tip and rate the drivers on the platform, the design of each app is different. While Lyft asks riders to tip before they rate the drivers, Uber prompts riders to rate the drivers before tipping. How does the order of these two decisions affect each other?

This research team investigated whether, how, why, and when the order of rating and tipping affects both consumer behaviors. A survey in the study finds that consumers and service professionals intuitively believe that soliciting ratings first should lead to larger tipping amounts. However, counter to these intuitions, seven studies provide evidence showing that rating first actually decreases subsequent tips.

In one field study, a driver provided shared ride services by alternating between the two ridesharing platforms. The same driver then recorded the amounts of the ride fare and the tip received from each ride. Based on 92 trips, we found that, after controlling for the base fare, Uber riders, who rated the driver first, tipped smaller amounts than Lyft riders, who tipped the driver first. Additional studies also find that tipping a service professional first does not seem to influence the ratings consumers would provide.

Results from another field study conducted in a restaurant indicate that rating a service professional first before making the tip decision decreases the tip amount by 13 percent, a significant portion of income for service professionals in the restaurant industry.

With the advent of new technology and the app-based economy, more and more services are now asking consumers to rate and tip service professionals. This new research finds that asking for ratings before tipping can lead to customers giving smaller tips. However, customers and service professionals are not aware of this. “Our findings also have important implications for firms and managers. How much people tip is not only important for service professionals financially, but can also impact their morale and retention rates, which are also important for firms. Therefore, when designing service platform interfaces, managers should consider asking customers for their tipping decisions before rating decisions,” says the research team.

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‘Top reviews’ can help sway shoppers, but there are limits

Although featured — or top — reviews on e-commerce sites can help cut down on information overload for customers trying to make purchasing decisions, too many such top reviews can pose an overload of their own, according to researchers.

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Although featured — or top — reviews on e-commerce sites can help cut down on information overload for customers trying to make purchasing decisions, too many such top reviews can pose an overload of their own, according to researchers.

In a study of products and product reviews on online retail giant Amazon, the researchers found that top reviews — which are featured reviews that consumers have endorsed as the most helpful — can lead to higher sales and improved customer satisfaction. However, they added that when there are too many featured reviews, their influence can start to wane.

“We found that there is a situation that when there are too many top reviews, you fall right back into the trap where there is just too much information for the consumer,” said Wael Jabr, assistant professor of supply chain and information systems in the Penn State Smeal College of Business. “In this natural experiment we had some products with just three top reviews and others with significantly more. For products with way more top reviews, we saw the value of those top reviews goes away.”

The researchers used data from about 2.2 million reviews of 1,000 products on Amazon, including all review-related information, such as the overall number of reviews and featured reviews of those products. Sentiment of reviews was determined by the rating the customers gave the product. The researchers also tracked the Amazon sales ranking of the studied products over a 10-month period.

The effectiveness of the top reviews was based on how the performance of individual products changed over time. Specifically, the researchers looked at how the reviews started to disperse in their ratings and how the product sales rank changed. 

The study was published in Management Information Systems Quarterly.

According to Jabr, e-commerce sites chose to feature reviews because popular products tended to attract numerous reviews. The number of reviews for some of these products can be staggering, he added.

“For example, when Amazon put out the Echo Dot smart speaker, more than a million customers reviewed that product within the first four years of its release,” said Jabr. “So, do we need a million reviews to make a good decision on what to buy? Probably not. At a certain point, then, companies started to realize there is an overload that customers will face when we have to navigate this content. Retailers eventually came up with a variety of ways to kind of help you navigate this content, one of which is featuring reviews.”

Sentiment match

The researchers also found that the influence of top reviews is strengthened when their opinions tend to match the overall sentiment of the other reviews.

“When you look at the reviews, Amazon shows you the overall ratings of the reviews — for example, how many people gave it a four-star rating, or, how many people gave it a two or three, etcetera,” said Jabr. “We wondered, then, if the top review effect can be amplified. And it can. We found that when the distribution of top reviews and the distribution of overall reviews match, then the power of top reviews to influence gains strength. It is almost like there is a confirmation when the top reviews match what the crowd is saying.”

The power of top reviews to lift sales and satisfaction is limited, however, said Jabr, who worked with Mohammad Rahman, associate professor of management at the Krannert School of Management at Purdue University. For example, they found that top reviews lack the power to improve the status of less popular products.

The findings could help companies design better webpages while also helping customers make better decisions, said Jabr.

Selling isn’t enough

“Platforms, such as Amazon, are, of course, in the business of selling stuff, but selling stuff alone is not enough,” said Jabr. “Platforms want consumers satisfied with their purchases — and not return those purchases. They also want repeat consumers. In fact, Jeff Bezos himself is quoted saying, ‘We don’t make money when we sell things. We make money when we help consumers make better decisions.’”

The study explores whether there is a certain magic number of reviews as being an optimal amount of top reviews, according to the researchers.

“While the natural experiment does not compare every combination of numbers — for example, two reviews compared to three reviews, or two compared to four — we found that products with three reviews faired better than products with a varying number of reviews ranging from four to 10,” said Jabr. 

In addition to being thoughtful about selecting and displaying top reviews on a webpage, the researchers also suggest that, at a certain point, companies should switch from encouraging customers to review products to asking them to endorse reviews.

“Retailers often default to sending you an email saying, ‘Please rate our product,’ which we think is great,” said Jabr. “But when there are enough reviews, they may want to find a way to nudge the customers to decide on top reviews because that’s going to be much more valuable then writing one more review.”

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Why silly distractions at work can actually be good for you

Short positivity interventions can help employees make the best of their day and that employers and employees should consider incorporating more positivity into the workday.

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Positive interventions that distract us from difficult tasks actually help to reduce our stress levels, according to new research from WHU – Otto Beisheim School of Management and Trinity Business School. 

The research, conducted by an international team of researchers, shows that short positive interventions, such as watching a funny YouTube video, can help you to overcome daily demands like dealing with annoying emails or the tasks you dread. In turn, this allows you to be more engaged, creative, and helpful toward your coworkers.

The research was led by Vera Schweitzer from WHU – Otto Beisheim School of Management with co-authors Wladislaw Rivkin (Trinity), Fabiola Gerpott (WHU – Otto Beisheim School of Management), Stefan Diestel (University of Wuppertal), Jana Kühnel (University of Vienna), Roman Prem (University of Graz), and Mo Wang (University of Florida).

So, according to this research, next time you find yourself secretly laughing at a hilarious video your colleague sent to you during the lunch break, you should embrace it. This will help you to recover from a stressful morning and prepare you to make the rest of the day a success.

Professor Vera Schweitzer, researcher at WHU – Otto Beisheim School of Management, explained: “Our study shows that experiencing feelings of positivity throughout your workday can help you to remain effective ­ particularly when daily work demands require you to invest a lot of self-control, that is, regulatory resources to control your temper.

“Trying to stay calm after reading an annoying email, for example, is typically quite depleting for employees. Consequently, they might struggle to demonstrate self-control throughout the rest of their workday, which, in turn, would hamper their engagement, creativity, and behavior toward their colleagues.

“This is where positivity comes into play: Watching a funny video increases feelings of positivity. Such positive emotions allow employees to protect their regulatory resources even after dealing with resource-consuming self-control demands. In turn, this positively affects their effectiveness at work.”

Dr Wladislaw Rivkin added:“Today’s work environments are increasingly demanding, but we have limited understanding of what organizations and employees can do to prevent the stressful effects of self-control demands such as negative emails or unloved tasks. 

“Our research shows that short positivity interventions can help employees make the best of their day and that employers and employees should consider incorporating more positivity into the workday. For example, organizations could provide employees with recommendations about short funny videos via a daily newsletter or post a ‘joke of the day’ on the intranet. By doing so, employers can help mitigate the negative effects of self-control demands.” 

The researchers gathered their results by examining 85 employees over 12 workdays, who received a daily text- or video-based positivity micro-intervention. 

The paper, entitled ‘Some positivity per day can protect you a long way: A within-person field experiment to test an affect-resource model of employee effectiveness at work’, was published in the journal ‘Work & Stress’. 

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AXA Philippines recognized for protecting MSMEs

AXA was lauded for its development of MicroBiz Protek Jr., a property microinsurance product designed for Micro, Small, and Medium Enterprises (MSMEs) in partnership with Cebuana Lhuillier.

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AXA Philippines was recognized by its partner Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) during the latter’s Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia (RFPI) Closing Ceremony held at the New Coast Hotel in Manila.

Through GIZ RFPI, AXA was lauded for its development of MicroBiz Protek Jr., a property microinsurance product designed for Micro, Small, and Medium Enterprises (MSMEs) in partnership with Cebuana Lhuillier. It insures microenterprises against calamities and provides coverage for burglary and robbery. The product also offers emergency assistance available in the Emma by AXA PH mobile app, which gives users free access to services such as ambulance, roadside, fire, and police assistance, while policyholders can pay their premiums through the app, among other things.

 GIZ also praised AXA Philippines for its support of Mutual Exchange Forum on Inclusive Insurance (MEFIN) activities such as regional Public-Private Dialogues during the awards program.

GIZ RFPI is a regional project that has been implemented in seven countries starting in 2013. It aims to develop direct climate risk insurance approaches for the poorest, poor, at-risk population and MSMEs in the partner countries including Indonesia, Vietnam and Philippines at the political-strategic level.

The awardees were selected based on their contributions on regulatory framework improvements, business model development, capacity building, knowledge exchange, and in the strengthening of the MEFIN initiatives.

“Every Filipino entrepreneur deserves to be protected while taking care of their business,” said Gael Lapie, CEO In-Charge and Chief Financial Officer of AXA Philippines. “This recognition reaffirms our commitment to making insurance and protection accessible for all, including the MSME owners.”

For more information about AXA Philippines, visit https://www.axa.com.ph/.

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