The impact of online customer reviews on product iterative innovation

Abstract

PurposeOnline customer reviews is an important information resource for product innovation. This study aims to investigate the impact of online customer reviews on iterative innovation of software products and the moderating roles of product complexity in the process of online reviews influencing product iterative innovation.Design/methodology/approachTo empirically test the hypotheses, this paper built a panel data of 500 software products from 2019 to 2021 and applied Poisson regression analysis.FindingsEmpirically results reveal that both sentiment and quantity of online customer reviews have positive effects on iteration innovation of software products. In addition, the authors find that product complexity negatively moderates the relationship between online reviews and iterative innovation.Practical implicationsThis study suggests that firms can acquire valuable information from customers’ online reviews for product iterative innovation and improvement. However, for high-complexity products, it may be difficult for enterprises to obtain useful information for iterative innovation from online reviews. On the other hand, this study provides a reference for firms to choose more useful online reviews from the perspective of sentiment.Originality/valueThis paper provides a new finding that there is a positive relationship between online customer reviews and iterative innovation of software products. Moreover, the authors also provide a deeper understanding of how online customer reviews affects iterative innovation by examining the moderating roles of product complexity.