Repeat Customers and Satisfaction: Uncovering New Intricacies Through Restaurant Reviews

Abstract

Repeat customers are crucial for business success. Previous studies have mainly focused on those factors that affect repeat patronage but ignored how repeat customers reevaluate the same service provider after consumption. We obtained a dataset containing 637,748 reviews of restaurants in New York City and used a generalized difference-in-differences design to further explore the rating behavior of local repeat customers. The results of this study contribute to theories of customer satisfaction, repeat patronage, and customer location in the context of user-generated content as repeat customers are found to be sensitive to quality variations. Such sensitivity is even accentuated by local customers. Relevant practical implications for restaurant managers are also drawn from the results.