Abstract:

In customer reviews, customers vary in the evaluations of the product. In recent years, many researchers have investigated the influence of variance on the sales. Most of them have studied the rating variance, but they got different conclusions. The variance of customers’ evaluation result from different evaluations of product attributes, which is named preference variance. The article uses text analysis to measure preference variance in customer reviews and empirically studies the relationship between preference variance and product sales. The article finds that preference variance has significantly positive effect on product sale, volume negatively moderates this effect and valence positively moderates this effect. The research explores the mechanism of online customer reviews, and can help managers to monitor and utilize online word-of-mouth.

Key words: customer reviews, variance, volume, valence, sales