Online Diaries and Professional Service

Abstract

Online diaries, series of posts generated by consumers in chronological order to record their post-consumption experience over time, have recently emerged in professional services platforms. As a novel form of electronic word-of-mouth (eWOM), an online diary has an initiating post and some optional follow-up posts. Compared to conventional online reviews with a single post, the dynamic structure of online diaries may change the way consumers search and process information. Using a large dataset from an online platform of cosmetic procedures, this paper empirically investigates 1) whether providing follow-ups in online diaries affects the sales of professional services, and 2) how the impact of follow-ups is moderated by the perceived risk of professional services and the quality of service providers. We find that providing follow-ups in diaries has a positive effect on the sales of the respective cosmetic procedures. Moreover, the effect is weaker for high-quality providers than for low-quality providers, indicating that the quality of providers substitutes the effect of follow-ups. Interestingly, the effect of follow-ups is asymmetric for procedures with high and low perceived risks. For high-risk procedures, providing follow-ups increases sales regardless of the quality of providers. In contrast, for low-risk procedures, providing follow-ups substantially increases sales for low-quality providers, but not for high-quality providers. Finally, the substitution effect of the quality of providers over follow-ups is stronger for procedures with a lower perceived risk. Our findings provide important implications for both platform owners and service providers.

Keywords: Online Diary, Perceived Risk, Quality, Professional Service, Cosmetic Procedure

This paper currently is under revision for 2nd round review at Information Systems Research.