Segmentation of both reviewers and businesses on social media

Abstract

Employing online consumer reviews, this research develops a market segmentation procedure that is feasible to businesses present on social media. Because online reviews typically encompass large numbers of both reviewers and businesses, this data structure allows for both reviewer segmentation and business segmentation. This two-side segmentation approach segments not only reviewers in the preferences expressed in their reviews, but also businesses in their business practices specified in the reviews. Whereas common existing segmentation approaches predominantly use survey and transaction data, the proposed procedure uses publicly available and detailed consumption information in such reviews. A large number of product features elicited from such reviews lead to rich and detailed profiling of both reviewer segments and business segments. Using restaurant reviews on Yelp, this research demonstrates how the proposed procedure can help businesses develop segmentation strategies on social media.