Why am I satisfied? See my reviews – Price and location matter in the restaurant industry

Abstract

The main purpose of this study is to identify relationships between customers’ service evaluations embedded in online reviews and customer satisfaction and demonstrate the unique role of price and location in the restaurant industry. Approximately 250,000 online reviews of restaurants were analyzed to answer (1) How cognitive and affective evaluations written in a review influence customer satisfaction and (2) How price plays a moderating role in the relationship between text-based service evaluations and customer satisfaction. By incorporating spatial dependency, geographically weighted regression analysis was conducted to identify the pure impact of affective and cognitive evaluations of restaurant services and to develop a sophisticated satisfaction prediction model. This study found the significant impact of cognitive and affective service evaluations on customer satisfaction, which was moderated by price. Moreover, this study highlighted geo-spatial dependency by demonstrating that spatial auto-correlation matters only for restaurants in the lowest ($) and highest ($$$$) price groups.