Thesis

media to complain (Catran, 2016). One of the biggest reasons for this shift away from
social media can be attributed to companies’ failure to meet customers’ needs. Some
users feel that it takes too long to address issues online, and other think it has limited
ability to change more complex issues (Catran, 2016).
Customers have a relatively low expectation for customer service in the U.S. and this
also varies by generation (Catran, 2016). About 78 percent of baby boomers will leave
due to customer service issues, while only 54 percent of millennials will (Catran, 2016).
Each generation finds different qualities in customer service important. Even though
more and more people shy away from complaining on social media, it is important for
brands to continue to respond and help customers online. The decline in social media
customer service may be attributed to a decline in company usage of social media of
this purpose. If business doesn’t appear open to responding to customers, online users
will take note and direct their complaints elsewhere or maybe not complain at all
because they feel as though their voice won’t be heard.
Every second, 12 newly-active mobile accounts are created on social media, adding to
the already 2.3 billion currently active worldwide. Restaurants have become the hub of
social sharing, whether it be guests sharing their location, photos or even leaving a
review (Social Hospitality, 2016). Yelp still seems to dominate the online restaurant
review scene and it holds a lot more power in the restaurant industry than most people
think (Social Hospitality, 2016). Restaurants whose average rating increases by one star
on Yelp could potentially see a 5 to 9 percent boost in revenue (Social Hospitality, 2016).
Yelp is a good platform for consumers to leave personal reviews, but now that
restaurants have started to interact more on social media many platforms offer the
opportunity for review.
Social media is changing the way customers communicate with businesses following
service failures. While this allows social media savvy companies to capitalize on
engagement opportunities, it also runs the risk of crisis for others if not handles
properly (Grégoire, Salle, & Tripp, 2014). It is very important for companies to lay out a
plan on how to respond to each type of criticism, whether it be a simple fix or a more
complex issue. The way a brand responds can often effect the way the customer will
feel about the brand in the future.
The number of positive reviews directly effects three pieces of financial performance
including net sales, guest counts and average check amount (Kima, Lib, & Brymerb,
2015). Positive reviews hold restaurants to a high standard that promotes high quality
service. If a restaurant can provide customers with well-rounded strong service in every
aspect, it will see financial growth. A hospitality management study on firm value in U.S.
restaurant companies stated that there is a correlation between a restaurant’s social
media activity and the businesses overall value, and it also found that financial markets
reward restaurants with strong social media (Kima, Kohb, Chaa, & Leec, 2013).
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