Exploring Customer-Firm Interactions on Social Media: The Role of Firm Response Strategies on Customer Satisfaction

In the evolving landscape of marketing, both print media and social media have emerged as pivotal tools for reaching and engaging with consumers. Historically, print media has served as a cornerstone for sending marketing messages to customers, enabling marketers to disseminate information widely and effectively. In contemporary times, social media has transcended the traditional boundaries, transforming into a dynamic platform where firms and customers interact directly. This shift has turned social media into a vital arena for customer support and engagement, facilitating real-time communication and interactions. Recent advancements in artificial intelligence (AI), particularly the introduction of large language models (LLMs), provide diverse potentials for transforming various aspects of marketing and communication. These AI-driven technologies promise to enhance the efficiency and personalization of customer-firm interactions, while also offering new tools for improving the accuracy and reliability of information dissemination. This thesis comprises three essays, each exploring different facets of marketing in the digital age. The first essay, titled "The Art of Responding to Customer Online Messages: The Role of Response Standardization," which is a joint word with my advisor Professor Gaia Rubera, Professor of Marketing at Bocconi University, delves into the intricacies of customer-firm interactions on social media platforms. The landscape of customer-firm interactions which has undergone a significant transformation with social media platforms becoming central to these engagements. Customers increasingly prefer reaching out to brands directly through these platforms for support, favoring this method over traditional avenues. Prior research highlights the benefits for brands in addressing online messages, noting impacts on firm value and customer behavior. Studies have examined the effectiveness of various response strategies such as active listening, empathy, and response tailoring in online interactions. However, the rise of social media as a two-way communication channel has necessitated the use of standardized responses by firms to manage resources efficiently. This study investigates the impact of response standardization on customer satisfaction by analyzing a large dataset from a social media platform, encompassing over one million messages between 167 firms and their customers across 26 industries. The findings indicate that while standardized responses generally lower customer satisfaction, they are particularly effective for highly dissatisfied customers. This underscores the potential of generative AI and advanced conversational agents to enhance response personalization at minimal costs, introducing significant variability in firm responses. The second essay, titled “The Game After the Whistle: The Effect of Soccer Matches on Government Bonds”, which is a joint word with my advisor Professor Gaia Rubera Professor of Marketing at Bocconi University, examines the economic ramifications of national football match outcomes on 10-year government bond yields. By evaluating 703 World Cup and 808 European Championship matches from 1990 to 2022, the study explores the causal impact of match results (win, loss, tie) on bond yields within an event study framework. The findings reveal that despite an immediate negative reaction following a loss, bond yields experience a rebound from the first to the second trading day post-match. This phenomenon suggests an initial adverse market response to a national loss, followed by a quick recovery. The study posits that this flip can be partially attributed to governments' positive manipulation of economic news sentiment following a loss, highlighting the interplay between significant sporting events and economic sentiment.