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Understanding the Impact of Customer Feedback: Evidence from a Field Experiment with Entrepreneurs in Rwanda
Last registered on March 31, 2021

Pre-Trial

Trial Information
General Information
Title
Understanding the Impact of Customer Feedback: Evidence from a Field Experiment with Entrepreneurs in Rwanda
RCT ID
AEARCTR-0006470
Initial registration date
September 24, 2020
Last updated
March 31, 2021 8:04 PM EDT
Location(s)

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Primary Investigator
Affiliation
Stanford University
Other Primary Investigator(s)
PI Affiliation
London School of Economics and Political Science
PI Affiliation
The University of Chicago Booth School of Business
PI Affiliation
The University of Texas at Austin
Additional Trial Information
Status
On going
Start date
2020-08-01
End date
2021-09-30
Secondary IDs
Abstract
This research seeks to assess the impact of customer feedback on firm performance and understand the mechanism of that impact. Both academic researchers as well as industry practitioners recognize that the voice of the customer is a powerful tool which businesses can wield in order to enhance their performance. However, very little is known about the business impact of listening to customers. We conduct a randomized controlled field experiment in Rwanda in order to study the impact of customer feedback on a sample of small entrepreneurs. We hypothesize that customer feedback could operate through two broad mechanisms – (1) just the act of seeking feedback could change the utility of the customer, or (2) the feedback causes firms to improve the products and services they offer, which in-turn changes the utility the customer derives from the firm. Our study aims at teasing apart these two effects, with clear implications for firm policy.
External Link(s)
Registration Citation
Citation
Anderson, Stephen et al. 2021. "Understanding the Impact of Customer Feedback: Evidence from a Field Experiment with Entrepreneurs in Rwanda." AEA RCT Registry. March 31. https://doi.org/10.1257/rct.6470-1.1.
Experimental Details
Interventions
Intervention(s)
We conduct a randomized controlled field experiment in Rwanda in order to study the impact of customer feedback on a sample of small entrepreneurs. We hypothesize that customer feedback could operate through two broad mechanisms – (1) just the act of seeking feedback could change the utility of the customer, or (2) the feedback causes firms to improve the products and services they offer, which in-turn changes the utility the customer derives from the firm. Our study aims at teasing apart these two effects, with clear implications for firm policy.
Intervention Start Date
2020-09-01
Intervention End Date
2021-08-31
Primary Outcomes
Primary Outcomes (end points)
Sales, Profits, Number of customers, Number of loyal customers, number of new customers
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We will randomly assign the firms into one of the two experimental groups:

1. Group 1 (Treatment): Entrepreneurs will receive a smartphone with a mobile app tool that is focused on tracking customer contacts. Next, the customers’ contacts in the application will be further randomized into two experimental groups. Customer Group 1 (CG1) will consist of customers from which the firm will seek feedback and Customer Group 2 (CG2) will consist of a hold-out sample of customers from which feedback won’t be sought Overall, this solution aims to increase an entrepreneur’s likelihood of seeking feedback from their customers. Further, it also increases their ability to pay attention to, and act on the customer feedback that they collect.

2. Group 2 (Control): Entrepreneurs will form a counter-factual group that only receives the smartphone with the application. This group will only track their customers. The control firms will not be primed to seek feedback from their customers.
Experimental Design Details
Not available
Randomization Method
Randomization done on computer using Stata
Randomization Unit
Two levels of randomization - (1) Firm Level (2) Customer Level
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
Treatment is not clustered, we follow individual randomization where each individual observation is a firm in our case
Sample size: planned number of observations
(1) 274 firms, and (2) For the number of customers, that would depend on the number of customers who purchase from the firms in our sample during the period of the experiment.
Sample size (or number of clusters) by treatment arms
137 firms in treatment and 137 in control
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number