The Effect of Company Size on Aggregate Word-of-Mouth Valence.

The article investigates how company size affects aggregate online word of mouth (WOM) valence, defined as the average sentiment or star rating of consumer reviews and social media posts. Across 12 studies involving observational data from platforms like Yelp, Amazon, Twitter, and Instagram, as well as controlled experiments, the research finds a consistent negative relationship between company size and WOM valence, even when controlling for experience quality. This effect arises because consumers feel greater empathy toward smaller companies, which increases their likelihood to share positive WOM after high-quality experiences and decreases sharing after low-quality experiences, a process termed the selection mechanism. Larger companies can mitigate this negative effect by employing WOM response strategies that evoke empathy—such as responsiveness, emotional language, personalized replies, and addressing consumers by name—while smaller companies risk losing empathy and positive WOM if they face corporate social irresponsibility (CSI) issues. The findings have implications for managers and consumers in interpreting WOM and highlight the importance of empathy-driven communication strategies.