Consider the Source: Comparing Customer Reactions to Hearing about a Company Transgression by Word-of-Mouth vs. through the Media

Abstract

This paper investigates the effects that the communication source has on a customer's perception of a company transgression. A company transgression can be viewed as any act that negatively affects or disappoints customers (Huber et al., 2010). The authors describe the results of a critical incident study in which the participants described a company transgression that he or she heard about through another source, whether communicated via word-of-mouth or through various media outlets. The authors categorize these incidents to differentiate how customer reactions and thus the customer-company relationship change depending on how a customer hears about the transgression. Results of this study indicate that even if a customer did not experience a transgression directly, the customer may have an adverse reaction to the company. Major differences are discussed between the sources of information (word-of-mouth communication vs. through the media).