Relating Word-of-Mouth to Corporate Reputation

Abstract

This paper explores the relationship between customer-generated word-of-mouth and corporate reputation. After a concise literature review, we present several insights from a multiple case study of 3 organizations. Our main finding is that customer dissatisfaction and negative word-of-mouth (NWOM) are thought to have strong downside consequences for corporate reputation. Positive WOM does not appear to have equivalent upside significance for corporate reputation. NWOM often occurs as customers express dissatisfaction because of substandard customer service. However, it is when these issues or other negatively connoted stories find their way into the public domain that reputation suffers. Fear of reputational damage causes great anxiety to the organisations' senior management. Reputations are shown to be fragile. Damage limitation strategies are implemented in all three organisations.