Relating Word-of-Mouth to Corporate Reputation

Publisher:
University of Technology Sydney
Publication Type:
Journal Article
Citation:
Public Communication Review, 2012, 2 (2), pp. 3 - 16
Issue Date:
2012-01
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This paper explores the relationship between customer-generated word-of-mouth (WOM) and corporate reputation. After a concise literature review, we present several insights from case study analysis of three organizations. Our main finding is that customer dissatisfaction and negative word-of-mouth (NWOM) are thought to have strong downside consequences for corporate reputation. Yet, 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 with the potential of wider electronic WOM spread through the Internet that reputation suffers. Fear of reputational damage causes great anxiety to the organizations' senior management. Reputations are shown to be fragile. Damage limitation strategies are implemented in all three organisations.
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