Consumers frequently consult online reviews as an essential step when deciding where to shop, dine, or obtain various services. However, recent research from Tulane University has shed new light on the underlying factors that shape these reviews. Contrary to popular belief, the study reveals that the numerical ratings of products and services do not solely reflect their quality. Instead, the size of the company behind them has a significant influence on the way people perceive and respond to their experiences. Published in the Journal of Marketing, the study offers a comprehensive, international perspective on how business size interacts with online reputation.

The findings indicate that smaller businesses consistently receive more favourable online reviews than their larger competitors, even when the level of service or product quality is virtually identical. This discrepancy is not due to any inherent difference in performance but arises from a deeper psychological driver: empathy. Customers tend to feel a greater sense of connection and sympathy towards smaller businesses, and this sense of empathy translates directly into more supportive and positive online feedback. This nuanced understanding of consumer psychology suggests that reviews are as much a reflection of our social biases as they are of actual product quality.

Chris Hydock, assistant professor of marketing at Tulane University’s A. B. Freeman School of Business and co-author of the study, elaborated on the team’s findings by explaining that larger companies receive lower average ratings not because they inspire more criticism but because people are simply less motivated to offer them positive reviews. In contrast, smaller businesses evoke a desire in consumers to see them flourish, particularly after a pleasant experience. The difference is striking, demonstrating that our instinct to champion the underdog is a powerful force in shaping the digital landscape of consumer opinion.

To ensure the robustness of their conclusions, the researchers analysed millions of consumer reviews on platforms like Yelp, Amazon, Twitter, and Instagram. By meticulously controlling for the actual quality of the customer experience—whether it was exceptionally good or disappointing—the team could isolate the impact of company size on review scores. The data repeatedly confirmed that smaller businesses attract more generous ratings. This suggests that the empathy consumers feel for smaller enterprises influences whether they leave a review and the tone and substance of that feedback.

One of the most interesting aspects of the study lies in how this empathy-driven bias shapes both positive and negative reviews. The researchers discovered that customers are far more likely to leave glowing reviews for small businesses after a good experience and are more inclined to withhold negative feedback if things go awry. This phenomenon, described as a “positivity bias,” speaks to a broader tendency among consumers to offer moral and emotional support to smaller enterprises. In contrast, large corporations are seen as less deserving of this same leniency. The researchers explored how large companies might bridge this empathy gap through practical strategies to humanise their brands and foster more meaningful connections with consumers.

Indeed, the study suggests that larger businesses can bolster their online reputations by adopting warmer, more personal communication styles. Hydock highlighted that companies responding to reviews with genuine empathy—using the reviewer’s name, expressing authentic concern, and crafting sincere replies—often see a notable improvement in their online ratings. Such thoughtful interactions help transform impersonal corporate entities into relatable, humanised brands. For businesses navigating the competitive terrain of online reputation management, these insights underscore the importance of empathy in building trust and securing favourable word-of-mouth, regardless of their size or market dominance.

More information: Chris Hydock et al, The Effect of Company Size on Aggregate Word of Mouth Valence, Journal of Marketing. DOI: 10.1177/00222429251320603

Journal information: Journal of Marketing Provided by Tulane University