The Impact of Social Closeness and Complaint-Reaction-Time on Word-of-Mouth

Every day, millions of consumers observe online complaints and adapt their purchase-related intentions accordingly. This work sheds light on the role of (a) social closeness to the complainant and (b) reaction time of the recovering company on observing consumers’ inclination to spread negative and positive word-of-mouth (PWOM and NWOM). We ran a 2 (social closeness: close vs. distant) x 2 (reaction time: immediate vs. delayed) between-subjects online experiment with participants observing an online complaint about a COVID-19 related service failure at a fictitious hotel. The results showed that observers show higher NWOM if they perceive high – as compared to low – closeness towards the complaining person as well as if the company has a delayed – as compared to an immediate – reaction. However, these effects do not occur for PWOM. Implications for theory and practice on the diversity of PWOM vs. NWOM are discussed.