Researchers discover why small businesses get more ‘love’ online

In an international study published in the peer-reviewed Journal of Marketing, researchers found that smaller companies receive more favourable online word-of-mouth than larger ones – even when the customer experience is identical.  

The reason? People feel more empathy toward small businesses and are more inclined to support them with better reviews. 

“Interestingly, this isn’t because consumers are more critical of big businesses, but rather because they are less inclined to leave positive reviews for big businesses and more likely to do so for small businesses after a good experience,” notes Chris Hydock, co-author of the study and Assistant Professor of Marketing at the university. 

The research analysed millions of consumer reviews from Yelp, Amazon, Twitter and Instagram. Even when controlling for experience quality – how good or bad the service or product was – smaller companies consistently received higher ratings than their larger counterparts. 

Through experiments and real-world data, the researchers discovered that customers were more likely to write glowing reviews about small companies after a good experience and less likely to post a negative review after a bad one. 

Positivity bias for small businesses 

“This creates an overall positivity bias for small businesses,” Hydock explains. “People empathise with them more, and that empathy influences not only whether they leave a review, but what kind of review they leave.” 

According to the study, empathy drives what the researchers call a ‘selection effect’. This is when consumers feel a personal connection with smaller businesses and are more motivated to help them.  

Conversely, people are more critical of larger companies, which they tend to see as less personable or needing support. The study identified the problem and tested ways larger companies could narrow the empathy gap. 

“For everyday consumers, lower ratings for big chain businesses might not reflect their true quality, while reviews for small, well-known establishments could be somewhat inflated,” Hydock observes. 

Companies that responded to reviews more personally and emotionally – for example, by using customers’ names, expressing genuine concern and writing thoughtful replies – could boost their review scores. These kinds of empathetic interactions helped humanise the brand and made customers feel more connected. 

“We highlighted strategies that big companies can use to boost positive online reviews, such as employing empathetic language and addressing consumers by their real names in responses. These aren’t expensive fixes. Simply being more responsive and writing back in a warmer tone can shift how people feel about a company – and how they rate it,” Hydock says. 

You can find out more about the study here.