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Purpose Scholars have proposed that the negative effects of service failures can be countered by developing and maintaining high quality customer-company relationships or by providing excellent service recovery to customers. While both strategies have been proposed as ways to overcome the negative effects of service failures, there are only a limited number of studies that have examined their joint effects. The purpose of this paper is to fill this gap by investigating the impact of these two strategies jointly on rumination (brooding and reflection), anger and customer forgiveness (revenge, avoidance and benevolence). Design/methodology/approach The experimental design used in this study is an adaptation of Mattila’s (2001) research design, which manipulated both the level of service recovery and relationship. A total of 677 respondents were assigned randomly to one of the six experimental conditions. Multi-group structural equation modeling was employed to estimate the proposed model across three relational conditions. Findings This study suggests that the buffering effects are directly triggered by the impact of relationships, whereas, the magnifying effects are primarily related to the customer’s cognitive processes. This study reveals multiple forms of concurrent buffering and magnifying effects in service failures. Originality/value The findings of the study led to a classification system of the various forms of buffering and magnifying effects of relationships in the event of service failures. The four active roles of relationships are identified as damage control, benefit catalyst, benefit attenuator and damage catalyst. This proposed typology breaks new ground for theorizing about relationship utilization in negative incidents.

In the retail industry, status‐based loyalty programs (SBLP) are commonly used as an important marketing tool to award elevated status to customers who exceed certain level of spending. In contrast to previous studies that have considered “target and bystander” and “member–non‐member” differentiation, this study responds to the need to account for the dynamics in across‐tier effects in loyalty programs (LPs). By undertaking a scenario‐based experiment that focuses on a “face‐to‐face” across‐tier social event, this study examines the joint effects of exclusivity, status visibility and social comparison on LP members’ status perception and willingness to spend. Contrary to prior beliefs that the beneficial effects for targets (e.g., VIP members) in status hierarchies are offset by the negative effects on bystanders (e.g., non‐VIP members), this study concludes that situations when social comparisons occur in SBLPs are not necessarily zero‐sum games. Ultimately, this study uncovered two distinct status‐reinforcing mechanisms–“aspiring” and “boasting”–which LP members may experience in SBLPs. The outcome of this study highlights important implications for companies to pursue different strategies aimed at enhancing members’ status perceptions.

Purpose -Via an experimental approach, this study therefore seeks to examine the effects of outcome valence upon service perception in the higher education setting where academic services form the core service element. To further extend this inquiry, the purpose of this paper is to explore the carryover effect of these emotional states to a subsequent unrelated service encounter which is classified as a peripheral service element which is hedonic in nature. Design/methodology/approach -By using a simulated laboratory experimental procedure involving 300 participants, the authors examined the extent to which a student's feeling toward an online test result has a bearing upon the teaching evaluation and a subsequent service experience in a branded retail context. Findings -The results gathered from this study highlight the variability of the carryover effect of outcome valence from a work-related service context that serves as incidental emotions to a subsequent unrelated service encounter which is hedonic in nature. From the results gathered, variations were observed in relation to the dynamics of outcome valence in affecting core service evaluation where teaching quality was assessed, and in the peripheral service context in the form of retail experience at a branded cafè. From the basis of these findings, the psychological role of retail stores operating in a valence-oriented industry such as the higher education is discussed in this study. Practical implications -Essentially, this study contributes to the academic literature and managerial practices by extending the knowledge in the dynamics of valence and its impact upon service perceptions. Originality/value -This study adopts a simulated experimental design to assess the transference effect of valence in specific service encounters. This methodological approach offers greater reliability compared to existing studies which undertake a retrospective approach via questionnaire survey to examine outcome valence in service experiences. The results from this study provide important managerial implications by assessing the impact of valence upon customer satisfaction ratings which are commonly used for performance appraisal of service staff members. Additionally, the outcome of this study potentially assist managers to account for incidental emotions which may have an impact upon customer's service experience.