Service recovery's impact on customers next-in-line

Abstract

Purpose -Previous research considers service recovery as a one-on-one interaction between a service provider and a complaining customer. However, customers frequently complain at the place where they receive the service, making an investigation of the impact of a service recovery on observing customers necessary. Using observational learning theory and attribution theory as theoretical anchors, this paper examines whether observing a service recovery influences the observing customers' satisfaction and repurchase intentions. In addition, this paper tests whether service quality perceptions mediate, and customers' locus of control attributions moderate these relationships. Design/methodology/approach -Study 1 tests the main hypothesis using a scenario-based experiment in two settings (restaurant, retail). Study 2 further elaborates on these findings using a scenario-based experiment in a hotel setting. Findings -The findings show that the negative consequences of a failed recovery extend beyond the complaining customers to observing customers, whereas the positive consequences of observing a satisfactory recovery do not influence the observing customer when compared to observing a failurefree service delivery. These relationships are driven by the service quality information customers extract from observing a service recovery. In addition, the results indicate that the negative spill-over effects are attenuated if the observing customer gets information about who caused the failure. Originality/value -From a theoretical point of view, this study contributes by outlining service recovery's different impacts on complaining and observing customers: whereas service recovery forms a critical for complaining customers, it only acts as a dissatisfier for observing customers. In addition, it is the first to test a potential explanation for why observing a service recovery leads to lower customer outcomes, and provides insights about how service providers might attenuate the negative spill-over effects of a failed recovery.

Who is talking, who is listening? Service recovery through online customer-to-customer interactions

“…This concurs with the offline observations of Van Vaerenbergh et al (2013). Although we do not know how the stories of service incidents posted online might affect those silent online viewers, we have observed that online participants in the C2C forum do re-shape their perceptions and expectations about a service and a company.…”

“…However, research is beginning to examine the impact of one customer's experiences of service recovery on the attitudes and behaviours of other customers (Van Vaerenbergh et al, 2013). Online channels, such as customer complaint forums, provide service customers with the opportunity to interact with one another, learn from other customers' complaints, and participate in the service recovery process.…”

Why and when witnessing uncivil behavior leads observers to punish frontline employees and leave the firm

“…Additional studies have examined reactions to overheard service failures and failed recoveries involving interactions between either adjacent customers/frontline employees (path e) or adjacent customers/managers (path g). For example, across two studies, Van Vaerenbergh et al (2013) find that customers who observe frontline employees treat a complaining customer in an uncivil manner report lower satisfaction, perceived service quality, and return intentions, with stronger effects when the customer is not to blame for the failure. More recently, Mattila et al (2014) show that observers who witness a manager respond in an uncivil manner to a complaining customer report greater anger and negative word of mouth, and lower perceived justice, return intentions, and positive word of mouth, effects which were stronger when observers adopted an experiential (vs. rational) processing frame.…”

“…Given their ubiquity, an important question for hospitality managers and researchers is how, why, and when observing uncivil behaviors influences customers. Notably, a growing number of studies reveal that observed incivilities lead to anger, reduced satisfaction, reluctance to return to and recommend a service provider, and a desire to "get even" with the offending party (e.g., Casidy and Shin 2015;Mattila, Hanks, and Wang 2014;Melián-González and Bulchand-Gidumal 2017;Porath et al 2010Porath et al , 2011Van Vaerenbergh, Vermeir, and Larivière 2013;Wan, Chan, and Su 2011).…”

A Development of a Retail Service Quality Model Integrating Its Antecedents and Consequences

“…Service recovery management plays an important role in determining whether or not the customer is satisfied with his or her retail service experience. Successful complaint management is likely to lead to positive evaluations of the retailer and an increase in satisfaction (Hsin-Hui, Yi-Shun, and Li-Kuan, 2011; Levesque and McDougall, 1996;Nyer, 2000) and thus repurchasing likelihood (Fornell and Wernerfelt, 1987;Vaerenbergh, Vermeir, and Lariviere, 2013) since it gives complaining customers the opportunity to let loose their anger and to redress failed shopping experiences. Noticeably, in an attempt to measure customer responses to service failure and post-recovery satisfaction, Goodwin and Ross (1992), in an experiment, manipulate levels of complaint outcome, apology and voice regarding service in dentistry, airlines, auto repairs and restaurants.…”