An experimental investigation of justice-based service recovery on customer satisfaction, loyalty, and word-of-mouth intentions

Service recovery is related to many important organizational outcomes such as customer satisfaction, loyalty, and profitability. Within the theoretical framework of organizational justice, an experiment using a simulated "live" service failure was used to assess the effects of justice-based service-recovery strategies on customer satisfaction, loyalty, positive word-of-mouth intentions, and negative word-of-mouth intentions. Analysis indicated that strategies including interactional justice, distributive justice, and a combination of these were equally effective in maintaining customer satisfaction, loyalty, and positive word of mouth, and minimizing negative word of mouth after a service failure. No support for the service recovery paradox, that is, increased satisfaction following service failure and recovery compared to never having a problem, was found. Satisfaction and loyalty for those in the failure conditions were equal to, although not higher than, in the no-failure control condition. Practical implications for organizational practices are discussed.     

Do it right this time: the role of employee service recovery performance in customer-perceived justice and customer loyalty after service failures

Integrating justice and customer service literatures, this research examines the role of customer service employees' behaviors of handling customer complaints, or service recovery performance (SRP), in conveying a just image of service organizations and achieving desirable customer outcomes. Results from a field study and a laboratory study demonstrate that the dimensions of SRP--making an apology, problem solving, being courteous, and prompt handling--positively influenced customer satisfaction and then customer repurchase intent through the mediation of customer-perceived justice. In addition, service failure severity and repeated failures reduced the positive impact of some dimensions of SRP on customer satisfaction, and customer-perceived justice again mediated these moderated effects.     

Sales Organization Recovery Management and Relationship Selling: A Conceptual Model and Empirical Test

This paper presents and tests a model of recovery management practices in business-to-business (B2B) sales organizations. The linkages between organic and mechanistic approaches are integrated to provide a more comprehensive conceptualization of sales organization recovery management relationships than currently exists in the literature. Responses from 177 B2B sales managers indicate that maintaining a positive service recovery culture, analyzing service failures, implementing recovery strategies, and monitoring, evaluating, and seeking feedback about recovery efforts are linked with important customer and financial outcomes. Results indicate the importance of proactive integration of service recovery concepts and behaviors into relationship selling efforts.     

Consumer complaints and recovery through guaranteeing self‐service technology

Self‐service technologies are shaping the future of consumer behaviour, yet consumers often experience service failure in this context. This conceptual paper focuses on self‐service technology failure and recovery. A consumer perspective is taken. Recovering from self‐service technology failure is fraught with difficulty, mainly because of the absence of service personnel. The aim of this paper is to present a theoretical framework and associated research propositions in respect to the positive role that service guarantees can play in the context of self‐service technology failure and recovery. It contributes to the consumer behaviour domain by unifying the theory pertaining to consumer complaint behaviour, service recovery, specifically consumers' perceptions of justice, and service guarantees, which are set in a distinctive self‐service technology context. It is advanced that service guarantees, specifically multiple attribute‐specific guarantees, are associated with consumer voice complaints following self‐service technology failure, which is contingent on the attribution of blame in the light of consumers' production role. Service guarantees are argued to be associated with consumers' perceptions of just recovery in the self‐service technology context when they promise to fix the problem, compensate only when the problem cannot be remedied, offer a choice of compensation that is contingent on failure severity, afford ease of invocation and collection, and provide a personalised response to failures. Previous classifications of SSTs are used to highlight the applicability of guarantees for different types of SSTs. Managerial implications based on the theoretical framework are presented, along with future research directions. Copyright © 2011 John Wiley & Sons, Ltd.     

Does service failure influence customer loyalty?

There is a general consensus that customer loyalty to service providers is not solely dependent upon their level of satisfaction or dissatisfaction. However, the identified antecedents of loyalty remain, at best, highly speculative. The aim of this extensive literature review is to give some understanding of the nature of customer loyalty and the antecedent effects of service dissatisfaction. The research reviewed suggests that customer loyalty is an attitudinal state, reflecting value, trust and commitment within supplier–customer relationships. Satisfaction is one of several antecedents of loyalty. A key influence on loyalty is the offer of unique value‐delivering advantages not provided by competitors. Thus firms need to develop positive value‐based exit barriers to achieve loyalty. When service failures occur, the recovery process is likely to have a greater impact on loyalty than the original service failure. The key to successful recoveries was found to be the customer's perception of ‘fairness’. Recovery programmes must get it right first time. Customers who remain dissatisfied after a complaint has been handled are more dissatisfied than if no recovery attempt had been made. Dissatisfaction and customer satiation are major causes of a customer's exit. The solution to customer satiation is dynamic value creation. Collection and monitoring of customer data is needed for success and two‐way communication is vital. Copyright © 2002 Henry Stewart Publications.     

The link between social interactions and trust recovery in customer–business relationships

Trust plays a crucial role in interpersonal relationships, including customer–company relationships, where the customer expects that a company will behave predictably in any particular situation. Companies do not always fulfill customers' expectations and thereby breach the trust relationship. To avoid negative consequences of this trust violation, companies may issue a formal apology as one possible path to regaining customer trust. In the same way, a previous social interaction, which can increase the customer's levels of oxytocin, can help to recover trust after service failures. In this study, three experiments were conducted as follows: the first manipulating a simulated social interaction with images; the second manipulating a physical social interaction, (i.e., a hug); and the third with exogenous oxytocin administration. The results showed that both physical interaction, (i.e., a hug) and simulated social interaction, (i.e., images of people interacting with each other) had a positive effect on customer trust recovery and provided support for oxytocin release as the underlying mechanism in this process. This research contributes to understanding of the link between social interactions and trust by elucidating the effects of both simulated and physical interactions on trust recovery.     

Customer reactions to encountering consecutive service failures

According to previous studies, many consumers in Taiwan have experienced consecutive service failures. Despite these failures, many consumers still remain loyal to a service provider for a variety of reasons, such as money deposits, contractual agreements, associated costs, time constrains, and health concerns. We attempt to investigate the emotional reactions and expectations of consumers after they have experienced two consecutive service failures. Our findings reveal that for high‐involvement services, although customers display strong negative emotional reactions after each service failure, the reaction to the second service failure is less intensive than that to the first one. Furthermore, our findings show that as long as the products or services remain in use, customers tend to retain high levels of expectation in regard to the service provider. Copyright © 2012 John Wiley & Sons, Ltd.     

A process model of buyer responses to salesperson transgressions and recovery efforts: the impact of salesperson orientation

Despite the damaging effects often associated with salesperson transgressions, our understanding of how buyers respond to these transgressions and the recovery efforts that typically follow is limited. The authors address this shortcoming across two studies of professional buyers. In the first, the authors examine buyers’ responses to salesperson ethical and service transgressions as moderated by their perceptions of the salesperson (i.e. whether they perceive the salesperson as being selling-oriented (SO) or customer-oriented (CO)). In the second study, the authors contrast the effects of an apology versus compensation in examining buyers’ responses to the overall transgression and recovery episode. Although study results indicate that a customer orientation amplifies buyers’ responses to the initial transgression, they also indicate that buyers’ responses to the overall episode are primarily a function of whether the recovery effort conforms to their expectations. Hence, while favorable salesperson perceptions (i.e. being perceived as CO) are detrimental in the context of the initial transgression, they are beneficial in the context of the overall transgression and recovery episode.     

More Than Happy to Help? Customer‐Focused Emotion Management Strategies

This paper investigates the impact of customer service representative (CSR) customer‐focused emotion management strategies on expressed customer emotions, beyond the influences of emotional contagion. We propose that problem‐focused strategies (situation modification and cognitive change) are likely to reduce the intensity of negative customer emotions and increase the intensity of positive customer emotions, whereas emotion‐focused strategies (attentional deployment and modulating the emotional response) will have the opposite impact. Further, we propose that customer negative emotions will affect the choice of strategies CSRs employ. Based on evaluator ratings of recorded customer service calls (N= 228), our findings confirmed the positive effects of problem‐focused strategies and the negative effects of emotion‐focused strategies on customer‐expressed emotions. In addition, we found that initial customer emotions affected the strategy used by the CSR, whereby negative emotions expressed by the customer reduced the use of the most effective strategy and increased the use of the least effective strategy.     

Beyond conflict: Functional facets of the work-family interplay

The present paper deals with three positive facets of the work-family interplay, i.e., transfer of competencies, transfer of positive mood, and cross-domain compensation. The latter refers to the experience that engagement in one domain helps dealing with failures in the other domain. In two correlational studies (N₁ = 107 working mothers, N₂ = 146 working men and women), cross-domain compensation predicted domain-specific well-being even when we controlled for work-family conflicts and the two other positive facets (viz., transfer of competencies and positive mood). In an additional experiment (N₃ = 63 working men and women), which exclusively focused on compensation, participants were asked to remember a job-related failure. Then they were instructed to think about a positive job-related experience (i.e., intradomain compensation) or family-related experience (i.e., cross-domain compensation). Compared to a control group, both experimental groups showed faster emotional recovery, with cross-domain compensation being a slightly more effective strategy at the beginning of that recovery.     

When the customer is wrong: A review of research on aggression and sexual harassment in service encounters

Early theory and research on workplace aggression and sexual harassment generally focused on workers as both the source and the target of these behaviors. More recently, however, there has been a recognition that such behaviors are also exhibited by customers. This paper reviews research on customer aggression and sexual harassment in service contexts along the following lines: 1) Antecedents of customer misbehavior as reflected in organizational perceptions (e.g., denial of customer misbehavior, structure of service roles), customer motives (e.g., low level of perceived risk) and role-related risk factors (e.g., dependence on customer, working outside the organization, climate of informality); 2) The effect of customer aggression and sexual harassment on service provider well-being, work-related attitudes and behavior; 3) Coping strategies used by service providers in response to customer aggression and sexual harassment (i.e., problem-solving, escape-avoidance, support-seeking); and 4) A comparison between the main characteristics of aggression and sexual harassment by customers and by insiders.     

关系规范对消费者抱怨意愿及潜在动机的影响模型

现有的关于向企业进行抱怨的研究均建立在“理性人”的假设之上, 而忽视了消费者同时作为“社会人”需要遵循一定的规范。本文引入关系规范的概念(共有关系规范, 交换关系规范), 通过实验的方法探究其对消费者的抱怨意愿及潜在动机的影响。实验一的结果显示在服务失误水平低的情况下, 共有关系规范下的被试相对于交换关系规范下的被试更乐意向企业抱怨, 而在服务失误水平高的情况下, 这种差异不显著。实验二进一步验证了这种关系, 并发现共有关系规范下的被试向企业抱怨, 是为了帮助其发现和改进服务中存在的问题, 以提高服务质量, 具有利他动机。     

Feeling bad and doing good: The effect of customer mistreatment on service employee's daily display of helping behaviors

Mistreatment by customers is a common occurrence for many frontline service employees. Although some evidence suggests that employees engage in dysfunctional workplace behaviors as a result of mistreatment, others studies have suggested that employees may cope with such negative experiences by helping others. Drawing on negative state relief theory, we conducted 2 studies to test these relationships and examine whether service employees cope with negative emotions arising from such daily customer mistreatment by engaging in helping others. In Study 1, daily surveys from 70 restaurant employees showed that daily customer mistreatment predicted the experience of negative moods the next morning, which, in turn, led to higher levels of coworker helping the next day. In Study 2, daily surveys from 54 retail employees showed that daily customer mistreatment led to higher customer helping the next day, but only when customer orientation was high. Our results further show that helping behavior was associated with elevated positive affective experiences and that the proposed relationships differ depending on whether customer mistreatment is measured at a daily or a cumulative perspective. Specifically, cumulative customer mistreatment over time decreased general helping. These findings are discussed in relation to employees' coping strategies towards acute and cumulative mistreatment.     

Better than ever? Employee reactions to ethical failures in organizations,and the ethical recovery paradox

This research examines organizational attempts to recover internally from ethical failures witnessed by employees. Drawing on research on service failure recovery, relationship repair, and behavioral ethics, we investigate how witnessing unethical acts in an organization impacts employees and their relationship with their organization. In two studies—one in the lab and one in the field—we examine the extent to which it is possible for organizations to recover fully from these ethical lapses. Results reveal an ethical recovery paradox, in which exemplary organizational efforts to recover internally from ethical failure may enhance employee perceptions of the organization to a more positive level than if no ethical failure had occurred.     

The mediating role of engagement and burnout in the relationship between employees' emotion regulation strategies and customer outcomes

Service employees' emotional display plays an important role in service interactions, but little is known about the effects of employee's emotional regulation strategies on customer outcomes. This study examines a model in which emotion regulation is associated with customer satisfaction and loyalty intentions as mediated by employee burnout and engagement. Data collected from 135 employee–customer dyads following service interactions was analysed with structural equation modelling. The results show that engagement fully mediates the relationship of deep acting, and burnout partially mediates the relationship of surface acting, with customer satisfaction and loyalty intentions.     

Perfectionism and coping with daily failures: positive reframing helps achieve satisfaction at the end of the day

Differentiating perfectionistic strivings and perfectionistic concerns, the present study examined how perfectionism predicts what coping strategies people use, when dealing with failures, and how perfectionism and coping influence people's satisfaction. A sample of 149 students completed daily reports for 3–14 days, reporting the most bothersome failure they experienced during the day, what strategies they used to cope with the failure, and how satisfied they felt at the end of the day. Multilevel regression analyses showed that perfectionistic concerns predicted more frequent use of self-blame, less frequent use of active coping and acceptance, and higher satisfaction at the end of the day, whereas perfectionistic strivings predicted less frequent use of self-blame and higher satisfaction. Although positive reframing, acceptance, and humor predicted higher satisfaction for all students, further analyses showed that positive reframing coping was particularly helpful for students high in perfectionistic concern. The findings suggest that accommodative coping strategies are generally helpful in dealing with personal failures, with positive reframing being a coping strategy that works particularly well for people high in perfectionistic concerns (who are prone to dissatisfaction) to achieve higher satisfaction at the end of the day.     

Perfectionism and coping with daily failures: positive reframing helps achieve satisfaction at the end of the day

Differentiating perfectionistic strivings and perfectionistic concerns, the present study examined how perfectionism predicts what coping strategies people use, when dealing with failures, and how perfectionism and coping influence people's satisfaction. A sample of 149 students completed daily reports for 3-14 days, reporting the most bothersome failure they experienced during the day, what strategies they used to cope with the failure, and how satisfied they felt at the end of the day. Multilevel regression analyses showed that perfectionistic concerns predicted more frequent use of self-blame, less frequent use of active coping and acceptance, and higher satisfaction at the end of the day, whereas perfectionistic strivings predicted less frequent use of self-blame and higher satisfaction. Although positive reframing, acceptance, and humor predicted higher satisfaction for all students, further analyses showed that positive reframing coping was particularly helpful for students high in perfectionistic concern. The findings suggest that accommodative coping strategies are generally helpful in dealing with personal failures, with positive reframing being a coping strategy that works particularly well for people high in perfectionistic concerns (who are prone to dissatisfaction) to achieve higher satisfaction at the end of the day.     

Transformational leadership and customer service: A moderated mediation model of negative affectivity and emotion regulation

Integrating theories from leadership, emotion management, affectivity, and customer service, this study examines how transformational leadership leads to favourable customer intentions via the mediation of service employees' emotion regulation, job satisfaction, and their service performance and via the moderation of employee negative affectivity. Results obtained from data of 204 matched sets of managers, service employees, and customers show that the effect of transformational leadership on amplification of pleasant emotions was conditioned on service employees' negative affectivity. Employee service performance partially mediated the effect of job satisfaction on customer outcomes. Finally, overall results reveal that transformational leadership and amplification of pleasant emotions were more strongly related to the customer outcomes, as mediated through the intervening variables in the model, when negative affectivity was high than when negative affectivity was low. Results have implications for how service workers with negative affectivity can manage their emotions to achieve effective service outcomes through interactions with a leader, how the effect of transformational leadership can be bounded, and how transformational leadership and emotion regulation are relevant to customer service.     

Not just apologizing: The impact of complaint handling on sustained participation behavior in live-streaming shopping

In a live-streaming shopping community, the quality of complaint handling may significantly influence relationship recovery between the consumer and retailer (or streamer) following service failures. Despite the significant progress made in previous works, there are still research gaps in the study of customer complaint handling and customers' post-behavior. Therefore, this study introduced the important variable “swift-guanxi” (SG) to explore the relationship between complaint handling and the sustained participation of customers. Data were collected through both online and offline methods. A structural equation model (SEM) was used to test the relevant hypotheses. The results from assessing these data indicate that the factors of conversational human voice (CHV), reply length (RL) and perceived justice (PJ) all exert a significant influence on SG, which in turn affects the sustained participation behavior (SPB) of customers. In addition, complaint publicization (CP) has a negative impact on this behavior.     

Linking Service Climate and Disconfirmation of Expectations as Predictors of Customer Satisfaction: A Cross‐Level Study1

Research addressing customer satisfaction has not been conducted within an integrated framework. Two approaches have been developed separately with different levels of construct and analysis: organizational behavior and consumer behavior. Our research study provides an initial step in developing integrative strategies with the joint consideration of service climate and disconfirmation of expectations. We link these 2 concepts to customer satisfaction with services, using a cross‐level approach. Data from 105 work units and 1,033 customers confirmed the existence of a dual corridor of relationships, with independent and significant links from disconfirmation and service climate to customer satisfaction. Implications for practice and future research are discussed.