Effect of service recovery on customers’ perceived justice,satisfaction, and word-of-mouth intentions on online shopping websites

As consumers become better informed and more demanding about their purchase of services, service provider's failure to satisfy all consumers during delivery of service is unavoidable. Consequently, to alleviate consumer dissatisfaction that results from service failure has become important. However, empirical consensus has been lacking on the effects of various service recovery activities. Thus, this study examines the impact of different types of service recovery on customers’ perceptions of justice, post-recovery satisfaction, and word-of-mouth (WOM) intentions. The results indicated that consumers’ perceptions of distributive and interactional justice differ by the types of service recovery and supported significant relationships among perceptions of justice, satisfaction, and WOM intentions. The results implied that consumers respond differently to different types of service recovery and that consumers particularly favor apology among types of service recovery.     

The journey from customer participation in service failure to co-creation in service recovery

Customer participation is growing into a widespread phenomenon in the service context. Despite the inherent significance of customer expectations to service failures in the high-participation service context, scant research exists on studying the links among customer participation, customer expectation of service recovery, and service outcomes (e.g., word-of-mouth or WOM). Even more pressing is the lack of research on the type of service recovery that can countervail the inflated customer expectation of service recovery and restore service outcomes. This research demonstrates that high contribution of customers in the beginning of service provision procedure leads to high recovery expectations and low satisfaction. The results also support that co-created service recovery (CCS-R), as contrasted to firm and customer recoveries, has a greater positive effect on satisfaction. Further, the contrasting impacts of each service recovery type on positive and negative WOM are presented. An experiment was conducted using service failure and recovery scenarios. Regression analysis was used to test the hypotheses. The current research has some important implications for scholars and managers who wish to effectively recover failed high-participation service encounters.     

Customer participation in service recovery: a meta-analysis

Research on customer participation in service recovery is surging, yet empirical examinations provide mixed results. A meta-analysis of 30 independent samples reported in 21 studies (N?=?7872) shows that the effect sizes for the relationships between customer participation in service recovery and customer outcomes are rather weak. We also find that customer participation in service recovery has an indirect effect on satisfaction with service recovery via distributive justice and procedural justice, but not via interactional justice. Conversely, customer participation in service recovery has an indirect effect on overall satisfaction via distributive justice and interactional justice, but not via procedural justice. Finally, the effectiveness of customer participation in service recovery is stronger when customers participate in the outcome of the recovery and for customers with an Eastern cultural background, but weaker when additional compensation is offered and in online settings.     

Employee versus supervisor ratings of performance in the retail customer service sector: Differences in predictive validity for customer outcomes

Based on data from Maxham and Netemeyer [Maxham, J. G. and R. G. Netemeyer (2003). “Firms Reap What They Sow: The Effects of Employee Shared Values and Perceived Organizational Justice on Customer Evaluations of Complaint Handling,” Journal of Marketing, 67, 46-62], the authors present two field samples to examine predictive validity differences of service employee ratings of their performance versus supervisor ratings of employee performance with respect to customer satisfaction and customer likelihood of spreading positive word-of-mouth (WOM) after a service recovery attempt. The results generally show that supervisor ratings are more strongly positively related to customer satisfaction and WOM than are employee ratings of their own performances. The results also show that both supervisor ratings and employee ratings are related to customer satisfaction and WOM in a curvilinear fashion (as well as linear fashion). Employee extra-role performances (toward customers and the firm) show increasing returns at the higher levels of performance, and employee in-role customer performance generally shows a decreasing return at the higher level of customer in-role performance.These results suggest two managerial implications. First, supervisor ratings of customer service employee performances may be the preferred form of measurement for predicting customer outcomes. Second, maximizing in-role performance inputs may have decreasing returns for customer evaluations in the service recovery context; but maximizing extra-role performance inputs may actually “delight” customers, i.e., increasing returns for customer evaluations.     

Perceived justice of service recovery strategies: Impact on customer satisfaction and quality relationship

This article aims to build on previous research analyzing the effects of perceived justice on customers' satisfaction with service recovery and the attitudinal consequences of the recovery strategies firms adopt after service failures occur. The results obtained from a conceptual model developed for the mobile‐phone sector support the idea that justice perceptions positively influence satisfaction with service recovery. Other findings are that satisfaction with service recovery positively affects trust and commitment, and that these two variables, in turn, positively affect overall customer satisfaction. Finally, the results also suggest that positive past experiences mitigate the effects of inadequate service recovery strategies on the quality of the relationship with the customers. © 2010 Wiley Periodicals, Inc.     

The antecedents of complaint behaviour for Brazilian and French consumers of services

Using a cross‐cultural approach, this study investigates customer satisfaction after a service failure and recovery experience, considering (i) the influence of perceived justice on satisfaction; (ii) the impact of satisfaction on consumer repurchasing and complaint intentions; (iii) the moderating role of the customer cultural orientation; and (iv) the relevance of contextual variables. Based on a survey of 298 consumers from Brazil and France, the results indicated that (i) distributive and interactional justice influenced satisfaction; (ii) satisfaction was a significant predictor of repurchase intentions; (iii) satisfaction influenced third‐party, private and voice responses; and (iv) the level of the customer relationship, the severity of the failure and the responsiveness of the firm were significant contextual variables. Moreover, the individual‐level analysis suggested that only power distance cultural orientation was a significant moderator.     

The influence of the source and valence of word-of-mouth information on post-failure and post-recovery evaluations

The purpose of this paper was to better understand the impact that word-of-mouth recommendations (WOM) source (i.e., personal vs. impersonal sources) and WOM valence (average vs. excellent) have on satisfaction and trust following a failure and recovery event. Our results showed that customers who received WOM recommendations from personal rather than impersonal sources (WOM source) were less dissatisfied with the organization when severe versus mild failures occurred. Likewise, failure severity had less negative impact on customer satisfaction evaluations when the valence of WOM information was excellent versus average. These results were more pronounced for severe failures. In addition, WOM source and WOM valence both moderated the relationship between recovery quality and trust with the organization. Specifically, excellent recovery quality had a much greater influence on trust when WOM information was obtained from personal versus impersonal sources (WOM source). Finally, when customers received WOM information that rated the service organization as excellent (WOM valence), customers also considered recovery quality to have a greater impact on their perceptions of trustworthiness than if these recommendations were average.     

Modeling the relationship between firm and user generated content and the stages of the marketing funnel

While research has successfully linked social media to separate customer metrics, an in-depth conceptual and empirical understanding of how social media affects the stages of the marketing funnel is currently lacking. We draw on extant theories of consumer information processing and source credibility to conceptually link and contrast the relationships between firm generated content (FGC) dimensions of neutral valence, positive valence and vividness, user generated content (UGC) dimensions of volume and valence and the marketing funnel stages of awareness, consideration, purchase intent and satisfaction. Using daily aggregate brand-level data for 19 brands across seven industries, our analysis shows that UGC dimensions have a stronger relationship with awareness and satisfaction while FGC dimensions are more effective for consideration and purchase intent. Specifically, we observe that FGC vividness has the strongest relationship with consideration and purchase intent, while UGC valence dominates UGC volume for these stages. Our results also show that brands with higher corporate reputation have stronger relationships between dimensions of FGC and the marketing funnel stages. Findings by consumption category show that UGC and FGC dimensions have larger positive relationships with awareness for durables and non-durables, and with consideration, purchase intent, and satisfaction for services. Thus, overall, our study offers critical managerial insights into social media marketing regarding how to leverage both FGC and UGC in managing the marketing funnel and brand reputation.     

Does educating customers create positive word of mouth?

This research theorizes and empirically examines whether and how educating customers—a brand's efforts to enhance customers' product-related knowledge—affects customer word of mouth (WOM). In two lab experiments across service and retailing contexts, we find that educating customers enhances customers' positive WOM for a brand. Customer satisfaction and perceived expertise mediate this effect. Critically, the positive impact on WOM is stronger for customers who have less prior knowledge regarding the educational topic and are more amenable to knowledge sharing. The current findings add to the literature on customer education and WOM and offer managerial insights for improving brands' WOM campaigns.     

Cross-buying evaluations in the retail banking industry

Is a customer’s past purchase experience of traditional banking products applicable to the continuing purchase of insurance and investment products at a bank branch? Are service attributes used with similar extensions evaluated differently from when used with dissimilar extensions? In response to these questions, this study develops and examines a framework of service attributes (e.g., locational and one-stop shopping convenience, functional and technical service quality, and firm reputation and size) having positive effects on cross-buying. Meanwhile, this study also examines the mediating roles of satisfaction and trust on the relationship between services attributes and cross-buying. Our results indicate that the relative importance of locational convenience and functional service quality is likely to decline, while the relative importance of one-stop shopping convenience and firm size is likely to increase as category dissimilarity increases. Technical service quality and firm reputation only have indirect effects on cross-buying dissimilar product categories through trust. Instead, satisfaction plays the mediating role for cross-buying similar product categories. Our findings reinforce the view that the relative effects of service attributes, satisfaction and trust on cross-buying vary under different category similarity conditions.     

Conceptualising consumers’ word-of-mouth behaviour intention: evidence from a university education services in Malaysia

The aim of this study is to propose a theoretical model to examine consumer word-of-mouth (WOM) behavioural intention in Malaysian education services. The results from a survey of 247 respondents indicate that servicescape, service recovery, service quality and satisfaction significantly affect consumers’ intention to engage in WOM behaviour. The results support majority of the hypothesized relationships, suggesting that servicescape and service recovery function as antecedents, directly affecting consumer perceptions of education service quality. The analytical results also demonstrate that perceived service quality positively affects satisfaction, which subsequently induces consumers’ behavioural intentions. Consistent with previous empirical studies, our findings suggest that satisfaction is a super-ordinate construct with a positive relation to behavioural intention, and significantly mediates the effect of service quality on the intention to engage in WOM behaviour. The insignificant direct effect from service quality to WOM further suggests the role of satisfaction as a complete mediator in the university education service setting. Implications for future research are discussed and limitations noted.     

“Towards a co-creation framework in the retail banking services industry: Do demographics influence?”

Although many firms profess to adopt a customer-centric approach many are yet to embrace the notion that value is not solely created within the boundaries of the firm, that it is created co-jointly with outside parties. As such, value co-creation has increasing importance in modern marketing, impulsed by Service-Dominant Logic. While co-creation is a hot-topic in the marketing literature, services marketing literature recognizes the impact of demographic characteristics in consumer behavior. However, literature analysing the effects of demographics in co-creations models is very scarce.Therefore, the aim of this paper is to examine a set of outcomes of co-creation (satisfaction, loyalty and WOM) from a customer perspective. More, this research also analyses the potential moderating effect of demographic characteristics such as gender and age in this co-creative framework.The results show that co-creation directly affects customer satisfaction, customer loyalty and WOM. Co-creation also results in increased levels of customer satisfaction, which in turn mediates the effect of co-creation on customer loyalty and positive WOM. Data also reveal different patterns of behavior depending on gender and age.This paper contributes to the understanding of co-creation from a customer viewpoint. Firms should strive to foster co-creation initiatives as this can lead to increased levels of customer satisfaction, more loyal customers and the possibility of attracting new customers through positive WOM by current customers. Customers databases must be segmented for higher levels of marketing campaigns efficiency.     

Electronic Logistics Service Quality (e‐LSQ): Its Impact on the Customer’s Purchase Satisfaction and Retention

The Internet retailing industry continues to grow rapidly. Several Internet retailers are, however, struggling to retain customers due to the high level of competition among incumbents. We propose that customer satisfaction with the order fulfillment process is an important determinant of overall customer satisfaction with the retailer, as well as with the extent of customer retention enjoyed by the retailer. This paper offers a new concept for electronic logistics service quality and investigates the relationship between the quality of online fulfillment and the ensuing retention of customers, using archival data on 260 online retailers. The structural equation model results indicate that satisfaction with the physical distribution quality and cost are positively related with customer’s purchase satisfaction and customer retention. Additionally, the results indicate that while purchase satisfaction is a strong indicator of customer retention, underlying drivers of purchase satisfaction do not have nearly the same impact on customer retention directly as they have on purchase satisfaction.     

Research on satisfaction recovery from service failure due to attitude defect and unfair price: A dynamic and longitudinal evaluation model based on customer win-back management

Customer win-back is a cognitive process of satisfaction changing from a low level to a high level with service recovery strategies as the stimulus. Because prior research tends to view service recovery strategies as a static antecedent, it is difficult to analyze and observe how the recovery strategies affect satisfaction and repurchase intention dynamically. Moreover, not enough attention has been directed to the relationship between reasons of customer loss and recovery strategies. This research conducted a field experiment involving a 2 × 2 between-subjects design (defects of service attitude and unfair price × tangible recovery and intangible recovery strategies). From a longitudinal and dynamic perspective, this study has produced the following key results: First, there are significant differences in satisfaction and purchase intention between the four groups categorized by specific reasons of customer loss. Second, recovery strategies may have non-linear effects on customer’s satisfaction. Lastly, based on the prospect theory and disappointment theory, we discuss important managerial implications of the function curves fitted between customer satisfactory (before customer loss and after implementation of customer winback strategy) and purchase intention.     

It pays to pay attention: How firm's and competitor's marketing levers affect investor attention and firm value

Investors' attention to a firm's stock has been demonstrated to influence stock returns (Da et al., 2011). But does a firm's marketing information draw attention to a firm's stock? Research in finance, accounting, and marketing has investigated advertising as one potential driver of investors' attention to a firm's stock. How about other potential marketing drivers? The authors develop hypotheses related to the impact of the changes in four marketing levers: advertising, product development announcements, WOM, and customer satisfaction on the change in investor attention to a firm's stock. Furthermore, they investigate the moderating role of competitors' marketing levers in these relationships.To test the hypotheses, they compile a panel dataset with 349 firms covering the 2007–2017 period. The results suggest that the changes in the focal firm's advertising and WOM have a positive and significant impact on the changes in investor attention to the focal firm’s stock. Furthermore, these effects are amplified when there is an increase in competitors' advertising spending and WOM, respectively. For the customer satisfaction lever, the results suggest that the change in competitors' customer satisfaction enhances the impact of the change in focal firm's customer satisfaction on investor attention. Collectively, the results suggest that investors attend to the firm's and its competitors' marketing information in a much more nuanced manner than previously thought.     

Please smile,the CCTV is running!

This paper examines the use of closed-circuit television (CCTV) system notices in banks. This study was designed to measure the effect of the wording of CCTV notices on customer service quality expectations and purchase intent, while also considering the customer involvement as the moderating effects. Results show that customers, in expectation of better service quality, may be more likely to purchase the service when moderately worded CCTV notices (i.e. ‘please smile, the CCTV is running!’) had been employed in the bank rather than when the negatively worded CCTV notices (i.e. ‘Taping now! All your behaviour here is monitored by the CCTV system!’) are deployed. These effects were stronger in low-involvement situations. Implications of the findings and the future research directions are also discussed.     

基于酒店业的服务公平性构因模型实证分析

人类很早就认识到公平的重要性,服务公平性将会直接影响到顾客的满意感与行为意向。然而在现实生活中,顾客在评估服务公平性时,既评估消费结果公平性,也评估服务过程公平性以及他们与服务人员交往的公平性。本文研究以酒店业为例,使用验证性因子和回归模型分析方法对服务公平性的二阶构成因子——结果公平性、程序公平性和交往公平性进行了验证分析,实证结果表明这三类公平性是高度相关的不同概念,其对于顾客对总体服务公平性感知的影响是不尽相同的。     

Effects of quality and corporate social responsibility on loyalty

The purpose is to investigate the impact of corporate social responsibility perceptions on three aspects of customer loyalty for a new bank service (Travel Card) relative to a recognised major predictor in service quality. Surveys were completed by 204 bank consumers in Australia. Using a series of regression equations, two sets of socially responsible perceptions had significant effects on purchase intention and positive word of mouth. In both cases, new socially responsible information was twice as strong a predictor as service quality. However, for affective commitment, service quality was the dominant predictor. Furthermore, existing perceptions of socially responsible performance had a negative effect on purchase intentions. The study presents the first evidence that new socially responsible perceptions for a service firm can be a more powerful predictor than corporate abilities. The findings further illustrate the differential impacts of socially responsible information on different loyalty conceptualisations.     

Memorable customer experiences and autobiographical memories: From service experience to word of mouth

The aim of this paper is to study the relationship between customer experience and word of mouth (WOM) through two mediating variables: customer satisfaction and memorable characteristics of service experience (MCSE). Memory theory is adopted as a theoretical background, with emphasis on the key role of episodic or autobiographical memory. Memorable customer experience (MCE) is defined from this perspective, thereby enabling the connection between human memory theory and service-dominant (S-D) logic. As for the impact of the internet on WOM, two types of WOM behaviours are examined: positive WOM (pWOM) and eWOM. A methodology was designed from a survey that used a questionnaire based on measurement scales validated by the literature. The sample is of 1476 tourists who visited seven Spanish tourism destinations. The results show service experience precedes customer satisfaction and MCSE. Both pWOM and eWOM are significantly influenced by customer satisfaction and MCSE. Various scenarios are put forward in which several combinations of customer satisfaction and MCSE give rise to different intensities and valence of pWOM and eWOM.     

Merely asking the customer to recommend has an impact on word-of-mouth activity

This paper examines if a mere request to a customer – within the frame of a service encounter – to engage in word-of-mouth (WOM) would have an impact on the customer's subsequent WOM activity. Although previous studies have not examined this issue, theoretical arguments do exist. And they point in different directions; some suggest a positive impact, while others suggest a negative impact. To explore the issue empirically, we carried out two studies (one survey-based study and one experiment). Both generated the same result: they indicate that merely asking customers to engage in WOM has a positive impact on customers' WOM activity. In addition, we found that receiving the request was not negatively associated with the customers' overall evaluations, such as customer satisfaction, which indicates that the potential for negative consequences of making the request seems to be low.