The effect of service failure types and service recovery on customer satisfaction: a mental accounting perspective

Service failure recoveries play an important role in the service process. Previous research on service recovery has focused on the development of classification schemes, such as service failure types (e.g. outcome- or process-related failure), service recovery attributes (e.g. psychological or tangible recovery), and failure magnitude. Few studies in the literature have developed a theory-driven model of customer satisfaction that considers whether different types of service failure warrant different types of service recovery. This article, which reports the results of two studies, draws on mental accounting theory to examine the effect of the relationship between service failure and service recovery on customer satisfaction. The results of Study 1 show that customer satisfaction is greater when service recovery efforts truly make up for what customers have lost and that prior experience of service failure has a significant influence on the effectiveness of those efforts. The results of Study 2 indicate that the magnitude of a service failure also has an impact on the effectiveness of service recovery efforts.     

Measuring service experience: Applying the satisfaction with travel scale in public transport

It is argued that favorable customer service experiences are crucial for the success of a company's offering, and research on the subject is growing rapidly. However, instruments for measuring service experience are not readily available. This study applies and validates the Satisfaction with Travel Scale (STS) for measuring the service experience in public transport. The results confirm that service experience is multidimensional, consisting of a cognitive dimension related to service quality and two affective dimensions related to positive activation, such as enthusiasm or boredom, and positive deactivation, such as relaxation or stress.     

Goal interdependence and quality in services marketing

Service quality is considered an important competitive edge because it generates repeat sales, positive word of mouth, customer loyalty, and competitive product differentiation. This study examines the impact of a company's cooperative or competitive orientation and the service provider's warm or cold communication style on customer evaluation of service quality. Results from 83 participants in a simulated bank interview experiment indicate that when the bank communicated a cooperative orientation they perceived it as offering a higher-quality service than when it had competitive or individualistic goals. The warmth of the service personnel contributed to high-quality service, liking the bank representative, future confidence in dealing with the bank, satisfaction with the interview, and willingness to be interviewed by the bank representative in the future. These results were interpreted as suggesting that companies who can demonstrate a strong cooperative orientation toward customers and whose service providers demonstrate warmth will be considered to offer high-quality services. © 1995 John Wiley & Sons, Inc.     

Service with a smile: Does the type of smile matter?

Service providers have often used the mantra of “service with a smile” as a strategy to engender customer satisfaction. The findings of the current research indicate that a smile alone may not be sufficient in achieving service excellence. Specifically, this work extends prior research suggesting that customers have more positive reactions to Duchenne, or authentic, smiles compared to non-Duchenne, or non-genuine, smiles. Two experimental vignette studies examined the influence of the type of smile a service provider displays (Duchenne vs. non-Duchenne) and gender of the service provider on perceptions of service quality, as well as the Stereotype Content Model dimensions of competence and warmth. The results suggest that the type of smile (Duchenne vs. non-Duchenne) impacts evaluations of service providers in terms of their perceived level of competence, as well as their perceived service quality ratings. Implications for the hiring and training of service providers are also discussed.     

Growing the service brand

Service brands are increasingly dominating the economy. However, there is limited knowledge about how to grow service brands, and whether growing service brands will require strategies different from the strategies that are based on goods brand research. To address this knowledge gap, this paper conceptualizes a “ServBrand triad” based on the service literature, and empirically demonstrates how its three drivers are related to service brand growth. Service brand growth is defined as positive changes in brand outcomes, such as the brand being liked more, used more, or more profitable or valuable to a firm. The empirical work utilizes 11 years of longitudinal brand and firm data that are analyzed by dynamic multivariate generalized method of moments (GMM) panel models. The findings confirm the importance of the three drivers of service brand growth: quality, personalization, and relationships. Service marketers are advised to emphasize relationship-based service personalization (as opposed to quality-based personalization), maintain consistent service quality “at” customer expectation, neither above nor below, throughout the relationship, and improve service quality gradually (or subtly) to avoid quality-cost tradeoff and quality inconsistency perceptions. These findings contribute to an improved understanding of the factors that drive service brand growth, and how those factors differ from the factors that drive goods brand growth.     

Is There Any Change in the Public Service Values of Different Generations of Public Administrators? The Case of Turkish Governors and District Governors

In recent public administration literature, much attention is paid to changes in public service values, including ethical values, that guide public service. This paper reports on the results of an empirical survey conducted among a group of Turkish governors and district governors (including those in service and retired) who are from different generations. By focusing on the transformation of value preferences of Turkish governors and district governors, this study tries to identify variations in values, particularly about public service ethics, in accordance with the age and the length of tenure in public service. The findings of the research show a traditional and more or less consistent value pattern for Turkish governors and district governors. The most important public service values expressed by the respondents are consistent with often-mentioned crucial public service values in the literature. New or emerging values have not been present enough among the most important public service values. In brief, the results do not lend support to the often-assumed hypothesis that traditional public service values are devaluated or degraded by the emergence of businesslike values. In other words, new emerging values could not sneak into the public service culture in any convincing manner in spite of many years of NPM rhetoric and recipes.     

Strategies towards innovative services: findings from the German service landscape

The specifics of services seem to prohibit a simple transfer of innovation strategies from the manufacturing to the service sector. To better understand what works, successful strategic service innovators and their strategic approaches have been the focus of this study. To do so, 80 service innovators in Germany have been monitored over a period of one year. By analyzing them, according to the basic strategies they follow (low cost, differentiation or mixed emphasis) and the dominant design of their service delivery system (information technology-based, people-based or mixed approach), this paper provides an understanding of the strategic approaches followed by successful service innovators. Our findings propose that there is a fit between the complexity of service offerings and variety of the interaction approaches by successful service innovators. In sum, we argue that for an appropriate design of service innovation strategy both managers and researchers need to go beyond the traditional distinction of low cost and differentiation strategy.     

The behavioural sequence of the financial services industry in Taiwan: Service quality,relationship quality and behavioural loyalty

This study develops and empirically tests a model for examination of the relations among service quality scales, relationship bonding tactics, customer satisfaction, trust and commitment, and customer behavioural loyalty in a relationship marketing system. This paper aims to test the relationship between perceived service quality satisfaction and relationship intentions, or, in other words, whether or not consumers will consider building long-term relationships with service providers on the basis of a single instance of perceived service quality. Based on three groups of samples from XYZ bank, one of the most famous banks providing merchant banking services in Taiwan, the findings suggest that financial products with different product attributes need different kinds and levels of service and relationship investment. The findings also suggest that there does exist a positive relationship between service quality satisfaction and perceived relationship investment.     

A Cornell Quarterly classic article: New tools for achieving service quality

Applying manufacturing-type process control to service operations allows employees and managers to measure and analyze the effectiveness of service processes. Although manufacturing techniques have allowed some service companies to operate with inflexible consistency, the use of certain techniques can actually foster more customization in service. Rather than apply quality control at the end of the process, managers can apply the techniques of statistical process control during the production of services. By involving employees in measurement and analysis of the impediments to service excellence, the organization can focus on creating a service process that meets or exceeds customers' needs. Techniques of statistical process control include flow charts of service processes, setting service standards, and fishbone (or cause-and-effect) analysis.     

Is similarity a constraint for service-to-service brand extensions?

Are service brands constrained in launching new service offerings? Both research evidence and managerial wisdom suggest brands should extend to similar categories. However, in five studies using real-life brands - four experiments and one large-sample survey - we provide evidence that similarity is less of a constraint for service brands extending to other service categories (service-to-service extensions), compared to cases involving parent brands or extension categories of a product nature. Importantly, we demonstrate that such an effect occurs because service brands possess associations relevant across the spectrum of service categories. Our results suggest that service brand managers have the opportunity to stretch their brands to dissimilar service offerings; yet, they need to ensure the marketing execution does not make the brands’ service associations inaccessible to consumers. The findings suggest that even product brands can build service associations by adding service components to their offering, thus becoming “servitized” and better able to extend to dissimilar service categories. Overall, our work contributes to the academic debate documenting that the principles governing the management of product vs. service brands are not identical.     

Same Service,Different Ad Claims: The Moderating Role of Need for Cognition

Advertisers can choose among different ad claims when framing commercial messages about a new service offer. Two alternative ad claims are functional ad claims, focusing on product or service attributes and benefits, and experiential ad claims, focusing on future experiences with the product or service. This article proposes that different ad claims evoke different memory structures (semantic vs. episodic), and that different memory structures require different types of cognitive processing (system 1 vs. system 2). In two experiments using need for cognition as a dispositional trait of level of cognitive processing, this article shows that a new service entrant with experiential ad claims will be less favorably evaluated when consumers engage in more effortful, or system 2, processing, than when consumers engage in less effortful processing (system 1). For functional claims, however, the evaluation of the new service does not differ between the two types of cognitive processing (system 1 vs. system 2).     

Individual Differences Among Service Employees

SUMMARY

To do an excellent job of managing external relationships, service firms must be prepared to do an excellent job of managing internal relationships. This effort begins with recruiting, selecting, and retaining employees who are likely to serve customers well. While service firms strive to match the knowledge, ability, and skills of potential employees to the requirements of the job, most do not have the time or the resources to implement elaborate recruitment and selection systems. This is especially true among services where relatively high turnover levels mandate that recruitment and selection processes be fast and inexpensive. To meet this challenge, managers often focus on a set of easily identifiable individual characteristics, such as experience, job tenure, age, or education that can be assessed during the time of an interview or scan of a job application. This study examines the effect of these characteristics on the attitudes and responses of service employees that are critical for the effective delivery of quality service (job satisfaction, self-efficacy, role stress, organizational commitment). The results indicate that satisfied and committed service employees tend to be older, better educated, and possess a great deal of service experience. These employees also appear to be better able to handle the stress associated with service positions. These characteristics are atypical of the service industry, where employees tend to be younger, possess relatively little experience in any one industry, and are less educated. Implications for managing the recruitment, selection, and retention of service employees are offered, as are directions for future research.     

Value and Satisfaction Evaluations During a Service Relationship

Abstract

The research used a sample of credit union customers to determine (a) the relative importance of core and peripheral service attributes on customer evaluations of service value and customer satisfaction, and (b) how the relative importance of these criteria change over the life of the service relationship. For the overall sample, peripheral service attributes accounted for over three-fourths of the variance for service value and customer satisfaction. Dividing the sample into three sub-samples based on age of the customer's relationship with the credit union, peripheral service attributes drove evaluations of service value and customer satisfaction for the first stage of the relationship (ten years or less) and the middle stage of the relationship (eleven to nineteen years). Once the relationship aged to twenty or more years, core attributes drove evaluations of service value and customer satisfaction. Findings indicate that relationship strategies for the credit union may need to be customized based on the amount of time customers have had a relationship with a service firm.     

Consumer responses to service situations: Tests for main and interaction effects

This research examines the effects of service criticality, service type, previous service experience, and service recovery on customer satisfaction, customer loyalty, and complaint behavior. The results of a 2 (service criticality: high or low) x2 (service type: personal or nonpersonal) x 2 (previous service experience: failure or nonfailure) x3 (service recovery: assistance only, compensation only, or assistance with compensation) between-subjects experimental design indicate significant main effects for each independent variable on the combined dependent measures. In addition, two-way interaction effects, each involving service type, were found. Managerial implications and future research directions are discussed.     

Recovering service failure through resource integration

Customers and employees can co-create a resolution following a service failure through integrating their resources. Their activities and interactions during resource-integration shape the customers' service recovery experiences. Prior research overlooks resource integration between all involved actors in a co-created service recovery process. This research details the process with two empirical studies. Study 1 is a qualitative analysis of narratives of service recovery experiences; Study 2 is a quantitative assessment of scenario-based survey data. The results show that a favourable service recovery experience is resulted from integrating all involved actors' resources in a mutually beneficial manner. Three key resources are financial compensation, service skills including communication and timing. Our findings indicate that co-created service recovery fails in the absence of just one resource or mismatches in their integration. The combined studies reveal that customers use their justice perceptions to assess activities and interactions for resource integration in service recovery.     

The WOW factor: Creating value through win-back offers to reacquire lost customers

Customer reacquisition provides firms with high financial and service improvement benefits. The implications of this research are meant to stimulate a new research stream towards a theory of customer reacquisition management as well as to provide service firms with a framework to regain defected customers. Through two studies, we develop an empirical model that identifies the factors driving win-back offer effectiveness. The findings indicate that, in order for win-back offers to be effective, service providers must consider a customer's reasons for leaving and their relationships with the current service provider. Value determinants (price and service benefits provided in the win-back offer), social capital and service importance play a prominent role in shaping customer switch-back intentions regardless of the level of previous satisfaction, regret, or delight with the new service provider.     

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.     

Partnerships in the provision of services by multi-agencies: four dimensions of service leadership and service quality

This paper explores the relationship between four key dimensions of service provision through adopting different partnership approaches. These dimensions are identified to describe partnerships as mandatory or voluntary and service provision based on contract or trust. Propositions about the nature and interaction of these variables are presented and combined as a heuristic suggesting complying, constraining and creating modes of partnership-working and service delivery. Examples are provided of these modes in practice. The paper concludes that this heuristic is a useful tool for practitioners to locate their form of partnership-based service delivery within the spectrum identified.