An Exploration of Frequent Service Failures in the Brazilian Airline Industry

This study explores how customer evaluations of service failures and failure recurrence impact negative emotions and intent to complain. A survey of 589 Brazilian airline passengers demonstrates the meditational effect of negative emotions such that customers who perceive failures as severe and/or preventable by the airline develop more negative emotions, which subsequently increases intent to complain. We also demonstrate the moderating role of failure recurrence such that failure recurrence reduces the effect of failure severity on negative emotions. Our findings have important implications for managers and airlines in order to mitigate negative outcomes following a service failure.     

Switching behavior of U.S. mobile phone service customers after providers shift from contract to no contract mobile phone service plans

The study examines the impact of the recent shift of the mobile phone service providers in the U.S., from contract to no contract mobile phone service offerings, on the switching behavior of customers in different age groups. Consistent with previous research, the findings ascertain that switching barriers related to relational benefits, availability and attractiveness of alternatives, service recovery and retention in the mobile phone industry are perceived differently by customers in different age groups. However, counter to previous research in the retail banking industry, the research finds that younger customers in the mobile phone service industry are more likely to perceive relational benefits, the effort providers exert to recover a service and are less likely to switch to other providers than older customers. The research findings have implications to theory and practice.     

When do customers offer firms a “second chance” following a double deviation? The impact of inferred firm motives on customer revenge and reconciliation

The present research develops and tests a theory explaining how customers respond to failed service recoveries (i.e., double deviations). This work offers three novel and important conclusions. First, inferences about a firm's motive (negative vs. positive) mediate the impact of perceptions of the double deviation (i.e., severity, blame, and fairness) on resulting outcomes (i.e., customer anger, desire for revenge, and desire for reconciliation). Second, when inferred motive is positive, desire for reconciliation overwhelms desire for revenge, leading customers to choose more reparatory than retaliatory behaviors. Third, following a double deviation, firms that both compensate and apologize to customers can change customers’ inferred motives from negative to positive, leading customers to desire more reconciliation than revenge, and engage in more reparatory than retaliatory behaviors. These studies demonstrate that, contrary to common wisdom, customers do not always respond negatively to a double deviation, and firms still have a “second chance” following a failed recovery.     

Closeness,strength, and satisfaction: Examining the nature of relationships between providers of financial services and their retail customers

This article presents the results of the analysis of data collected in a telephone survey of retail customers of banks and other financial institutions. The objective of the research is to identify various dimensions of the customers' relationships with their principal financial institution and to ascertain the factors that contribute to the types of close relationships that are likely to lead to customer retention, referrals, and long-term profitability. A survey of 400 adult retail bank customers provided data for analysis. The results indicate that the factors that contribute most to the establishment of close, satisfying customer relationships are affective variables, rather than situational or behavioral variables. The results also point to the existence of quite different segments of the retail bank market as defined by the type of relationship the customer wishes to have with his or her main bank. © 1997 John Wiley & Sons, Inc.. Inc.     

Happiness as a predictor of service quality and commitment for utilitarian and hedonic services

In services research, little attention has been devoted to long‐term intrinsic personality traits. Long‐term personality traits predict short‐term affective states and thus understanding them is important from a service standpoint. Further, identifying long‐term personality traits facilitates the targeting of customers who are predisposed to evaluate services in a positive manner. This study focuses on one long‐term affective trait, happiness, and examines its impact on service evaluation and commitment, as it has been shown that the level of happiness affects whether people perceive life events, both great and small, in a positive or negative manner. Three studies were conducted to research the issue. The first study shows that customers who are happier evaluate service quality in utilitarian services in a more positive manner than do customers who are less happy. The second study shows that for hedonic services, involvement serves as an antecedent to perceived service quality; happier customers are also more involved in hedonic services, and thus perceive service quality in a more positive manner. Study 3 examines the link between happiness and commitment and shows that customers who are happier are also more prone to be committed to hedonic services. These results contribute to the marketing literature by showing that customers are predisposed to evaluate service quality in line with their level of happiness in the case of both utilitarian and hedonic services. Thus, marketing scholars and practitioners ought to recognize that service quality and commitment are partially predetermined by the personality of the customer and that some customers are more difficult to please than others. © 2011 Wiley Periodicals, Inc.     

Customer perceptions of frontline employee service delivery: A study of Russian bank customer satisfaction and behavioural intentions

This study examines the nature of relationships between customer perceptions of frontline employee service delivery (core and relational), satisfaction and selected behavioural intentions by using customers of a commercial retail bank in Russia as its setting. Contrary to findings from North American-Western research, the study findings show that relational service delivery only significantly impacts customer satisfaction for Russian males whereas core service delivery only impacts this affective outcome for Russian female customers. Implications of the results are discussed and future research avenues are offered.     

Are Variety-Seekers Bad Customers?

SUMMARY

Variety-seeking behavior occurs if customers derive utility from a change of service providers. It has negative consequences for the firm's profits, because it functions as a moderating factor in the relationship of customer satisfaction and customer loyalty. Even by offering high service quality variety-seekers cannot be retained. Therefore variety-seekers are often seen as “bad” customers, because they are not loyal to the firm. This article will show variety-seeking behavior in a more positive light. Variety-seekers are satisfied customers and therefore they are likely to engage in positive word-of-mouth communication. Recommendations will help to attract new customers and thus increase profits.     

To err is human: Tolerate humans instead of machines in service failure

Full automation and self-service technologies have become popular in service marketing. However, customers often face multiple issues when dealing with self-service technologies. This paper examines the effect of service-failure type (employee failure vs. self-service technology failure) on customers' negative responses (dissatisfaction, forgiveness, willingness to switch between employee and self-service technology, and negative word of mouth). Through four experiments with Amazon Mechanical Turk workers and undergraduate students, this research finds that customers have more negative responses for a self-service technology failure than for an employee failure. This is because they get angrier with machines' mistakes than with those of humans. Moreover, empathy alleviates anger and customers’ negative responses in employee failure, but not in self-service technology failure. This research offers service providers new insights by scrutinizing the flip side of complete automation in service marketing.     

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.     

Spillover Effects of Service Failures in Coalition Loyalty Programs: The Buffering Effect of Special Treatment Benefits

Coalition loyalty programs are on the rise, yet few studies investigate the impact of service failures in such programs. Using data from a retail context, the authors show that a program partner deemed responsible for a service failure suffers negative customer responses. However, customers’ perceptions of the benefits of the coalition loyalty program buffer these consequences. Perhaps most importantly, when customers perceive the program's special treatment benefits as low, direct and indirect spillover effects occur, such that a service failure by one program partner has a negative effect on customer loyalty toward the program itself.     

Breathing Down Your Neck!: The Impact of Queues on Customers Using a Retail Service

While a rich body of research has examined the psychological costs and benefits of queuing, this research focuses on the customer currently using a retail service and examines how this customer is affected by lines forming at his or her back. Drawing on Social Impact Theory, we postulate that customers feel pressured by people waiting behind them and that this feeling of social pressure leads to more negative affective experiences, poorer participation in co-creation settings, and lower perceptions of service quality. Five field and controlled experimental studies tested these predictions and also explored how retailers can reduce the adverse impact of queues. Studies 1A and 1B show that the customer’s experience deteriorates as queue length increases and that perceptions of social pressure mediate this effect. Studies 2A and 2B show that this effect is moderated by customers’ own waiting time such that customers are more affected by queues forming at their backs when their own waiting time decreases. Finally, study 3 identifies two strategies to attenuate the negative effects of waiting lines, namely explicitly reassuring the focal customer that she need not feel pressured to be efficient and removing the waiting customers from the line of vision of the focal customer.     

Linking trust to use intention for technology‐enabled bank channels: The role of trusting intentions

The present research is an attempt to better understand the role of trust in the adoption of technology‐based service channels, namely Internet and phone banking. The study conceptualizes and measures trust, distinguishing the cognitive and affective component of trust (the trusting beliefs), the behavioral component of trust (trusting intentions), and the purchase behavior (intention to use), suggesting a mediating role of trusting intentions. Then it tests a model that combines the effect of trusting beliefs and trusting intentions together with the Technology Acceptance Model variables, privacy, and security as well as individual characteristics. Results from 762 retail bank customers revealed a strong mediating role of trusting intention on the intention to use and similar patterns of relationship for the two technology‐based bank channels. Several implications for managers and further research are discussed. © 2010 Wiley Periodicals, Inc.     

Fashion involvement and experiential value: Gen Y retail apparel patronage

Despite Generation Y (Gen Y) consumers' significant role as a decision maker in the market, it is increasingly challenging for retailers to understand these consumers’ behavior and psychology. To enhance an in-depth understanding of Gen Y consumers, this study examined the effect of fashion involvement (FI) and perceived experiential value (EV) on Gen Y consumers’ retail apparel patronage behavior. Based on a survey method, data were collected from USA and Taiwan Gen Y samples. The structural equation modelling technique was used to analyze 413 useable surveys. Results indicate EV directly influences retail patronage, while FI indirectly affects retail patronage through EV. Analysis further reveals two dimensions of FI; cognitive involvement and affective involvement. Cognitive involvement has a moderate direct, negative effect on escapism value, and weak, negative effect on utilitarian value, while affective involvement has a moderate direct, positive effect on aesthetic value and weak, positive effect on escapism value. This study theoretically contributes to understanding how consumer involvement affects perceived experiential shopping value. Findings also provide strategic ideas for apparel retailers in creating shopping environments that resonate with Gen Y customers, which ultimately leads these customers to be loyal to their brands and stores.     

Determinants of retail bank choice in Nigeria: a focus on gender-based choice decisions

As the Nigerian retail banks customers become more sophisticated, it is now very important that retail banks determine the factors that are important and relevant to the customers’ retail bank choice decisions. By using a survey of retail bank customers, this study evaluates the relative importance attached to retail banks’ choice criteria used by male and female customers in Nigeria. The results show that there are some differences in choice factors used by male and female customers in selecting a retail bank for patronage. The recommendation is that bank managers should take both female and male market segments into consideration when making retail bank strategic planning in order to become competitive. The findings can assist retail bank managers in refining their marketing strategies as a means of overcoming the intense competition that exists in the Nigerian banking system.     

The relative impact of advertising and referral reward programs on the post-consumption evaluations in the context of service failure

This study investigates the differences in the post-consumption evaluations of customers acquired through advertising and RRPs in the context of service failure. The three laboratory experiments demonstrated that when a service failure happens, customers acquired through RRPs will have more positive post-consumption evaluations than those acquired through advertising. This effect is mediated by customers’ attribution the failure as a one-time event. In addition, this study revealed that the buffering effect of RRPs relative to advertising only exists when the tie strength between the referrer and the referred is strong or the failure severity is low. This research not only extends the literature on the service failure and the comparative effects of different marketing methods, but also provides feasible suggestions for the enterprises to design marketing activities and do more effective failure recovery.     

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.     

Cognitive and affective constituents of the consumption experience in retail service settings: effects on store loyalty

Based largely on the recently growing experiential marketing stream, this study explores the joint effects of cognitive assessments of and emotional responses to service experiences on store loyalty in a retail service setting. Experience-related cognitions and store-related cognitions based on evaluations of the service experience, as well as the subsequent positive and negative emotional responses on the part of the customers, are modeled and investigated in terms of effects on store loyalty. Empirical data were collected through a survey of 518 consumers in four coffee shops of two major chains. The results suggest that consumer evaluations of the service experience and store environment may influence store loyalty, both directly and indirectly, through both negative and positive emotional arousals. The relative effects of each construct through different mechanisms are the primary research questions investigated in this study. Managerial implications and future research directions are also discussed.     

The service quality–loyalty relationship in retail services: does commitment matter?

The marketing literature has produced two schools of thought on the cause of customer loyalty in services industries. The service quality perspective puts forward that service quality evaluations substantially drive customer loyalty in services industries. The relationship marketing perspective puts forward that customer commitment to the service provider substantially drives customer loyalty in services industries. In addition, commitment is a complex construct with at least two forms, one based in liking and identification (affective commitment) and one based in dependence and switching costs (continuance commitment). These positions were examined in an integrated model of retail–service relationships. It was found that affective commitment and continuance commitment were mainly partial mediators of the service quality–loyalty relationship. It was also found that affective commitment to the retailer had a positive impact on customer loyalty while continuance commitment in marketing relationship had a deleterious effect on customer loyalty.     

Exploring the application of IVR: lessons from retail banking

In today's increasingly competitive retail banking environment, banks are faced with the challenge of building and maintaining relationships with profitable customers while at the same time embracing technological change. So, while on the one hand increasing the role of technology in a services organisation can serve to reduce costs and often improve service reliability; on the other hand, organisations are acutely aware of the important role for personalised relationships in the delivery of their service proposition. This article reports on a qualitative research study into the perceptions of customers and staff of a large retail bank regarding the piloting of an interactive voice recognition (IVR) system. This system is regarded as a way for the case bank to benefit from technological advances, while still retaining its relationships with more profitable customers. To this end, the system was hoped to encourage lower net worth customers to increase their use of the bank's telephone banking facility, and allow branch staff, who would be freed from dealing with routine telephone enquiries, to deliver a better personalised service to high net worth customers. However, despite this rationale, the article reports the paradoxical situation that the system has been effectively rejected by customers and staff alike. The key objection is that relating to the perceived service discrimination between high and low net worth customers, the very rationale for which the IVR was introduced.     

The development of service quality dimensions for internet service providers: Retaining customers of different usage patterns

This study examines the relationships among relevant service quality dimensions of Internet service providers (ISP) and their customers’ perceived value, trust and commitment. Data was collected from residential Internet users in Thailand. The final usable sample size was 1507. The analyses include segmenting ISPs’ customers on the basis of their usage pattern and evaluating their perceptions of Internet service quality dimensions. In addition, several alternatives models were compared using structural equation modelling to confirm the mediation effects. An ISP’s service quality is influenced by the following four dimensions (a) network quality, (b) customer service and technical support, (c) information quality and (d) security and privacy. The findings reveal that while all dimensions have positive effects on trust, only network quality, information support and privacy influence customer value significantly and information support is the only dimension which is directly related to commitment. Additionally, the effects of customer service and information support on value vary across customers of different Internet usage patterns. The contribution of the present paper stems from the simultaneous modelling of a range of mediation effects which can better help explain the impact of service quality dimensions on customers’ cognitive and affective evaluations in high-tech service settings.