Customer Responses to Service Failure and Recovery Experiences

Abstract

Service firms strive to deliver high quality services to customers, yet often fail to meet customer expectations, resulting in service failures. To rectify the failure, service recovery is attempted. Effective recovery is fundamental to restoring customer confidence in the organisation and repatronage intentions. Service failure events and subsequent recovery shape customer experience with the service. Service failure and recovery can thus be seen as representing two stages of the same service experience. Customer responses at each of the two stages involve complex psychological processes. A comprehensive understanding of these psychological processes is crucial for management to be able to design effective service recovery strategies. This chapter takes an overarching view of customer responses to service failure and recovery, and critically reviews research evidence in this domain. The review draws upon research from consumer and social psychology, in an effort to explain how service failure and recovery experiences shape customer perceptions, attitudes, and behaviour. The chapter also accounts for additional factors such as customer-firm relationship and brand equity, and their influence on customer responses to service failure and recovery experiences. To conclude, a number of avenues for further research are identified.