Recovery strategy for group service failures

Abstract

Purpose – Consumers use cues to assess whether a recovery is effective. Prior literature on service recovery has focused mainly on individual-related factors. This paper aims to study how other consumers in the same failure and recovery influence an individual consumer to evaluate the firm ' s recovery efforts. Design/methodology/approach – Two experiments were conducted. Experiment 1 tested the interaction effects between recovery modes (public vs private) and recovery dimensions (economic vs social) on an individual consumer ' s evaluation of a recovery strategy for a group service failure. Experiment 2 investigated the complementary role of social recovery on economic compensation. Findings – Experiment 1 identified a significant interaction effect. Results suggest that an individual in a group service failure responds more favorably to public economic recovery than to private recovery. However, an individual ' s reaction to social recovery follows the opposite pattern. Furthermore, in experiment 2 a complementary effect between economic recovery and social recovery was found. Originality/value – One potential contribution is that the paper sheds light on the issue related to the influence from other affected consumers in the same service failure and recovery situation in affected consumers ' recovery evaluation. An individual will consider the recovery other individuals receive when he or she evaluates the recovery ' s strategy. The paper also provides insight into the complementary use of economic and social recoveries to enhance a consumer ' s evaluation of a firm ' s overall recovery at a reduced cost.