The Impact of Service Operations Failures on Customer Satisfaction: Evidence on How Failures and Their Source Affect What Matters to Customers

Abstract

Key service elements combine to create the service concept and its value proposition for customers. During service operations failures, employee interactions with customers are a critical service element in restoring customer satisfaction. However, research in consumer psychology shows that customers seek reasons for service failures and their attributions of blame moderate the effects of the failure on the level of customer satisfaction. This paper extends research on services operations failures by hypothesizing that attributions of blame also affect what matters to the customer during service failures. Specifically, we hypothesize that the relative weights that customers assign to the key elements of the service in reaching an overall assessment of customer satisfaction are affected by customer attributions of blame for service failures. We use the U.S. airline industry as a quasi-experimental research setting to investigate the components of customer satisfaction for three samples of customers who experience: 1) routine service, 2) flight delays of external (i.e., weather) origin, and 3) flight delays of internal origin. Although the level of customer satisfaction is lower for all service failures, we find that the key components of satisfaction differ between delayed and routine flights only when customers blame the service provider for the failure. Specifically, when delays are of external original, satisfaction is lower than for routine flights, but there is virtually no difference in the weight that customers assign to the components of customer satisfaction (including employee interactions). In contrast, when delays are of internal origin, satisfaction is lower than for either routine flights or flights delayed by external factors and employee interactions have a significantly diminished role in customer satisfaction evaluations. Contrary to the popular view that employee interactions take on a greater role in determining customer satisfaction during service failures, we find that the opposite is true if the customer attributes blame to the service provider. The results highlight the important role of customer attributions during service failures and present more nuanced evidence on the role of employee-customer interactions in mitigating the effects of service failures on customer satisfaction.