Service Failure Severity Research Articles

Service Failure Severity, Customer Satisfaction, and Market Share

The generally accepted view among managers and researchers is that the greater the severity of a service failure, the greater the resulting impact on customer satisfaction and business outcomes, such as lost customers and revenue. The research used to defend this viewpoint, however, does not typically address the severity of service failures, like those that result in injury or death (i.e., product-harm crises). This research addresses this issue by examining both minor incidents (i.e., failures that do not result in physical harm) and major incidents (i.e., failures that result in injury or death) in the U.S. airline industry, and the corresponding impact on the customer satisfaction and market share of the firms affected. Our results indicate that minor incidents are more strongly (negatively) related to future market share than are major incidents. Moreover, our findings indicate that only minor incidents are significantly linked to customer satisfaction. We argue that these findings occur for two reasons: First, most customers believe major incidents to be low probability events that are less salient when compared to more probable failures. Second, consumers impacted by major incidents most likely defect and are therefore not captured in future customer satisfaction surveys. Consequently, managers can delude themselves that things have “returned to normal” after a major incident when relying on customer satisfaction scores alone.

Antecedent and Outcomes of Satisfaction with Service Recovery: A Study among Mobile Phone Users in Central Region of Malaysia

Purpose: In a competitive service industry, satisfying customer is paramount for sustainability of the organization. With this understanding this current study is investigating on antecedent and outcomes of satisfaction with service recovery in the mobile phone industry with introduction of Mobile Number Portability (MNP) in Malaysia recently.Design/Methodology: Antecedent of satisfaction with service recovery is perception of justice which consists of interactional, procedural and distributive justice. Outcomes of satisfaction with recovery are behavioral outcomes which are consisting of word of mouth (WOM), customer loyalty and trust. In addition this study also added moderator (service failure severity) to understand the relationship between perception of justice and satisfaction with service recovery. Data gathered by self-administered questionnaires from 280 mobile phone users in central region of Peninsular Malaysia by using convenience sampling technique. Data was analyzed using multiple and hierarchical regression. Findings: The findings indicate perception of justice is an antecedent to satisfaction with service recovery. Service failure severity was found to have moderating effect between perception of justice and satisfaction with recovery. Findings also indicate outcomes of satisfaction with service recovery are behavioral outcomes which consist of word of mouth, customer loyalty and trust. Limitations: The limitations of this studied noted and further research suggestions are also included that are very important for service recovery. Values: This research had enhanced and widens the understanding on the effect of service failure severity and effect of service recovery on customer satisfaction for mobile industry in Malaysia.

The effects of perceived service recovery justice on customer affection, loyalty, and word-of-mouth

Purpose – This research aims to examine the consequences of customer justice perception and the role of customer affection in the context of service failure and recovery. Design/methodology/approach – Survey data were analyzed using confirmatory factor analysis and structural equation modeling. Findings – The authors' findings indicate that procedural and interactional justice perceptions significantly influence customer affection, with distributive justice perception being significant only if the failure severity is high. The present research also provides evidence for the links between customer affection and loyalty, and customer affection and word-of-mouth respectively, indicating that strengthening the emotional tie between customers and companies is crucial after service failure and recovery. Research limitations/implications – The present research makes a significant contribution by demonstrating the relationship between customer affection and other key constructs such as justice perception, customer loyalty, and word-of-mouth intention. Practical implications – Customers' distributive justice perception has a significant impact on customer affection especially in a severe service failure situation. Therefore, managers may need to provide monetary compensation for service recovery in a timely manner along with apologies to enhance customer affection when customers experience a high-magnitude service failure. On the other hand, in the case of a low-magnitude service recovery, providing apologies and prompt response to service failures may be enough to win customers back. Originality/value – The current findings highlight the importance of customer affection in service recovery. The effect of customers' distributive justice perception on customer affection, which is moderated by service failure severity, is also highlighted.

정보서비스 실패에 대한 회복 방법이 온라인 이용자의 공정성과 만족도에 미치는 영향에 관한 연구

본 연구의 목적은 대학 도서관 이용자에 대한 정보서비스 실패의 심각성이 서비스 회복 공정성에 어떤 역할을 하는지, 그리고 이러한 서비스 회복 노력들이 이용자의 만족과 재이용에는 어떤 영향을 미치는 지를 분석하고자 하였다. 실증분석을 위해 대학 도서관의 정보서비스 실패를 경험한 대학생을 대상으로 452부의 설문지를 회수하여 분석하였으며, 다음과 같은 결과를 파악하였다. 첫째, 서비스 실패의 심각성이 강할수록 서비스 회복을 위한 공정성에 부(-)의 영향을 미친다. 둘째, 서비스 회복을 위한 서비스 회복 공정성 인식이 높을수록 이용자의 회복 만족도는 높아진다. 셋째, 서비스 회복의 절차적 공정성, 상호작용 공정성 인식이 높을수록 이용자의 재이용과 추천 의도는 높아질 수 있다. 마지막으로, 정보서비스 실패에 대한 서비스 회복 노력으로 이용자의 회복 만족도가 높아질수록 대학도서관의 이용자가 다시 찾거나 다른 이용자에게 이용을 권유한다고 할 수 있다.

Can Loyal Customers Tolerate Service Failure? The Moderating Roles of Service Failure Severity and Transaction Frequency in a B2B Context

Fans can tolerate their idol arriving one hour late at a concert, but could perhaps not accept news of an idol’s immoral conduct. Therefore, there likely are some moderators between the loyalty of fans and their zone of tolerance to service failure. This study examines the moderating effects of service failure severity and transaction frequency on the relationship between customer loyalty and the zone of tolerance to service failure within the hair salon industry in Taiwan. By the analysis of survey data from 113 customers, the results of the study show that monthly transaction frequency significantly moderates the relationship between customer loyalty and tolerance to service failure. Service failure severity (product delivery mistakes and poor service attitude) also significantly affects this relationship. Therefore, firms should increase transaction frequency and reduce service failure in order to enlarge the tolerance zone, especially after service failure has occurred. This study concludes with related recommendations for practitioners and academics.

Complaining Behaviors in Restaurants New Roles in Failure Scenarios

AbstractCustomers’ complaining behavior has become a key issue in the restaurant industry. The present study investigated the effects of customer involvement, service stages and failure severity as manipulating factors on customers’ complaining behavior in fine dining restaurants. Based on a 2×4×2 between subjects experiment, data were collected from a sample of 714 randomly selected Iranian customers of 4 well known fine dining restaurants of Tehran. Public actions, negative marketing actions, and asking for recovery actions were extracted by an exploratory factor analysis as the three main components of complaint behavior. Also, a discriminant analysis was performed to determine the underlined construct of components, and 3-way factorial ANOVAs and MANOVA tests were administered to examine the effects and interactions. Most of the effects were meaningful especially in case of service stages and failure severity. Findings showed that different interactions of factors resulted in different components of c...

Pre‐recovery and post‐recovery emotions in the service context: a preliminary study

PurposeThe purpose of this study is to analyze the mediating role of pre‐recovery emotions on the relationship between severity of service failure and post‐recovery positive and negative emotions and to examine the mediating role of justice perceptions on the interaction between pre‐recovery and post‐recovery emotions.Design/methodology/approachQuantitative data were collected in the form of questionnaire which was applied to 238 respondents. The respondents include the consumers who experienced a service failure followed by a service recovery. In this study, post‐recovery positive and negative emotions were dependent variables whereas severity of service failure, pre‐recovery emotions and three dimensions of justice perceptions were the other main variables. In line with this purpose, eight hypotheses aiming to clarify the relations among these variables were tested using correlation and hierarchical regression analysis.FindingsThe results suggest that post‐recovery negative emotions were affected by pre‐recovery emotions with the mediating role of distributive justice perceptions. The findings of this research reveal that dealing successfully with pre‐recovery emotions and integrating these emotions with favorable distributive justice perceptions have critical importance in mitigating the post‐recovery negative emotions.Practical implicationsDuring service recovery, service providers must concentrate on positive and negative emotions concurrently. Besides, managers also have to take pre‐recovery emotions into consideration and exert a special effort on distributive justice in order to decrease the intensity of post‐recovery negative emotions. Selection of recovery types, the effects of these on distributive justice perception and responding promptly to prevent pre‐recovery negative emotions are critically important for service providers.Originality/ValueThis study differs by focusing on pre‐recovery and post‐recovery emotions within a holistic view, which recommends the service providers an alternative perspective for being more proactive.

The role of personality characteristics and service failure severity in consumer forgiveness and service outcomes

This study investigates how consumer personality characteristics of religiosity, spirituality, and emotional intelligence and the severity of service failure affect emotional and decisional forgiveness as a response to service failure. Further, the study explores the relationships between these two forms of forgiveness and service outcomes, including the intention to switch the service provider and spread negative word of mouth. Findings reveal that consumer religiosity has a strong and positive effect on both types of forgiveness. However, contrary to expectations, consumer spirituality has a negative relationship with decisional and no relationship with emotional forgiveness. While consumers' perceived severity of service failure is negatively related to both types of forgiveness, the findings also suggest that emotional intelligence exerts a significant moderating influence on the relationship between service failure severity and emotional forgiveness, whereas its moderating effect on decisional forgiveness does not appear to be significant. Results demonstrate the asymmetric effects of perceived severity of service failure and the two types of forgiveness on negative service outcomes. These findings contribute to the understanding on the role of consumers' implicit personality characteristics in interpretation of service failure incidents.

An experimental design of service failure, recovery and speed analysis in cloud service

This experimental study examines how the severity of service failure, level of service recovery, and speed of recovery influence consumers’ attribution processes, post-recovery satisfaction and behavior outcomes in a cloud services setting. A 3×3×3 between-subject factorial design is utilized that manipulates the severity of service failure, the level of service recovery, and the speed of service recovery affect consumer outcome attributions. The findings indicate that there is a two-way interaction between service failure, service recovery, and speed of recovery and that the impact on post-recovery satisfaction is significant, the three-way interaction between severity of service failure, level of service recovery, and speed of recovery does not have a joint effect on post-recovery satisfaction. This study offers new insights into the stream of research on service failure and recovery. Key words: Cloud service, service failure, service recovery, speed of recovery, satisfaction.

The Change in Trust toward Social Commerce Companies after Failure of Social Commerce Services: Focusing on Severity and Main Source of Service Failure, and Brand Equity of Social Commerce Companies

미국 그루폰(Groupon)의 성공 이후 미국뿐만 아니라 전 세계적으로 소셜커머스 붐이 일어나고 있다. 국내에만 400~500개의 소셜커머스 업체가 생겨났으며 소셜커머스 시장은 시간이 갈수록 커지고 있는 추세이다. 국내 소셜커머스 시장의 도입 시기는 최근이지만 소셜커머스 서비스 실패 사례 및 소비자 피해 사례는 급증하고 있으며 이슈화 되고 있다. 따라서 소셜커머스 서비스 실패에 대한 집중적 연구의 필요성이 제기되고 있다. 소셜커머스의 서비스 유형은 기존의 전자상거래의 서비스와는 차별화되는데, 이는 소셜커머스만의 독특한 비즈니스 모델에 기인한다. 소셜커머스는 서비스나 상품을 소비자들에게 광고하고 이에 대한 할인쿠폰을 판매하는 소셜커머스 업체와 실질적으로 그 상품이나 서비스를 제공하는 서비스 업체로 구성된다. 따라서 서비스 실패는 소셜커머스 업체의 실패와 서비스를 제공하는 업체의 실패로 나누어지며 두 개 업체의 서비스 수준이 전체 서비스의 질을 결정하게 된다. 본 연구의 목적은 서비스 실패의 심각성, 실패의 주체 및 소셜커머스 업체의 브랜드 에쿼티가 각각 소비자의 소셜커머스 업체에 대한 신뢰변화에 미치는 영향을 알아보고, 서비스 실패의 주체에 따른 소비자의 신뢰 변화에 실패의 심각성과 소셜커머스 업체의 에쿼티의 조절 영향을 알아보는 것이다. 연구 결과, 서비스 실패의 심각성과 소셜커머스 업체의 브랜드 에쿼티가 높을수록 서비스 실패 후 소셜커머스 업체에 대한 소비자의 신뢰는 낮아지는 것으로 나타났다. 실패의 주체가 소셜커머스 업체일 경우, 실패의 심각성이 높을 때는 낮은 에쿼티를 가진 소셜커머스 업체에 비해 높은 에쿼티를 가진 소셜커머스 업체에 대한 소비자의 신뢰변화가 더 큰 것으로 나타났다. 반면에 실패의 심각성이 낮을 때는 소셜커머스업체의 브랜드 에쿼티에 따른 소비자의 신뢰변화 차이는 유의하지 않은 것으로 나타났다. 한편 서비스 실패의 주체가 서비스 제공업체일 경우, 실패의 심각성이 높을 때는 소셜커머스 업체의 에쿼티에 따른 소비자의 신뢰 변화 차이는 유의하지 않은 것으로 나타났지만 실패의 심각성이 낮을 때는 낮은 브랜드 에쿼티를 가진 소셜커머스 업체보다 높은 에쿼티를 가진 소셜커머스 업체에 대한 소비자의 신뢰변화는 더 큰 것으로 나타났다. 이상의 실증결과를 바탕으로 실무적 시사점 및 향후 연구방향에 관하여 논의하였다.

Confirmatory Factor Analysis of Determinants of Service Recovery

This study conceptualizes a framework of service recovery based on equity theory by developing constructs measuring the behavioural intentions of complainants and non-complainants during service failure. Measures of justice, severity of service failure and satisfaction with service recovery are used to design a new scale. Primary data is collected in two separate studies surveying 241 and 752 mobile phone users respectively. The scale is tested for reliability and validity using structural equation modelling. Confirmatory factor analysis (CFA) is used to assess its unidimensionality and model fit. The analysis reveals a good model-fit and the new scale reports for convergent and discriminant validity. This reliable and valid service recovery scale helps in comprehending the theory behind service failure and recovery and enables an understanding of perceived justice in a consumer’s mind post service failure.

Construction of a service failure severity and recovery model

This study investigates, whether consumers’ personality traits play a critical role in service recovery rate, recovery manner, and perception with varied service failure severity by surveying consumers of restaurant chain stores near north and south Taiwan Science and Technology Parks. The empirical results indicated that the more severe the perceived service failure, the more active and rapid the recovery measures adopted by consumers in Western cultures in comparison to those measures adopted by consumers in Eastern cultures. The player is expected to take more active and rapid recovery measures than the consumer with a more introverted personality. As a result, player response recovery rate will be quicker than that of the more introverted personality. Similarly, the player’s recovery will vary in psychological perceptions of fairness due to the varying personality characteristics of the consumers. This study integrated a linear multivariate analysis and an empirical nonlinear fuzzy artificial neural network model. The related study is unusual in that it varies from previous studies that have focused primarily on Western enterprises. This study considers small to medium enterprises in Taiwan as its sample and examines forward management implications.

The Effect of Recovery Locus Attributions and Service Failure Severity on Word-of-Mouth and Repurchase Behaviors in the Hospitality Industry

Based on a survey of 377 American hospitality customers, this study examines the effect of recovery locus attributions and service failure severity on customer word-of-mouth and repurchase behaviors. Findings indicate that for satisfactory recoveries attributed to a hospitality firm, relative to employee or customer attributions, the customer is more likely to discuss the encounter, share information with a wider social network, and both convince others to use the service provider and to have repatronized the firm. The results also suggest that the more severe the initial failure, the greater the likelihood that a critical incident had been discussed with a wider social network and the greater the likelihood of warning and convincing others to not patronize the hospitality organization. For unsuccessful (i.e., dissatisfactory) hospitality-based recovery attempts, the recovery locus attribution was not significantly associated with the word-of-mouth and repurchase behaviors investigated in this study.

The relationship of service failure severity, service recovery justice and perceived switching costs with customer loyalty in the context of e-tailing

Given that e-tailing service failure is inevitable, a better understanding of how service failure and recovery affect customer loyalty represents an important topic for academics and practitioners. This study explores the relationship of service failure severity, service recovery justice (i.e., interactional justice, procedural justice, and distributive justice), and perceived switching costs with customer loyalty; as well, the moderating relationship of service recovery justice and perceived switching costs on the link between service failure severity and customer loyalty in the context of e-tailing are investigated. Data collected from 221 useful respondents are tested against the research model using the partial least squares (PLS) approach. The results indicate that service failure severity, interactional justice, procedural justice and perceived switching costs have a significant relationship with customer loyalty, and that interactional justice can mitigate the negative relationship between service failure severity and customer loyalty. These findings provide several important theoretical and practical implications in terms of e-tailing service failure and recovery.

The influence of failure severity and employee effort on service recovery in a service guarantee context

This experimental study utilised a sample of 131 online panel members to examine how service failure severity and perceived employee effort influence consumers’ postrecovery negative WOM and trust evaluations in the context of a 100% satisfaction guarantee. In this study, while the promised guarantee compensation is forthcoming, the failure remains uncorrected. Findings indicate that while the level of effort does not influence negative WOM when a major problem eventuates, high versus low levels of effort are appreciated for a minor failure. Evaluations of trust are enhanced when employees display a high versus a low level of effort across both minor and severe failure conditions. Overall, findings suggest that it would be unwise for organisations offering a “100% satisfaction or your money back” guarantee to rely too heavily on economic compensation to recover from service failures; the failure itself must also be rectified.

PENGARUH SERVICE FAILURE SEVERITY TERHADAP KEPUASAN, KEPERCAYAAN, KOMITMEN DAN NEGATIF WORD OF MOUTH

The background of this research was to investigate the main and interactive effects of the severity of the service failure, specifically investigate the main effect of service failure severity on satisfaction,trust, commitment, and negative word of mouth. This investigation of the role of the severityconstruct will aid researchers and managers in better understanding and managing the service recovery process under different conditions.The objectives of this research is to extends previous research by investigating the role of service failure severity within the existing framework of customer’s post-recovery evaluation and their future relationship with a service provider.The design of this research applies a survey toward unit analysis on customer Auto2000 Jakarta, which involved 142 respondent.the number of sample being respondent in this research. Meanwhile, the required data consist of five variables : service failure severity, satisfaction, trust, commitmentand negative word of mouth.The result of the study concludes that service failure severity has a significant main effect on satisfaction with service recovery. Despite the positif influence of a strong recovery on satisfaction,there remained a negatif influence on satisfaction as a result of a more severe servicefailure. In addition , the severity of a service failure also had a main effect on customer trust, commitment and the likelihood of engaging in negative word of mouth after the service failure.Keywords : Service failure severity, satisfaction, trust, commitment and negative word of mouth

Online auction service failures in Taiwan: Typologies and recovery strategies

Online auctions are a new trading model that integrates auction mechanisms and the Internet. However, during the interaction between buyers and sellers, service failures inevitably occur. When service failures occur, selecting an effective service recovery strategy to correct the failure is an important issue. In this study, 867 failure incidents from buyers of online auction service encounters are classified into eighteen categories in three main groups, and the recovery strategies are classified into 10 types. An effective strategy is also identified for each service failure. Moreover, this study proposes the “service failure severity – post-recovery repeat purchase intention matrix” to rank the service failures that should be avoided. This study can help online auction sellers understand buyer perceptions of service failure and recovery strategies to improve service quality, avoid negligence and make proper recovery decisions.

Do it right this time: The role of employee service recovery performance in customer-perceived justice and customer loyalty after service failures.

Integrating justice and customer service literatures, this research examines the role of customer service employees' behaviors of handling customer complaints, or service recovery performance (SRP), in conveying a just image of service organizations and achieving desirable customer outcomes. Results from a field study and a laboratory study demonstrate that the dimensions of SRP--making an apology, problem solving, being courteous, and prompt handling--positively influenced customer satisfaction and then customer repurchase intent through the mediation of customer-perceived justice. In addition, service failure severity and repeated failures reduced the positive impact of some dimensions of SRP on customer satisfaction, and customer-perceived justice again mediated these moderated effects.

The impact of service failure severity on service recovery evaluations andpost‐recovery relationships

Previous research has found that interactional justice and distributive justice are critical factors influencing customer satisfaction after a service recovery. In addition, previous service recovery research has found that satisfaction is an important determinant of key outcome variables such as trust, commitment, and negative word‐of‐mouth. The current study extends previous research by investigating the role of service failure severity within the existing framework of service recovery research. The results indicate that service failure severity has a significant influence on satisfaction, trust, commitment, and negative word‐of‐mouth. The results also provide partial support for a moderating influence of service failure severity. Implications and areas for future research are discussed.