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Quantifying the Dynamic Effects of Service Recovery

Measures

Communications

Apology

improvement

satisfaction

Buildup intensity and peak timing

According to the social exchange theory, a service recovery encounter can be viewed as an exchange in which the customer experiences a loss due to the failure and the organization’s ic

The survey also found that the offer of free goods or services following poor service was deemed important by less than 5% of the customers

Many scholars have identified the dominant importance of quality improvementbased service recovery efforts for recouping customer satisfaction, thus suggesting the relative stronger buildup effects of quality improvement than those of compensation or apology

Besides decay heterogeneity, service recovery strategies may vary in terms of buildup intensity and timing of the peak impact.

Hypotheses on the Dynamic Effects

Hypothesis

After service failures, the time-varying impact of service recovery strategies such as quality improvement, compensation, and marketing commutations on customer satisfaction has a long decay, while that of apology on customer satisfaction has a short decay

As such, affective factors evoke short-lived responses, thus leading to a short decay.

the impact of cognitive factors on customer satisfaction increases

That is, affective responses are evoked much quicker than cognitive responses

Do the effects of service recovery strategies on customer satisfaction

Controls to Rule Out Alternative Explanations to the Results

In addition, major economic events such as financial crisis may affect customer spending and, thus, may impact customer satisfaction

affected by other factors, for which we need to control.

During the recovery process, customer satisfaction may be

Data Setting

Subtopic

Top management of the company engaged in a dynamic, closed-loop strategy of service recovery.

Because service recovery strategies are implemented after the service failures, it is challenging to conduct systematic empirical research with real-world data on service failures recovery

Service Recovery Strategies

Companies known for excellent service go the extra mile to cover all the costs a failure incurs. If the inconvenience is so severe to customers

customers are usually more emotionally involved in recovery than in routine or first-time service

Recovery management has a significant impact on customer evaluations

Dynamic Effects

Evaluating the time-varying effects and contribution of marketing variables in the long run.