Service recovery: A re-conceptualisation

Nguyen, Doan Thuy Thi (2006). Service recovery: A re-conceptualisation PhD Thesis, School of Business, The University of Queensland.

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Author Nguyen, Doan Thuy Thi
Thesis Title Service recovery: A re-conceptualisation
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 2006
Thesis type PhD Thesis
Supervisor McColl-Kennedy, J.
Dagger, T.
Total pages 182
Collection year 2006
Language eng
Subjects L
350204 Marketing and Market Research
720401 Marketing
Abstract/Summary Despite considerable effort by organisations to provide excellent service, service failures occur. Increasingly, as the business environment becomes more dynamic and complex, it is unrealistic to expect service delivery to be completely error free (Bansal and Taylor 1999; Keaveney 1995a). When service failure occurs, firms are advised to put in effort to recover customers, because lost customers typically result in substantial financial and reputational loss (Hogan, Lemon and Libai 2003). Moreover, building relationships with customers is always considered as an ideal approach to avoid customers’ dissatisfaction with the recovery attempt. However, it appears that the majority (81%) of customers who complain are not happy with the complaint handling process (TARP 2001). The high percentage of dissatisfied customers suggests that current approaches to recovery are largely ineffective (Davidow 2003). In searching for explanations for the ineffectiveness of service recovery strategies, a programmatic research study was conducted. Study 1 is a qualitative study, including Study 1A and Study 1B. Study 1A was conducted on 199 consumer complaint letters, and Study 1B was conducted using 22 in-depth interviews. Study 2 is a quantitative study conducted on a consumer sample of 431 respondents. Study 2A is a scale development study and Study 2B is a structural equation modelling study. The research program is reported in seven chapters. Chapter 1 provides an overview of the thesis. Chapter 2 reviews service recovery literature. Chapter 3 outlines the methodology. Chapter 4 reports the results of Study 1. Chapters 5 and 6 report results of Study 2. Finally, Chapter 7 presents the conclusions, key theoretical and managerial implications, limitations, and suggestions for future research. In sum, the thesis proposes a conceptualisation of service recovery by providing a model that highlights the different aspects of the relationships between the following constructs: (1) Customer Recovery Expectations; (2) Purchase Deliberation Recollection; (3) Customer Emotional Attachment; and (4) customer’s Recovery Expectation Disconfirmation. Customer Recovery Expectations concept reflects the customer’s perception of an appropriate recovery attempt that they prefer in a particular service recovery context. Purchase Deliberation Recollection reflects the customer’s recalled time and effort invested in the purchase deliberation process. Customer Emotional Attachment captures the emotional connection between the customer and the service provider that motivates the customer to act in the provider’s interest. Lastly, the customer’s Recovery Expectation Disconfirmation describes the customer’s comparison between their preferred recovery solution and their received recovery solution. The relationships between these constructs significantly influence the two dependent variables: the customer’s satisfaction with recovery and their repurchase intention. The findings highlight that, in service recovery, creating a customer’s positive perception of recovery expectation matching attempt is the key. To affect this, employees should understand that the customer has a recovery expectation which the organisation should attempt to match. In addition, customers with a good and long term relationship with the organisation tend to have more sympathy when service failure occurs. However, long term customers may also be more demanding and have higher expectations than short term customers. When the organisation fails to recover the service failure for a long term customer, the negative effect of not appropriately recovering may outweigh the positive benefits of having a relationship. Therefore, once a good relationship has been built, organisations should be prepared to invest more resources to maintain it through time. That is, a relationship should be maintained in normal as well as in service failure situations. The findings thus have significant theoretical and managerial implications.

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Created: Fri, 21 Nov 2008, 14:23:57 EST