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Journal of Services Marketing
Service recovery: Impact on satisfaction and intentions
Richard A. Spreng Gilbert D. Harrell Robert D. Mackoy
Article information:
To cite this document:
Richard A. Spreng Gilbert D. Harrell Robert D. Mackoy, (1995),"Service recovery: Impact on satisfaction and intentions",
Journal of Services Marketing, Vol. 9 Iss 1 pp. 15 - 23
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http://dx.doi.org/10.1108/08876049510079853
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Christo Boshoff, (1997),"An experimental study of service recovery options", International Journal of Service Industry
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K. Douglas Hoffman, Scott W. Kelley, Holly M. Rotalsky, (1995),"Tracking service failures and employee recovery efforts",
Journal of Services Marketing, Vol. 9 Iss 2 pp. 49-61 http://dx.doi.org/10.1108/08876049510086017
Anna S. Mattila, (2001),"The effectiveness of service recovery in a multi-industry setting", Journal of Services Marketing, Vol.
15 Iss 7 pp. 583-596 http://dx.doi.org/10.1108/08876040110407509
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were satisfied and did not complain (Gilly, 1987). Service recovery efforts
are likely to be very salient to consumers, due to heightened attention and
evaluation as a result of the service failure. In addition, the recovery process
is likely to be the last experience the consumer has had with the company,
resulting in a recency effect. Thus, when the consumer contemplates a
service provider for the next transaction, the effectiveness of the service
recovery effort may have a greater effect on intentions than the original
service failure.
Further, ineffective service recovery efforts have the potential of increasing
dissatisfaction. Hart et al. (1990, p. 150) found that More than half of all
efforts to respond to customer complaints actually reinforce negative
reactions to service (emphasis in original).
Within the Berry and Parasuraman (1991) framework, then, the question of
relative influence of original versus recovery activities on satisfaction arises.
Thus, the first key research question addressed in this study is: given that a
service problem has occurred, how important are service recovery processes
relative to the initial service outcomes in contributing to overall satisfaction?
Repeat purchase behavior is an important issue for most marketers. While
many marketing activities are designed to gain new customers, concern for
repeat purchasing by current customers is designed to maintain existing
customers by decreasing customer exit. Since the cost of gaining a new
customer usually greatly exceeds the cost of retaining a customer, managers
are increasingly concerned with minimizing customer defections. Research
has consistently found a relationship between satisfaction and repurchase
intentions (see Yi, 1990, p. 104 for a review). Therefore, one of the
important consequences of satisfaction is increased repurchase intentions.
Halstead and Page (1992) found that satisfaction with the complaint
response led to higher repurchase intentions for dissatisfied consumers, i.e.
satisfaction with the service recovery process influenced intentions.
Word of mouth Similarly, WoM has been identified in past research as an important
postpurchase behavior for several reasons (Day, 1980). WoM
communication provides face-to-face, often vivid information that is highly
credible. This information can influence others beliefs about a particular
firm, and their intentions to purchase from the firm. There is also evidence
0.21 Repurchase
Satisfaction intention
with driver
0.20
1.0
Satisfaction
with damage 0.34 Word of
mouth
Satisfaction
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with claims
personnel
is not 100% satisfied, and this guarantee is likely to elicit complaints that
would not normally be made. Too often customers choose not to complain,
and instead just take their business to a competitor. The company has a
better chance of retaining a customer by encouraging that customer to
complain, and then addressing the complaint, than it does by assuming that
non-complaining customers are satisfied. Identifying and contacting
consumers who have experienced service failure is a necessary first step in
trying to rectify problems.
Reevaluating budget Third, because it is more cost effective to retain a customer than it is to
allocations attract a new customer (see Fornell and Wernerfelt, 1987), companies should
reevaluate their relative budget allocations to these two activities. Are
service recovery programs adequately funded? As Firnstahl (1989) points
out, although service recovery programs can be expensive, they can be
viewed as opportunities to make service system improvements that will
ultimately result in more customers who are satisfied with the firm, as well
as reductions in costs through the improvements on the service delivery
system. Since each complaint often represents many other customers who
were dissatisfied, but did not complain, actively encouraging customer
complaints for the purpose of improving the service delivery system is an
excellent way to collect information about the firms performance. Further,
service recovery programs can provide benefits by viewing it as positive
word-of-mouth advertising.
The current study does raise additional questions. For example, why did
service recovery activities play such a large role in forming overall
satisfaction? Future research can address the specific reasons why this is
true. A second question concerns the accuracy of measuring customer
evaluations only after the problem occurred. In this study, it is possible that
by collecting data only after the recovery process (and therefore, after the
damage occurred), consumer responses to other original service attributes
are biased. Given how data were collected in this study and in virtually all
other studies of service recovery, it is impossible to analyze the effects of
measurement timing. Future longitudinal studies can address the question of
whether measurement bias is introduced by collecting data only at the
conclusion of service recovery efforts.
References
Andreasen, A.R. and Best, A. (1977), Customers complain does business
respond?, Harvard Business Review, Vol. 55, July-August, pp. 93-101.
Berry, L. and Parasuraman, A. (1991), Marketing Services, The Free Press, New
York, NY.
Bitner, M.J., Booms, B.H. and Tetreault, M.S. (1990), The service encounter:
diagnosing favorable and unfavorable incidents, Journal of Marketing, Vol. 54,
January, pp. 71-84.
Day, R. (1980), Research perspectives on consumer complaining behavior, in
Theoretical Developments in Marketing, Lamb, C.W. and Dunne, P.M. (Eds),
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Appendix
Method
The study population consisted of households completing interstate moves within the
continental USA during a three-month period. A random sample of 5,520
households was selected and received a mail questionnaire from a major university.
An introductory note addressed the questionnaire to the person most responsible for
decisions regarding the move.
A total of 1,447 questionnaires were completed, and although the 26% response rate
compares favorably with research using the mail-out methodology, potential
nonresponse bias was still a concern. Therefore, a telephone validation survey with a
Downloaded by Michigan State University At 07:48 12 November 2015 (PT)
sample of respondents (143) and nonrespondents (72) was completed. The telephone
survey used wording identical to that used here. Results were similar between
respondents and nonrespondents, although the former tended to be slightly more
satisfied on some measures. Since there was no evidence of differences in the
relationships between specific attributes and overall behavioral intentions, it was
deemed appropriate to proceed with detailed analysis of the mail-out results.
Subjects were instructed to rate only those aspects of the move with which they had
contact. Respondents who had damage to their belongings and who completed all
relevant measures were retained for this analysis. This produced a final sample size
of 410.
Measures of constructs
Five-point scales anchored by extremely dissatisfied (1) and extremely satisfied
(5) were used for all measures except repeat purchase intention and word of mouth.
The repeat purchase intention measure asked: If needed, would you select the same
company again? (yes/no). The word-of-mouth question was: If asked, would you
recommend this company to others?, using a five-point scale anchored by no and
extremely likely, with somewhat likely as a midpoint.
Results
Like most measures of satisfaction, most of the data were slightly negatively skewed
(Peterson and Wilson, 1992). Also as expected, satisfaction with damage was
positively skewed, since all 410 subjects had contact with the claims personnel
regarding damage. Means are not presented in order to preserve confidentiality
regarding the amount of satisfaction/dissatisfaction.
Path analysis was conducted using LISREL. LISREL is a structural equations
modeling program which estimates the path coefficients that show the relationships
among variables. The coefficients can be interpreted in the same way as standardized
coefficients in regression analysis, that is, larger coefficients indicate stronger
relationships between variables. Parameter estimates and model fit indices (LISREL
8) are reported in Table AI.
Indirect effects of one variable on another (discussed in the text) are calculated by
multiplying the standardized coefficients. For example, the indirect effect of
satisfaction with the damage on WoM is 0.25 0.87 = 0.22, while the indirect effect
of satisfaction with claims personnel is 0.37 0.87 = 0.32. The indirect effects are
also available in the LISREL output.
Antecedent relationships
Initial service attributes:
Proper packing > overall satisfaction 0.21 6.75
Driver > overall satisfaction 0.20 6.96
Pick-up time > overall satisfaction 0.22 7.76
Damage > overall satisfaction 0.25 7.35
Consequent relationships
Effects of overall satisfaction:
Overall satisfaction > word of mouth 0.87 24.88
Overall satisfaction > intentions 1.00 35.46
Downloaded by Michigan State University At 07:48 12 November 2015 (PT)
a Claims
personnel > overall satisfaction path is significantly larger than the damage >
overall satisfaction path at p < 0.08; it is significantly larger than the paths associated with
the other three initial service attribute paths at p < 0.01
Notes:
Model fit indices are as follows: 2 = 66.53; degrees of freedom = 17; p-value = < 0.001;
goodness-of-fit index = 0.97; and root mean square residual = 0.025
Table AI. Parameter estimates and model fit indices (completely standardized
results)
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