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The service recovery paradox: true but overrated?

Stefan Michel (Global Business Department, Thunderbird, School of Global Management, Glendale, Arizona, USA)
Matthew L. Meuter (Department of Finance and Marketing, California State University, Chico, California, USA)

International Journal of Service Industry Management

ISSN: 0956-4233

Article publication date: 8 August 2008

Abstract

Purpose

The paper's aim is to test the existence of the service recovery paradox.

Design/methodology/approach

To date, much of the literature exploring the service recovery paradox has generated mixed results. The paper argues that a service recovery paradox is a rare event, which makes its measurement difficult, since the “treatment group” sample size is usually too small to produce significant results. For that reason, the existence of the service recovery paradox in a banking context with more than 11,000 customer interviews based on actual customer encounters is tested.

Findings

Overall, the survey findings support the argument that a service recovery paradox is a rare event, and the hypothesized mean differences are, albeit significant, not very large, which diminishes their managerial relevance to some degree.

Research limitations/implications

Because of the required extremely large sample size, no multi‐item measures were collected. Furthermore, privacy concerns restricted us from a longitudinal study and from linking the survey results to behavioural data. Both limitations are inherent in the chosen setting.

Practical implications

While a service failure offers an opportunity to create an excellent recovery, the likelihood of a service paradox is very low. The implications of verifying a service recovery paradox do not suggest that ineffective service followed by an outstanding service recovery is a viable strategy.

Originality/value

To the authors' knowledge, this is the first empirical study testing not only the existence of the service recovery paradox, but also exploring its magnitude and frequency. This is crucial because the paradox is a very rare event, which, in turn, limits its managerial relevance.

Keywords

Citation

Michel, S. and Meuter, M.L. (2008), "The service recovery paradox: true but overrated?", International Journal of Service Industry Management, Vol. 19 No. 4, pp. 441-457. https://doi.org/10.1108/09564230810891897

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited