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This study aims to examine the perceived fairness of overcompensation for severe service failures. The mediating effect of perceived fairness in the overcompensation‐negative word‐of‐mouth (NWOM) intent relationship is also explored.

An experimental design approach was utilized to test the study's hypotheses. Overcompensation amount was manipulated at three levels (50 percent, 100 percent, 200 percent of purchase price), with two forms of overcompensation (cash or credit) tested.

Cash‐based overcompensation yielded higher perceptions of distributive justice than full compensation, with no significant difference in distributive justice perceptions across cash amounts. Credit‐based overcompensation was perceived as no fairer than full compensation. Perceived distributive justice fully mediates the overcompensation‐NWOM intent relationship.

The study's findings are based on a single service context. Further research across different service environments is needed to confirm the robustness of the results. The results are based on scenarios rather than real events. A longitudinal field study that examines consumer reaction at the point of service recovery and tracks actual subsequent behaviors is merited.

The study's findings suggest that, when a severe service failure occurs, service firms should consider going beyond full compensation, offering the consumer an additional cash amount. However, more is not necessarily better – a small additional cash amount may induce similar perceptions of fairness to larger amounts.

This study yields insights into the perceptions of distributive justice associated with different amounts and forms of overcompensation for severe service failure, and demonstrates the mediating effect of perceived distributive justice in the overcompensation‐NWOM intent relationship.

Much of the research on crowding in a service context has focused on customer reaction to crowding in a retail setting. This paper seeks to examine the effect of consumer goals on consumers' reactions to crowding for extended service encounters.

The authors used a 2 (Crowding: crowded or not crowded) × 2 (Goal: utilitarian or hedonic) × 2 (Service level: bad or good) factorial, between‐subjects design to test hypotheses. Service level and tolerance for crowding were entered as control variables. A service encounter in a casual restaurant was used as the service setting in the study. Subjects were randomly assigned to a written scenario describing an experience in a restaurant. They were then shown a photograph depicting the interior of the restaurant.

Consumption goal moderates the effect of perceived crowding on satisfaction. Significantly lower satisfaction ratings are associated with a crowded service environment when the primary consumption goal for the service experience is utilitarian, rather than hedonic, in nature. Furthermore, regardless of the consumption goal, crowding negatively impacts positive in‐store behaviors (i.e. desire to spend more money and time at the restaurant).

The study was limited to one extended service setting. Future research across other extended service settings is needed establish the generalizability of the findings.

The study has implications for the design of the service facility and the application of demand‐shifting revenue management strategies.

The paper extends the literature on shopping motivations to extended service settings by examining the effect of consumer goals on consumers' reactions to crowding, specifically consumer satisfaction with, and consumer behaviors within, the extended service encounter.

Restaurant operators can process a greater number of customers and increase revenues by reducing service encounter duration during high demand periods. Actions taken to reduce duration may be experienced by customers as an increase in the pace of the service encounter. While achieving a reduction in duration may be appealing from a revenue perspective, will customers' perceptions of the resulting pace of the service encounter negatively impact their satisfaction? The aim of this paper is to propose that, in the context of restaurant experiences that are hedonic and extended in nature, the overall relationship between perceived service encounter pace and satisfaction follows an inverted U‐shape.

Respondents were asked to recall a recent (i.e. within the last three weeks) restaurant experience, write a description of that experience, and then complete scales that measured their perceptions of pace and satisfaction with the experience.

The relationship between perceived pace and satisfaction has an inverted U‐shape. This holds both at the level of the overall service encounter and by service stage within the encounter. The effect of perceived pace on satisfaction is moderated by service stage, with a greater tolerance of a faster pace during the post‐process stage than during the pre‐process or in‐process stages.

The results of this study have implications for the application of revenue management strategies for duration control. Management need to consider the negative effect that service encounter pace can have on consumer satisfaction. Service stage should also be factored into strategy development for duration control.

This paper extends the wait time literature, demonstrating that as the perceived pace of the service encounter increases, satisfaction increases, but only up to a point, beyond which it decreases as perceived pace continues to increase.

This paper aims to explore the role of six sigma in the assembly of service components, during the service exchange. Specifically, it seeks to examine whether applying six sigma principles to customer‐facing processes enhances customer satisfaction.

The paper uses a field study to examine the relationship between conformance with a standardized service assembly process and customer satisfaction. Data were collected over a two‐month period using participant observation at the front desk of a leading hotel, and were analyzed using logistic regression.

The results of the study provide a basis for discussion of the issues associated with applying six sigma to the service assembly process. The results suggest that the application of six sigma to customer‐facing processes does not improve customer satisfaction.

Much of the documented success of six sigma has focused on its application to processes with minimum or no customer involvement. In contrast, this paper focuses on the application of six sigma in the service exchange, which typically encompasses a high degree of customer involvement. The paper also adopts a customer‐centric view and differentiates two different processes in a service exchange. This novel view suggests fresh theorizing and research directions. The intent is to encourage discourse among academics and practitioners regarding the applicability of six sigma in a service setting, and identify avenues for future research in this domain.

Argues that in order to sustain the long‐term profitability and growth of hotel organizations, yield management decisions must incorporate two critical constraints: the cost implications of the customer mix and guest ancillary spend. Proposes that customer profitability analysis (CPA), which reports revenues, costs and profit by customer group, will give management the ancillary spend and cost information that will enhance customer mix decisions over a long‐term horizon. Identifies that the key to CPA lies in the application of an appropriate method of allocating costs to customers and proposes that activity‐based costing is the optimal costing solution.