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This paper aims to examine counterfactual thinking as a key mediator of the effects of failed recovery (vs. failed delivery) on negative electronic word-of-mouth (eWOM). The authors further investigate the effectiveness of using recovery co-creation in minimizing customers’ counterfactual thinking.

This research includes textual analysis of online reviews (Study 1) and three scenario-based experiments (Studies 2, 3a and 3b). In addition to using item-response scales, the authors analyze negative online reviews and participants’ open-ended responses to capture their counterfactual thinking.

Failed recovery (vs failed delivery) increases counterfactual thinking, which, in turn, increases negative eWOM. These mediating effects of counterfactual thinking are consistent across textual analyses and experimental studies, as well as across different measures of counterfactual thinking. Counterfactual thinking also impacts customer anger in experiments; however, anger alone does not explain the effects of failed recovery on negative eWOM. Counterfactual thinking can be minimized by co-created recovery, especially when it is used proactively.

The findings demonstrate the detrimental effects of counterfactual thinking and offer managerial insights into co-creation as a strategy to minimize customers’ counterfactual thinking. The authors also highlight the importance and ways of tracking counterfactual thinking in digital outlets.

The authors contribute to counterfactual thinking and service recovery research by demonstrating the effects of failed recovery on counterfactual thinking that, in turn, impacts negative eWOM and offering a novel way to measure its expression in online narratives. The authors provide guidance on how to use co-creation in the service recovery process to minimize counterfactual thinking.

Drawing on the fairness theory, this paper aims to propose a conceptual framework that investigates how co-creation in the failed service delivery (coproduction intensity) and co-creation in the service recovery affect customers’ evaluation of the firm’s competence, justice and ethicalness, and ultimately their willingness to co-create in the future.

Tax services were chosen as the research context. A consumer panel consisting of individuals who live in the USA and have used tax preparation services within the past year was recruited. The first study explores what happens to customers’ ethical perceptions during a failed co-created service encounter. A secondary study investigates what happens to customers’ ethical perceptions in the event that the failed co-created service is recovered.

The findings show that customers’ perceptions of the firm’s abilities and ethics are impeded by coproduction intensity but favorably influenced by co-creation of recovery.

A sense of ethicalness and fairness is violated when co-created service failure occurs, but fortunately, practitioners can count on engaging customers in the service recovery process as co-creators of the solution to positively alter perceived ethicalness and fairness.

Failed co-created services represent an under-researched area in the marketing literature. Current investigations of co-created service failures have largely approached the notion of fairness from a perceived justice perspective without referencing ethical judgments. However, fairness is grounded in basic ethical assumptions of normative treatment. This research is among the first to highlight the importance of perceived ethicalness in the context of co-created service failure and recovery.

As an emerging technology, medical artificial intelligence (AI) plays an important role in the healthcare system. However, the service failure of medical AI causes severe violations to user trust. Different from other services that do not involve vital health, customers' trust toward the service of medical AI are difficult to repair after service failure. This study explores the links among different types of attributions (external and internal), service recovery strategies (firm, customer, and co-creation), and service recovery outcomes (trust).

Empirical analysis was carried out using data (N = 338) collected from a 2 × 3 scenario-based experiment. The scenario-based experiment has three stages: service delivery, service failure, and service recovery. The attribution of service failure was divided into two parts (customer vs. firm), while the recovery of service failure was divided into three parts (customer vs. firm vs. co-creation), making the design full factorial.

The results show that (1) internal attribution of the service failure can easily repair both affective-based trust (AFTR) and cognitive-based trust (CGTR), (2) co-creation recovery has a greater positive effect on AFTR while firm recovery is more effective on cognitive-based trust, (3) a series of interesting conclusions are found in the interaction between customers' attribution and service recovery strategy.

The authors' findings are of great significance to the strategy of service recovery after service failure in the medical AI system. According to the attribution type of service failure, medical organizations can choose a strategy to more accurately improve service recovery effect.

The purpose of this paper is to introduce and test customer perceptions of four types of value co-creation (VCC), explore VCC a priori condition of relatedness, operationalized as commercial friendship, examine customer voluntary participation in VCC through initiation (customer vs company), and the influence of these factors on relational outcomes of VCC: satisfaction, loyalty and trust.

A scenario-based 2×2×4 experimental design was set in a destination resort context: weak vs strong commercial friendship, customer vs company co-creation initiation and four types of VCC. The 248 resort guests were equally and randomly assigned to experimental conditions. Multivariate analysis of variance and repeated measures analysis of variance was utilized.

Results demonstrated that customers perceived VCC processes differently. Co-creation of experience and co-recovery outcomes had significantly higher relational outcomes when compared to co-creation of marketing and co-innovation. Experiencing stronger commercial friendship, as customer–company relatedness and being invited to co-create resulted in stronger customer relational outcomes.

The core theoretical contribution of this study is the comparative analysis of customer perceptions of four distinctly different types of VCC: co-innovation, co-creation of experience, co-creation of marketing and co-recovery. A priori conditions of relatedness and co-creation initiation were established as antecedents of VCC processes among customers and service providers. When a service provider initiates VCC, it can positively affect customers’ relational outcomes of satisfaction, loyalty and trust.

Service recovery is a challenge to organizations because customers will respond to recovery processes and outcomes differently. Yet, there are few studies that examine the antecedents of customer co-recovery. Hence, the purpose of this paper is to adopt a customer-dominant logic to explore the antecedents of customer co-creation of service recovery (CCSR) and its effects on perceived justice and satisfaction.

The authors reviewed the service management literature and proposed a theoretical model that links customer involvement with service failure (CISF), customer CCSR, perceived justice, to customer satisfaction with service recovery (CSSR). The sample included 594 customers who had recent experience of service failure and service recovery in Hong Kong. The research model was tested using structural equations modeling.

The results of structural equation modeling showed that CISF had an effect on customer CCSR in the form of information sharing and co-production, and this effect influenced customers’ justice perceptions, which in turn affected CSSR.

The findings supported the notion that service management should be viewed from customer-dominant logic and effective facilitation shall be deployed to engage and support customers in service recovery processes.

The study contributes to service management by identifying the salient role and form of customer co-creation in making customers feel satisfied with service recovery.

The purpose of this paper is to explore the underlying mechanism of customer co-creation in service recovery (co-recovery), and investigates the impact of initiation on customer post-recovery evaluations and behavioural intentions.

Researchers used a 3 (no co-recovery vs employee-initiated co-recovery vs customer-initiated co-recovery)×2 (male vs female)×2 (western vs eastern customers) between-subject experiential study in a hotel setting.

When a service employee initiates a co-recovery, customers perceive higher justice, greater satisfaction and a higher tendency to repurchase in the future. But if the customer initiates such a co-recovery, little improvement on these outcomes is found compared to a recovery entirely managed by the company. The effect was moderated by culture: western customers were more sensitive to initiation in the co-recovery process than eastern customers.

Written scenarios using a hotel setting and a technical error were used, and may reduce the applicability of the findings to real life or other service categories or types of error. Subjects used may not be representative of other population groups. Further studies using real life situations, human error and a more diverse population group are recommended.

A positive co-recovery can be achieved by service employees taking initiatives when a problem occurs.

This study extends previous research on co-recovery by investigating the effect of initiation by service employees on customers’ perception of co-creation. Service companies can improve customers’ post-recovery evaluations by inviting them to co-create a feasible solution, and potentially reduce the company's compensation costs.

This paper aims to develop a theoretical model to understand co-creation/co-destruction of value through customer engagement in online channels. It also investigates the contributing factors.

The qualitative approach uses the critical incidents technique to answer the research questions. The authors identify 350 critical incidents in which customers expressed online customer engagement-induced value co-creation or co-destruction experiences. The factors and resulting propositions are identified through data analysis. Data coding and analysis are facilitated by using MAXQDA 12.

Co-creation through positively valenced engagement behaviors may occur when customers are delighted, feel valued, experience reciprocity, receive organizational incentives, are solicited for feedback, can count on service recovery efforts and interact with helpful, empathetic, polite and responsive employees. Co-destruction through negatively valenced engagement behaviors emerges from rude employee behaviors, indifference, confrontation with company representatives, technological failure, the lack of complaint outlets and customers’ desire for revenge.

Selecting and training employees to be helpful, polite, responsive and empathetic toward online visitors can trigger co-creation. Communication between firms and customers should boost customer approval and delight. Organizations can offer incentives, reliable service delivery and a recovery design to stimulate visitor participation. Soliciting feedback requires sound technological support and direct communication links with visitors.

This study presents the conditions and framework contributing to the duality of customer engagement-induced co-creation and co-destruction values in online channels from the customer, organizational, employee, service design and technological perspectives. It also addresses how value is co-created or co-destructed through examples.

The purpose of this study is to deepen the understanding of consumers value collaboration with a service provider, specifically, how consumer self-determination affects value co-creation outcomes.

Self-determination theory (SDT) need-based motivational factors were operationalized in co-creation as commitment to resources (autonomy), feedback (competence) and collectives (relatedness). A between–within factorial experimental design (3 × 2 × 4) was conducted using online scenarios depicting value co-creation in a destination resort setting. Respondents were randomly and equally assigned to strong and weak SDT factor conditions. Next, they were exposed to scenarios depicting four types of value co-creation: co-innovation, co-creation of marketing, co-creation of experience and co-recovery, followed by an assessment of their co-created value (CCV), well-being, satisfaction and service advantage perceptions.

Results revealed that overall strong SDT conditions produce better outcomes. Consumers’ relatedness showed the strongest difference between strong and weak SDT conditions on the CCV dimensions. Further analysis revealed that autonomy and relatedness are crucial for collaboration. CCV meaningfulness is central for customers to improve their well-being, satisfaction and competitive advantage perceptions through co-creation.

The study contributes to a line of research on successful voluntary value co-creation processes between consumers and a company. The integration of service-dominant logic (SDL), axiology of value (AOV) and SDT, uniquely operationalized as commitment to resources as autonomy, feedback as competence and co-creation collective as relatedness offers a better understanding of how customers appraise the dimensions of CCV and outcomes of well-being, satisfaction and competitive advantage.

Drawing on justice theory, this study aims to investigate the determinants and consequences of post-recovery satisfaction in a business-to-business (B2B) sales environment. In addition, customer demandingness is used as a moderator in this study to assess the relationship between distributive justice (DJ), procedural justice (PJ) and interactional justice (IJ) and post-recovery satisfaction.

A conceptual framework was developed by testing five hypotheses based on data collected from 337 salesperson–customer dyads.

The findings of this study reveal that DJ, PJ and IJ are positively linked with post-recovery satisfaction. In addition, post-recovery satisfaction negatively impacts customer distrust. On the contrary, customer distrust positively influences value co-creation behavior and has a negative impact on trusting intention. Finally, the customer’s level of demandingness significantly and positively moderates the linkage between the dimensions of justice perception and post-recovery satisfaction.

Despite extensive literature on distrust, a research model that examines customers’ distrust attitudes toward service failure and B2B recovery satisfaction needs to be developed and validated. In this regard, the authors developed a framework to measure post-recovery satisfaction and its association with customers’ distrust in B2B a context.

Suggestion systems have always been used as the means of continuous development and co-creating values among the employees of organizations. On the other hand, the co-creation has been introduced as a solution to co-create values between companies and customers. Since a simultaneous study on setting up suggestion systems and co-creation among employees and customers have been ignored so far, the purpose of this paper, focussing on the combination of two strategies of suggestion systems (generally more effective among the employees of organizations) and co-creation (studied so far merely the scope of customers), is to evaluate variables leading to intention to use, improvement in understanding the concept of justice, and positive word-of-mouth.

Two between-subjects experiments were carried out to explore the interactional role of co-creation, reward, and time in efficiency of suggestion systems. The first study which was carried out among customers analyzed the effect of setting up suggestion systems along with co-creation on the amount of their intention to use this system in the future and positive word-of-mouth. The second study discussed the effect of setting up suggestion systems along with co-creation on the level of understanding organizational justice and commitment.

The results indicate that the effectiveness of co-creation and tangible factors, such as offered reward, on improving the evaluation of suggestion system. In the other word, when firm’s encourage customers to participate in value co-creation program in suggestion system, they perceive more justice and intend to participate more in such program in future.

Most of the previous studies carried out on co-creation considered its effectiveness on occasions when a service failure occurs to consumers and the service provider urgently needs service recovery, but this paper aimed to provide a collaborative perspective toward co-creation through suggestion system that puts emphasis on service experience, innovation, and intention to future participation in such programs.