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Open Access
Article
Publication date: 7 December 2021

Zonaib Tahir

This paper aims to compare the relative importance of tangible compensation across the offline and online service mediums, and assess tangible compensation as a trust…

Abstract

Purpose

This paper aims to compare the relative importance of tangible compensation across the offline and online service mediums, and assess tangible compensation as a trust recovery tactic.

Methodology

This study is based on a 3 (compensation level: 20%, 50%, 100%) × 2 (compensation type: refund, coupon) × 2 (service medium: offline, online) scenario-based experimental design.

Findings

The offline and online customers exhibit different satisfaction for the respective values of both the immediate and delayed compensation types. Moreover, offline customers exhibit more trust in the firm when they receive a refund, whereas their online counterparts demonstrate a higher trust when provided with a coupon.

Practical implications

For a service failure such as the one presented in the experimental study’s scenario, a lower (higher) value coupon will generate more (less) satisfaction compared to providing the same value as a refund. Firms will be better off by providing partial compensation in the form of a coupon, rather than a refund.

Originality

Unlike most studies of service recovery, this research takes into account the perceived differences of various tangible compensations to provide a comparison of offline and online customers’ recovery preferences. Furthermore, the previous studies have not focused on trust restoration and assessed causes and effects of trust based on trust at one point in time i.e. trust after recovery. While this study has included restored trust as a variable in the conceptual model.

Propósito

Esta investigación tiene como objetivo comparar la importancia relativa de la compensación tangible en los medios de servicio offline y online, y evaluar la compensación tangible como táctica de recuperación de la confianza.

Metodología

Este estudio se basa en un diseño experimental basado en 3 (nivel de compensación: 20%, 50%, 100%) x 2 (tipo de compensación: reembolso, cupón) x 2 (medio de servicio: offline, online).

Conclusiones

Los clientes offline y online muestran una satisfacción diferente para los valores respectivos de los tipos de compensación inmediata y diferida. Además, los clientes offline muestran más confianza en la empresa cuando reciben un reembolso, mientras que sus homólogos online demuestran una mayor confianza cuando se les proporciona un cupón.

Implicaciones prácticas

Para un fallo del servicio como el presentado en el escenario del estudio experimental, un cupón de menor (mayor) valor generará más (menos) satisfacción en comparación con proporcionar el mismo valor como reembolso. Las empresas saldrán ganando si ofrecen una compensación parcial en forma de cupón, en lugar de un reembolso.

Originalidad

A diferencia de la mayoría de los estudios sobre la recuperación de servicios, esta investigación tiene en cuenta las diferencias percibidas de varias compensaciones tangibles para ofrecer una comparación de las preferencias de recuperación de los clientes offline y online. Además, los estudios anteriores no se han centrado en el restablecimiento de la confianza y han evaluado las causas y los efectos de la confianza basándose en la confianza en un momento determinado, es decir, la confianza después de la recuperación. En cambio, este estudio ha incluido la confianza restaurada como una variable en el modelo conceptual.

目的

本研究旨在比较有形补偿在离线和在线服务媒介中的相对重要性, 并评估有形补偿作为一种信任恢复策略。

方法

本研究基于3(补偿水平:20%, 50%, 100%)×2(补偿类型:退款, 优惠券)×2(服务媒介:线下, 线上)的情景实验设计。

研究结果

线下和线上的顾客对即时和延迟补偿类型的各自数值表现出不同的满意度。此外, 离线顾客在收到退款时表现出对公司的更多信任, 而他们的在线顾客在得到优惠券时表现出更多的信任。

实际意义

对于像实验研究中提出的那种服务失败, 与提供相同价值的退款相比, 价值较低(较高)的优惠券会产生更多(更少)的满意度。企业通过以优惠券的形式提供部分补偿, 而不是退款, 会有更好的效果。

原创性

与大多数关于服务恢复的研究不同, 这项研究考虑到了各种有形补偿的感知差异, 以提供离线和在线顾客恢复偏好的比较。此外, 以前的研究没有关注信任的恢复, 而是基于一个时间点的信任, 即恢复后的信任来评估信任的原因和影响。而本研究将恢复的信任作为概念模型中的一个变 量。

Article
Publication date: 1 December 2006

Anna S. Mattila

To examine the role of explanations in influencing customer perceptions of service failures, this study investigated the impact of two types of explanations: retrospective…

2296

Abstract

Purpose

To examine the role of explanations in influencing customer perceptions of service failures, this study investigated the impact of two types of explanations: retrospective excuses and anticipatory excuses on customers' fairness perceptions and their tipping behaviors.

Design/methodology/approach

A 3 (explanation: absent, anticipatory, retrospective) × 2 (service recovery effort: no tangible compensation or 20 percent off the total bill) between‐participant design was used to test the hypotheses. Simulated dining experiences were enacted and videotaped to represent the six conditions.

Findings

The findings of this study imply that customer‐contact employees might be able to influence customer impressions by offering a causal explanation for a service failure.

Research limitations/implications

Owing to the restaurant‐oriented focus of this study, these results may not be generalizable to other service industries. Second, our stimuli involved service encounters that were clearly inadequate in terms of interactional treatment. Third, due to the research method employed in this study the dyadic nature of the service encounter is minimized. Fourth, the student sample somewhat limits the generalizability of the results.

Practical implications

The results indicate that retrospective excuses might enhance customers' fairness perceptions more than anticipatory excuses. Yet, it is important to keep in mind that explanations for failures, even when combined with tangible compensation, are poor substitutes for inadequate interpersonal treatment.

Originality/value

The findings of this study add to the evidence that offering an explanation for a service failure can positively influence customer perceptions. Moreover, the paper introduces tipping as a surrogate of satisfaction to the service recovery literature.

Details

Journal of Services Marketing, vol. 20 no. 7
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 1 April 2001

Howard Marmorstein, Dan Sarel and Walfried M. Lassar

After investing in service quality improvement programs, firms may realize that they still face a daunting challenge: How should they persuade consumers that service has…

2215

Abstract

After investing in service quality improvement programs, firms may realize that they still face a daunting challenge: How should they persuade consumers that service has actually improved? One way of attempting to persuade consumers is to offer a service guarantee. But are guarantees credible? Are they really effective? Can they overcome consumers’ prior negative experience? Surprisingly, the topic has received very little attention. This paper provides a conceptual and an empirical examination of the persuasive power of service guarantees. Specifically, the effects of service process evidence, compensation and prior beliefs about the service provider, are examined. The experimental data indicate that the inclusion of service process evidence significantly increases consumers’ willingness to try the provider. The findings also suggest that compensation is more persuasive when service process evidence is specified in the guarantee. The synergy of presenting service process evidence and high compensation, is able to overcome consumers’ prior (negative) exposure. Overall, the study supports the conclusion that consumers are primarily interested in service reliability and only secondarily in compensation for service failures. Managerial implications of the findings are discussed.

Details

Journal of Services Marketing, vol. 15 no. 2
Type: Research Article
ISSN: 0887-6045

Keywords

Open Access
Article
Publication date: 17 June 2020

Alice Medioli, Stefano Azzali and Tatiana Mazza

Although tax-motivated income shifting has been widely explored, no studies have as yet analyzed the association between ownership structure and management decisions about…

Abstract

Purpose

Although tax-motivated income shifting has been widely explored, no studies have as yet analyzed the association between ownership structure and management decisions about income shifting. The ownership structure of multinational groups is characterized by different levels of minority interests, and our aim is to establish whether income shifting is explained by the aim of expropriation of minorities, as well as taxation avoidance.

Design/methodology/approach

We collect data on a sample of European parent companies located in five countries and their foreign subsidiaries, and run a multivariate regression based on the Huizinga and Laeven (2008) model.

Findings

Our results support the idea of minority expropriation, finding evidence of ownership-motivated income shifting. We also find that the level of minority protection affects ownership-motivated income shifting, and that, when both are present, expropriation is statistically significant.

Research limitations/implications

Although the study looks at a wide range of subsidiaries, a limitation may be that it examines only firms having parent companies in five European countries. Further research would overcome this limitation and extend the literature and take into account other income-shifting contextual variables. Our results may lead regulators to pay more attention to the protection of minority interests.

Practical implications

This research offers insights to companies and investors, and should help them to make better-informed decisions and evaluate the best contexts for investments.

Originality/value

This study enriches the literature on income shifting by revealing that it can be caused by factors other than the desire to avoid taxation. It suggests that ownership structure is crucial.

Details

Management Decision, vol. 58 no. 12
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 10 August 2015

Silke Bambauer-Sachse and Landisoa Eunorphie Rabeson

The purpose of this study is to determine which level of tangible compensation for a service failure leads to high levels of customer satisfaction for moderate- versus…

2961

Abstract

Purpose

The purpose of this study is to determine which level of tangible compensation for a service failure leads to high levels of customer satisfaction for moderate- versus high-involvement services as well as for different conditions of responsibility for the failure and failure severity.

Design/methodology/approach

The study is based on a 4 (tangible compensation: gift, discount, credit for future consumption, refund) × 2 (responsibility for the failure: restaurant vs customer) × 2 (failure severity: low vs high) × 2 (involvement: moderate vs high) design using scenarios in a restaurant context.

Findings

The results reveal that, for moderate-involvement services, all types of compensation are equally appropriate, except for when customers are responsible for a severe failure. In this condition, they expect tangible compensation of higher benefit. For high-involvement services, the more severe the failure, the higher the benefit of tangible compensation should be, independent of responsibility.

Practical implications

The findings suggest that managers should consider the level of service involvement as well as responsibility for and severity of the failure when choosing the level of tangible compensation.

Originality/value

The results of this study provide new insights into how to choose appropriate and efficient service recovery measures.

Details

Journal of Services Marketing, vol. 29 no. 5
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 26 April 2011

Wen‐Hsien Huang and Tzu‐Da Lin

The purpose of this paper is to gain some insight into the effectiveness of different types of tangible compensation strategies for two different types of services…

3808

Abstract

Purpose

The purpose of this paper is to gain some insight into the effectiveness of different types of tangible compensation strategies for two different types of services: utilitarian and hedonic.

Design/methodology/approach

The hypotheses are investigated using a 2×2 between‐subject experimental design and two factors: service type (utilitarian vs hedonic) and compensation type (utilitarian – a price reduction vs hedonic – a free gift).

Findings

The results show that customers prefer to receive a form of compensation that matches the type of service involved. For example, customers who receive a utilitarian compensation (e.g. a price reduction) after experiencing a failure in utilitarian service (e.g. at a bank) report higher levels of satisfaction and repurchase intention than they would after experiencing a failure in hedonic services (e.g. at a restaurant), but that the reverse is true for a hedonic‐type compensation (e.g. a free gift).

Practical implications

The offering of either a price reduction or a free gift cuts into company profits. Organizations should, therefore, tailor their service recovery efforts, focusing on those resources in the bundle that will have the greatest positive impact and create the most favorable customer response.

Originality/value

The primary contribution of this paper to the service marketing literature is that it provides empirical results, which shed light on the interplay between the type of compensation and the type of service on the customer's post‐recovery judgment of that service.

Details

Journal of Service Management, vol. 22 no. 2
Type: Research Article
ISSN: 1757-5818

Keywords

Article
Publication date: 6 June 2022

Marie-Julie De Bruyne and Katrien Verleye

Today's sharing economy covers a variety of business models. This research aims to (1) identify dimensions along which sharing businesses may vary and (2) investigate how…

Abstract

Purpose

Today's sharing economy covers a variety of business models. This research aims to (1) identify dimensions along which sharing businesses may vary and (2) investigate how these dimensions influence consumer engagement while considering consumers' sustainability orientation.

Design/methodology/approach

This research relies upon a systematic literature review (n = 67 articles) to identify five sharing business dimensions: (1) ownership transfer, (2) professional involvement, (3) compensation, (4) digitalization and (5) community scope. A discrete choice conjoint experiment in the fashion industry is employed to investigate how these dimensions affect consumer engagement with sharing businesses (n = 383 participants).

Findings

The results suggest that ownership of tangible resources elicits more engagement than access to tangible resources for both consumers with a low sustainability orientation and consumers with a high sustainability orientation. Community scope also affects consumer engagement as reflected in more engagement towards sharing businesses with a local rather than a global scope. The presence of professional service providers, monetary compensation and a digital platform only induces engagement among consumers with a low sustainability orientation.

Originality/value

This research generates a better understanding of how sharing businesses can draw on business dimensions to engage consumers with different levels of sustainability orientation and, in turn, how sharing businesses can realize their economic and/or circular potential.

Details

Journal of Service Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-5818

Keywords

Article
Publication date: 1 August 2005

Anna S. Mattila and David Cranage

The paper proposes introducing a new antecedent to service recovery – that is customers' choice over some components of the service delivery process. The authors also…

5952

Abstract

Purpose

The paper proposes introducing a new antecedent to service recovery – that is customers' choice over some components of the service delivery process. The authors also examined the interactive effects of tangible compensation and apology on perceived fairness in a context of restaurant services.

Design/methodology/approach

A 2 (choice) × 2 (compensation) × 2 (apology) between‐subjects design was used to test the hypotheses. Subjects were exposed to a written scenario describing a restaurant experience. A total of 280 undergraduate students served as the subject pool.

Findings

The study results indicate that choice, compensation and apology jointly influence customers' perceptions of informational fairness. The combined effects of apology and compensation were observed for interactional fairness, whereas only main effects were found for distributive justice. Finally, the findings suggest that the four facets of justice (distributive, procedural, interactive, and informational) are highly linked to post‐recovery satisfaction.

Research limitations/implications

Several limitations regarding this research should be kept in mind. First, students served as the sample pool for this investigation. Although the choice of students somewhat limits the generalizability of the results, the behaviors and responses of students and other market segments are likely to be more similar than different in service recovery incidents. Second, the manipulations involved absence and presence of three service recovery attributes (choice/no choice; compensation/no compensation, and apology/no apology). Consequently, different levels of these attributes might produce differential responses.

Practical implications

The findings of this study highlight the benefits of a proactive management of the service recovery process.

Originality/value

This research sheds some light on the role of choice in customer perceptions of service recovery processes. It also introduces a fourth dimension of justice – informational justice – to the service recovery literature.

Details

Journal of Services Marketing, vol. 19 no. 5
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 1 December 2001

Anna S. Mattila

In today’s hyper‐competitive business environment, repeat customers are vital for success. Service failures, however, have the potential to destroy customer loyalty. In…

9201

Abstract

In today’s hyper‐competitive business environment, repeat customers are vital for success. Service failures, however, have the potential to destroy customer loyalty. In this study, we wanted to examine how two situational factors, the service type and magnitude of failure, moderate customer responses to service failures. Results from our experimental study indicate that the cost to mollify customers might vary tremendously for different types of services and for different magnitudes of failure. Effective service recovery (e.g. apology combined with a tangible compensation) had a strong positive influence on recovery satisfaction and loyalty for hair styling services whereas the magnitude of the impact was less pronounced for restaurants and dry‐cleaning services. Consistent with previous research, subjects who perceived the failure to be highly serious had lower perceptions of fairness or justice associated with service recovery than their counterparts who considered the failure to be less severe. In sum, our findings support the notion of context‐specificity of service recovery.

Details

Journal of Services Marketing, vol. 15 no. 7
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 27 April 2010

Wen‐Hsien Huang

The purpose of this paper is to explore how the organizational recovery response to other‐customer failure influences the affected customer's level of satisfaction…

3397

Abstract

Purpose

The purpose of this paper is to explore how the organizational recovery response to other‐customer failure influences the affected customer's level of satisfaction, unfavorable word‐of‐mouth (WOM), and repurchase intentions toward the firm.

Design/methodology/approach

Two experimental studies: 2 (complaint versus no complaint)×3 (employee effort (EE): high versus low versus no)×2 (compensation versus no compensation) were used to test the research hypotheses in a restaurant context.

Findings

In cases of other‐customer failure, the outcome valence (failure discontinues versus continues) influences how complainants and non‐complainants rate their perceptions of satisfaction and subsequent behavioral intentions toward the firm. Customers who perceive that there has been good EE made to help solve the problem of other‐customer failure give higher service evaluations than those who perceive little or no EE. Additionally, there are insignificant differences in the rating of satisfaction, repurchase intention, or negative WOM from customers in the latter group. Offering compensation is not a cure‐all. It has the strongest effect on non‐complainants in the low EE scenario.

Practical implications

Service managers need to design well‐balanced organizational recovery systems in terms of the outcome of recovery (i.e. compensation) and the way in which the recovery process is delivered (i.e. EE) to the affected customers in response to other‐customer failures. Since the influence of compensation on service evaluations is largely dependent on customer perceptions of employee‐effort, providing employees with the appropriate problem‐solving skills for working with both problem‐causing customers and the problem‐affected customers is a key issue for service marketers in cases of other‐customer failure.

Originality/value

The paper examines the importance of the as yet under‐researched issue of how organizational recovery responses to other‐customer failure influence a customer's service evaluations of the firm.

Details

Journal of Service Management, vol. 21 no. 2
Type: Research Article
ISSN: 1757-5818

Keywords

1 – 10 of over 4000