Executive summary of “Satisfaction with service recovery: moderating effect of age in word-of-mouth”

Citation

(2015), "Executive summary of “Satisfaction with service recovery: moderating effect of age in word-of-mouth”", Journal of Consumer Marketing, Vol. 32 No. 6. https://doi.org/10.1108/JCM-09-2015-048

Executive summary of “Satisfaction with service recovery: moderating effect of age in word-of-mouth”

Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 32, Issue 6

This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

Occasional failure is an almost inevitable part of service provision. Notwithstanding this, failure still negatively impacts on relations between provider and customer. The latter becomes discontented and more likely to provide negative word-of-mouth (WOM), voice complaints or look elsewhere.

Given the possibility of such consequences, the importance of service recovery efforts has become acknowledged within an increasing number of studies. Successfully recovering from a service failure favorably impact on subsequent satisfaction, WOM and repeat purchase behavior. The importance attached to WOM recommendations is extensively recognized across the research community. One aspect is its perceived greater credibility compared to a firm’s marketing and advertising activities. Technology development has also increased use of virtual WOM, not least because of the scope to interact with one or many others using a variety of platforms.

Recovery prospects are likelier to be enhanced if the company takes actions, such as, offering an apology or compensating the consumer. Compensation comes in tangible and/or intangible forms reflected by, such as, money or vouchers in the first instance and demonstrating concerns for the individual customer’s needs in the latter.

Research has indicated that many consumers try to ascertain which factors are most responsible for the success or failure of an experience. It has been variously noted that “origin, stability and control” represent the criteria for this process of causal attribution. In a service failure situation, origin or “locus” means determining whether failure is down to internal or external factors. It is deemed internal if customers feel they have caused the problem or external when the firm is seen as responsible. Situational cause is a third possibility and is attributable to third parties or environmental factors. Perceived external causes have been found to significantly impact on satisfaction levels.

Stability relates to consumer belief as to whether the problem will recur. It is stable if deemed likely and unstable or temporary when the customer regards it as being a one-off incident. The more repetitive the problem, the greater the negative impact on satisfaction.

The possibility that the party blamed for the failure has some control over its causes is the essence of the third criterion. Control means that the problem can be prevented, whereas it is labeled uncontrollable if consumers believe that those responsible cannot act to prevent it happening. Satisfaction is harmed most when a firm does not attempt to solve the issue when it is perceived to have the means to do so. On the other hand, any negative impact on satisfaction is usually minimized in situations where companies are considered powerless to act.

When it comes to service recovery efforts, research suggests that certain elements are key. For example, consumers typically evaluate the outcome and the process used to achieve it. Both are therefore regarded as dimensions of service recovery efforts. A fair outcome in terms of suitable compensation is important, along with a “rapid response” and proper explanation from relevant employees. People who perceive that such efforts are being made are likelier to be satisfied with the recovery. This often transpires even in circumstances where the issue has not been properly resolved.

Additional factors are known to influence satisfaction with service recovery efforts. Type of compensation offered, consumer involvement and brand equity are among those noted. How serious the failure is regarded can likewise be significant. In many contexts, different socio-demographic variables have been proved to shape how consumers respond.

Age is an important predictor of consumer behavior. Nevertheless, consideration of age within service recovery situations is to date limited. Greater insight into its significance is needed though, given that aging populations have become the norm in many developed countries. The social changes which occur during an individual’s different life stages are associated with both biological and psychological aging. Loss of cognitive capabilities among older consumers is noted in the literature and is claimed to trigger aversion to change and higher levels of loyalty.

Evidence also points to a connection between age and satisfaction with recovery efforts. Findings in this area are inconclusive though. Certain scholars contend that people become more negative about service failures as they get older and value the recovery process more than the actual outcome. Others have found younger consumers to be more demanding in what they expect a company to do in failure situations. Corresponding differences are evident in how these consumer segments engage with technology, and it is assumed that this will influence their respective tendencies to use conventional and online forms of WOM in the aftermath of service recovery efforts.

Moliner-Velázquez et al. examine these issues further in a study involving 336 shoppers leaving stores in a region of Spain. To participate, subjects had to have recently experienced a service failure in a retail store that included recovery efforts by the company’s employees. Socio-demographic and shopping experience information was also collected.

Data analysis revealed support for findings from previous research in that customer satisfaction with service recovery was:

• negatively influenced when the problem was externally attributed;

• positively affected when the service failure was perceived as temporary; and

• positively influenced when subjects regarded the problem as outside the store’s control.

In addition, customers:

• felt more satisfied when they were positive toward service recovery efforts by the store; and

• were likelier to use conventional and online WOM recommendations when satisfied with service recovery.

Impact was slightly greater for the conventional WOM type. The need to expend more time and effort for e-WOM is cited as a possible explanation for this difference.

The sample was then divided by age into sub-groups, respectively containing members under and over 40 years old. Further examination revealed that older consumers tended more toward conventional WOM and their younger counterparts toward the online form. Exhaustive use of various social media platforms among younger consumers was assumed to explain this inclination. However, satisfaction with service recovery did indicate greater influence on the likelihood of engaging in online WOM among older consumers relative to younger ones. The authors contend that the latter are keen to engage with peers through electronic media, regardless of satisfaction levels.

It was concluded that unstable attribution is the most important antecedent of satisfaction with service recovery. In the opinion of Moliner-Velázquez et al., this suggests that consumers largely believe that stores are responsible for service failures and that they are within the firm’s control. Satisfaction is thus determined in the main by whether the failure is a one-off or will occur again.

Given this finding, store managers are urged to aim for continuous improvement as a means of minimizing the likelihood of ongoing problems. Taking this approach should then persuade consumers that any failure, which does occur, is the result of a specific fault which can be eradicated. It is equally important to design strategies for addressing failures, with a particular emphasis on appropriate compensation and employee explanations. Handling of complaints must also be tailored toward the “adulthood stage” of consumers.

Additional research could extend the work to other cities and use different measures and virtual channels. Scholars might also investigate other key antecedents of satisfaction with service recovery and the moderating effect of consumer characteristics and the purchase situation.

To read the full article enter 10.1108/JCM-12-2014-1251 into your search engine.

(A précis of the article “Satisfaction with service recovery: moderating effect of age in word-of-mouth”. Supplied by Marketing Consultants for Emerald.)