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Consumer responses to compensation, speed of recovery and apology after a service failure
Abstract
This experimental study examined how the three dimensions of fairness (distributive, procedural and interactional) influence consumers' attributional processes, their post‐recovery satisfaction and behavioral responses (repatronage intent and negative word‐of‐mouth) in a service failure context that does not involve monetary costs to the consumer. Our results indicate that recovery outcomes (e.g. compensation), procedures (e.g. speed of recovery) and interactional treatment (e.g. apology) have a joint effect on post‐recovery satisfaction. Specifically, our findings suggest that compensation may not enhance satisfaction when the recovery process is well‐executed (an immediate response combined with an apology). Similarly, compensation failed to lessen dissatisfaction with a poor recovery process (a delayed response without apology). It thus seems that compensation is a poor substitute for a good recovery process. However, offering compensation was effective in increasing satisfaction in mixed‐bag recovery situations (delayed recovery with an apology, or immediate recovery without apology). Furthermore, we found that service recovery satisfaction acted as a full mediator between service recovery attributes (compensation, recovery speed and apology) and behavioral intentions (repurchase intent and negative WOM). Finally, our findings suggest that consumer attributions for stability and controllability for the failure vary across recovery efforts. Managerial implications for these findings are discussed.
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“It is also demonstrated that post-complaint satisfaction partly mediates the relationship between justice perceptions and customer behavioral intentions (Maxham III and Netemeyer 2002) and completely mediates the relationship between organizational responses and customer behavioral intentions (Wirtz and Mattila 2004).”
From A Meta-Analysis of Organizational Complaint Handling and Customer Responses (2011) · cites this paper as Wirtz and Mattila 2004
In the citing paper
“It is also demonstrated that post-complaint satisfaction partly mediates the relationship between justice perceptions and customer behavioral intentions (Maxham III and Netemeyer 2002) and completely mediates the relationship between organizational responses and customer behavioral intentions (Wirtz and Mattila 2004).”
From A Meta-Analysis of Organizational Complaint Handling and Customer Responses (2011) · cites this paper as Wirtz and Mattila 2004
In the citing paper
“and satisfaction (Mattila, Cho, and Ro 2009; Wirtz and Mattila 2004)”
From A Meta-Analysis of Organizational Complaint Handling and Customer Responses (2011) · cites this paper as Wirtz and Mattila 2004
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“Though response satisfaction has been found to mediate the impact of justice on outcomes in previous studies (Kim et al., 2009; Wirtz & Mattila, 2004), the same was not true in our investigation.”
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“Conversely, Wirtz and Mattila (2004) argue that compensation may neither alleviate the effects of a poor recovery effort nor increase the levels of satisfaction when a good recov ry process has taken place.”
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“This is congruent with the existing literature (e.g. Maxham and Netemeyer 2002; Wirtz and Mattila 2004) on service recovery, which states that satisfaction mediates the positive impact of justice perceptions on repurchase intentions and the intention to engage in word of mouth.”
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“…would be foolish to rely solely on guarantee compensation to recover from a service failure (Björlin-Lidén and Skålén, 2003; Davidow, 2003; Wirtz and Mattila, 2004); consumers will continue to be dissatisfied if the problem that caused the dissatisfaction remains unresolved (Boshoff and…”
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“These findings have not been found previously, because in much past work, the focus for service recovery has been on the relative importance of the three justice dimensions (distributive, procedural, and interactional) and their influence on customer service evaluations (Blodgett et al., 1997; Goodwin and Ross, 1992;…”
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“The results show that monetary compensation is a powerful instrument to restore customers’ perceived loss and contribute to the restoration of satisfaction after a service failure; an effect already found in private settings (e.g., Wirtz and Mattila 2004) and now confirmed in public settings.”
Glikson, E., Rees, L. L., Wirtz, J., Kopelman, S., & Rafaeli, A. (2019) · Journal of Service Research · doi:10.1177/1094670519838623 · Cited by 37
Self-citationKim, Y. S., & Baker, M. A. (2019) · Cornell Hospitality Quarterly · doi:10.1177/1938965519857539 · Cited by 36
“…the tangible compensation condition, the hotel offered an additional 20% off discount meal coupon, whereas in the absence of the tangible compensation condition, there was no additional material benefit based on manipulations from previous studies (Roschk & Gelbrich, 2017; Wirtz & Mattila, 2004).”
BackgroundMethodInvestigating the Key Routes to Customers’ Delightful Moments in the Hotel Context
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“Prompt and appropriate service recovery strategies are critical to meet customers’ expectations and provide the opportunity to delight them when service failure occurs (Wirtz & Mattila, 2004).”
BackgroundRETRACTED: Online Consumer Complaints About Southeast Asian Luxury Hotels
Memarzadeh, F., & Chang, H. J. (2014) · Journal of Hospitality Marketing & Management · doi:10.1080/19368623.2014.893222 · Cited by 36
“Hoteliers should reduce service failures by carefully choosing staff members (Wirtz & Mattila, 2004).”
BackgroundRetractedSchweiggart, N., Shah, A. M., Qayyum, A., & Jamil, R. A. (2025) · Asia Pacific Journal of Tourism Research · doi:10.1080/10941665.2025.2471492 · Cited by 43
“Moreover, adopting apology-based communication models can help repair reputational damage and restore social harmony (Wirtz & Mattila, 2004).”
The Unintended Consequence of Price-Based Service Recovery Incentives
Kanuri, V. K., & Andrews, M. (2019) · Journal of Marketing · doi:10.1177/0022242919859325 · Cited by 37
“Moreover, boundary conditions of recovery compensation have primarily been examined using short-term attitudes such as customer attributions of failure or customer expectations of recovery (Hess, Ganesan, and Klein 2003; Wirtz and Mattila 2004).”
BackgroundThe value disruption of uncivil other-customers during online service recovery
Bacile, T. J., Krallman, A., Wolter, J. S., & Beachum, N. D. (2020) · Journal of Services Marketing · doi:10.1108/jsm-05-2019-0209 · Cited by 37
Wu, L. L., Liu, S. Q., Ma, S., & Hanks, L. (2022) · International Journal of Contemporary Hospitality Management · doi:10.1108/ijchm-12-2021-1559 · Cited by 37
Lii, Y., Chien, C. S., Pant, A., & Lee, M. (2013) · Journal of Applied Social Psychology · doi:10.1111/jasp.12077 · Cited by 38
Service recovery: a naturalistic decision‐making approach
Thwaites, E., & Williams, C. S. (2006) · Managing Service Quality · doi:10.1108/09604520610711945 · Cited by 35
“But this might not be the case – for example, transport delays caused by bad weather (Wirtz and Mattila, 2004).”
BackgroundDoes delaying service-failure resolution ever make sense?
Zhou, Y., Tsang, A. S. L., Huang, M., & Zhou, N. (2012) · Journal of Business Research · doi:10.1016/j.jbusres.2012.10.009 · Cited by 35
Discount reference moderates customers' reactions to discount frames after online service failure
Sharifi, S., & Aghazadeh, H. (2016) · Journal of Business Research · doi:10.1016/j.jbusres.2016.03.044 · Cited by 35
Yoo, J. W., Park, J., & Park, H. (2024) · Heliyon · doi:10.1016/j.heliyon.2024.e36392 · Cited by 54
“Several studies concluded that a timely response to customer complaints and queries are effective at restoring customer satisfaction positive word-of-mouth and consequently, the firm ’ s customer interaction management capability and win-back capability [80 – 82].”
BackgroundArsenovic, J. F., Edvardsson, B., Otterbring, T., & Tronvoll, B. (2022) · Marketing Letters · doi:10.1007/s11002-021-09611-6 · Cited by 34
“…have shown it to be effective if performed under the right conditions, depending on who is responsible for the problem and the effectiveness of the recovery procedure, including how long after the failure the customer is reimbursed (Grewal et al., 2008; Hogreve et al., 2017; Wirtz & Mattila, 2004).”
BackgroundDelicate Snowflakes and Broken Bonds: A Conceptualization of Consumption-Based Offense
Liu, P. J., Lamberton, C. P., Bettman, J. R., & Fitzsimons, G. J. (2018) · Journal of Consumer Research · doi:10.1093/jcr/ucy051 · Cited by 34
Mapping the service recovery research landscape: A bibliometric‐based systematic review
Mir, M., Ashraf, R., Syed, T. A., Ali, S., & Nawaz, R. (2023) · Psychology and Marketing · doi:10.1002/mar.21864 · Cited by 48
Trapped in a service encounter
Fließ, S., & Volkers, M. (2019) · Journal of service management · doi:10.1108/josm-01-2019-0013 · Cited by 34
Roschk, H., Müller, J., & Gelbrich, K. (2012) · Journal of Retailing and Consumer Services · doi:10.1016/j.jretconser.2012.11.002 · Cited by 33
Nikbin, D., Armesh, H., Heydari, A., & Jalalkamali, M. (2011) · Siti Hasmah Digital Library-MMU Institutiona Repository (Multimedia University) · doi:10.5897/ajbm10.1444 · Cited by 33
“Previous literature in service recovery have measured distributive justice by the “justice,” “fairness,” “need,” “value” and “reward” of outcomes (Chebat and Slusarczyk, 2005; Smith et al., 1999; Wirtz and Mattila, 2004).”
Metadata
- Authors
- Wirtz, J., & Mattila, A. S.
- Affiliations
- National University of Singapore (SG)
- Pennsylvania State University (US)
- Venue
- International Journal of Service Industry Management
- Publisher
- Emerald
- Published
- 2004-04-01
- Volume
- 15
- Issue
- 2
- Pages
- 150-166
- ISSN
- 0956-4233 (ISSN-L)
- OpenAlex
- W2062193161
- Cited by
- 725
- References
- 51
- Citations by year
- 2026: 26 · 2025: 32 · 2024: 36 · 2023: 41 · 2022: 41 · 2021: 47 · 2020: 58 · 2019: 54 · 2018: 35 · 2017: 37 · 2016: 33 · 2015: 40 · 2014: 41 · 2013: 36 · 2012: 39
- FWCI
- 21.64
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- International Journal of Service Industry Management (publishedVersion)
- National University of Singapore (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Customer Service Quality and Loyalty
- Social Sciences › Business, Management and Accounting › Marketing › Service and Product Innovation
- Social Sciences › Business, Management and Accounting › Marketing › AI in Service Interactions
- Keywords
- service failure, service recovery, compensation, recovery speed, apology, distributive fairness, procedural justice, interactional justice, consumer attributions, post-recovery satisfaction, repurchase intention, negative word-of-mouth, consumer behavior
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