The authors report a repeated measures field study that captures complaining customers' perceptions of their overall satisfaction with the firm, likelihood of word-of-mouth recommendations, and repurchase intent during a 20-month span that includes two service failures and recovery attempts. The findings suggest that though satisfactory recoveries can produce a “recovery paradox” after one failure, they do not trigger such paradoxical increases after two failures. Furthermore, “double deviations” can occur following two consecutive unsatisfactory recoveries or following an unsatisfactory recovery in response to a second failure. The findings indicate that customers reporting an unsatisfactory recovery followed by a satisfactory recovery reported significantly higher ratings at the second postrecovery period than did customers reporting the opposite recovery sequence. The outcome of the second recovery also demonstrated a significant influence on customer ratings (positively if the recovery was satisfactory, negatively if the recovery was unsatisfactory), regardless of whether the customer found the first recovery satisfactory or unsatisfactory. In addition, although the increased change in recovery expectations and failure severity ratings from the first failure to the second is more dramatic for customers who previously reported a satisfactory recovery, the increase in attributions of blame toward the firm is more pronounced for customers who previously reported an unsatisfactory recovery. Last, the results show that recovery efforts are attenuated when two similar failures occur and when two failures happen in close time proximity.

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It is widely held that a customer-oriented firm is more likely to deliver exceptional service quality and create satisfied customers. However, little research has addressed the question of how the orientation can be disseminated among employees throughout the firm. This dissemination is especially important in service firms in which frontline, customer contact employees are responsible for translating a customer-oriented strategy into quality service. The authors propose a structural model that explains how service firms can disseminate their customer-oriented strategy by aligning the strategy with specific management-and employee-initiated control mechanisms (i.e., formalization, empowerment, behavior-based employee evaluation, and work group socialization) that lead to increased commitment and shared values on the part of customer contact employees. The findings indicate that there are three "corridors of influence" between customer-oriented strategy and shared employee values. The dominant corridor, which focuses on dual (management-and employee-initiated) control, emphasizes the importance of work group socialization and organizational commitment in the dissemination of customer-oriented strategy. A secondary corridor focuses on two management-initiated control mechanisms: formalization and behavior-based evaluation. The final corridor, which focuses on the empowerment of customer contact employees, has a more limited impact than originally hypothesized. The authors discuss implications for the implementation of customer-oriented strategy and the management of customer contact employees, along with several directions for further research.

Employing elements of organizational theory and service recovery research, the authors examine how employees’ perceptions of shared values and organizational justice can stimulate customer-directed extra-role behaviors when handling complaints. They also investigate how these extra-role behaviors affect customers’ perceptions of justice, satisfaction, word of mouth, and purchase intent. The authors capture and match employee and customer perceptions regarding the relevant constructs following a complaint and recovery experience. The results indicate that employees’ perceptions of shared values and organizational justice affect customer-directed extra-role behaviors. Furthermore, the authors find that extra-role behaviors have significant effects on customers’ perceptions of justice and that these behaviors mediate the effects of shared values and organizational justice on customer justice perceptions. Their study reveals that customer ratings of justice affect the customer outcomes of satisfaction with recovery, overall firm satisfaction, purchase intent, and word of mouth. Finally, the authors show that customers’ perceptions of justice mediate the effects that extra-role behaviors have on customer outcomes.

Because customer service employees often represent the sole contact a customer has with a firm, it is important to examine job-related factors that affect customer service employee performance and customer evaluations. In two diverse customer settings, the authors capture matched responses from service employees, supervisors, and customers. The authors use the data to examine the potential chain of effects from customer service employee work-family conflict and family-work conflict, to job stress and job performance, to customer purchase intent (CPI). The results show direct (and indirect) effects of work-family conflict and family-work conflict on service employee customer-directed extra-role performance (CDERP). The results also show direct effects of job stress on service employee in-role performance (IRP) and CDERP and on CPI. Furthermore, the findings show that job stress has a more pronounced effect on IRP than on CDERP and that CDERP has a greater effect on CPI than does IRP. The authors conclude with a discussion of managerial and theoretical implications.

To limit costs associated with product returns, some online retailers have instituted equity-based return shipping policies, requiring customers to pay to return products when retailers determine that customers are at fault. The authors compare the normative assumptions about customers that underlie equity-based return shipping policies with the more realistic, positivist expectations as predicted by attribution, equity, and regret theories. Two longitudinal field studies over four years using two surveys and actual customer spending data indicate that retailer confidence in those normative assumptions is unjustified. Contrary to retailer assumptions, neither the positive consequences of free returns nor the negative consequences of fee returns were reversed when customer perceptions of fairness were taken into account. Depending on the locus and extent of blame, customers who paid for their own return decreased their postreturn spending at that retailer 75%-100% by the end of two years. In contrast, returns that were free to the consumer resulted in postreturn customer spending that was 158%-457% of prereturn spending. The findings suggest that online retailers should either institute a policy of free product returns or, at a minimum, examine their customer data to determine their customers' responses to fee returns.

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