Sharing the Responsibility for Service Failure with Customers: The Effects of Informed Choice and Outcome Foreseeability on Customer Loyalty and Exit

Abstract

Research on service management has been focused on a few strategies for retaining customer loyalty: improving service quality so that customers do not experience failure and recovering from failure, when it does occur. A third strategy is to protect against the ill effects of service failure by preemptive action. This is explored, in the research reported here, through an examination of the effects of giving customers an informed choice. Discovered is that an informed choice causes customers to share responsibility for a service failure and as a result stay more loyal and exit the service relationship less.

Achieving Service Recovery Through Service Innovation: The Critical Role of Employee Empowerment

“…Service failures lead to a damaged relationship between service providers and their customers by reducing customers' perceived values for services (Albus & Ro, 2017). Despite the best of intentions, policies, training and procedures that have been taken, service failures still occur in the service industry (Cranage, Sujan & Godbey, 2005). Thus, it is difficult for organisations to eliminate all service failures and achieve zero defects in the service encounter.…”

Handle with care! How majority cues can reduce the negative effects of warnings of foreseeable product failures

“…Warning given by restaurant staff that meal preparation could take extraordinary long for a special dish; warning that a flight or a hotel might be overbooked Berglas and Jones (1978), Jones and Berglas (1978), Kolditz and Arkin (1982), Baumgardner et al (1985), Crant and Bateman (1993), van Dijk et al (2003), Cranage (2004), Cranage and Sujan (2004), Cranage et al (2005), Bonifield and Cole (2007) and Sparks and Fredline (2007) Third, numerous technical products have to be handled properly to operate without failures. For instance, some products need permanent maintenance services to operate correctly.…”