Managing online service recovery: procedures, justice and customer satisfaction

Abstract

Structured Abstract PurposeThe Internet has changed the way services are delivered and has created new forms of customer-firm interactions. Whilst online service failures remain inevitable, the Internet offers opportunities for delivering efficient service recovery through the online channel. Notwithstanding, research evidence on how firms can deliver online service recovery remains scarce. This study investigates the impact of two online service recovery strategies -online information and technology-mediated communication -on customer satisfaction, switching and word-of-mouth intentions. Design/methodology/approachA scenario-based experiment is employed. Data are analysed using partial least squares structural equation modeling (PLS-SEM). FindingsOnline information and technology-mediated interactions can be used as online service recovery strategies. When fair, online service recovery can restore customer satisfaction, lower switching and enhance positive word-of-mouth. Interactional justice delivered through technology-mediated communication is a strong predictor of satisfaction with online service recovery. Yet, customers in subscription services show greater expectations of online service recovery than those in non-subscription services. Research limitations/implicationsFurther research could examine the impact of online service recovery on relational constructs, such as trust. Since customers participate in the online recovery process, future research could investigate the role of customers as co-creators of online service recovery. Practical implicationsService managers should design online recovery strategies that meet customer need for interactional justice, for example, bespoke emails, and virtual chat communications showing genuine customer care. Originality/valueOnline information and technology-mediated communication function as online service recovery strategies. Customer perceptions of justice towards online service recovery restore satisfaction, and encourage loyal behaviour.

An Empirical Study on Service Recovery Satisfaction in an Open and Distance Learning Higher Education Institution in Malaysia

“…Therefore, this study has narrowed the boundary of the generalizability of past studies in terms of procedural and interpersonal justice. The results also show that the procedural and interpersonal justice of OUM will affect the level of the student service recovery satisfaction, consistent with previous studies in service recovery setting such as Pai (2015) and, Singh and Crisafulli (2016).…”

Service failures in e-retailing: Examining the effects of response time, compensation, and service criticality

“…Extant research recognizes the relevance of justice as a cognitive mechanism for explaining how service recovery influences customer attitudes and behavioral intentions (e.g., Chebat & Slusarczyk, 2005;Smith et al, 1999;Tax et al, 1998). Studies incorporating the justice framework, however, apply only to offline service contexts, barring a few recent exceptions that examine the above issues in an online service context (e.g., Lin, Wang, & Chang, 2011;Singh & Crisafulli, 2016). In general, prior studies in the online context include typologies of online service failures (Forbes, Kelley, & Hoffman, 2005;Holloway & Beatty, 2003), the role of contingency factors to customer perceptions of online service failures such as cumulative online purchase experience (Holloway, Wang, & Parish, 2005), customer-employee familiarity (Pizzutti & Fernandes, 2010), and comparisons of customer responses to offline versus online failure encounters (Harris, Grewal, Mohr, & Bernhardt, 2006).…”

“…Further, the onlinr context under investigation can explain why a necessary delay in the process of recovery can lead to positive customer outcomes. When online services fail, customers typically lodge a complaint by email, phone or live chat features on websites (Singh & Crisafulli, 2016). In order to handle the complaint, firms often need to investigate the service breakdown.…”

“…Notwithstanding, evidence on the optimal level of financial compensation remains sparse. Despite the prevalent belief that financial compensation leads to customer satisfaction, there is evidence suggesting that the marginal utility of financial compensation diminishes as its size increases, and accordingly, overcompensation is unnecessary and detrimental to firms (Crisafulli & Singh, 2016;Gelbrich & Roschk, 2011). Importantly, as a recovery strategy, financial compensation is often not perceived favorably by the firms due to the associated costs.…”

“…Whilst experiencing a rapid growth, e-retailing is prone to service failures. Within the online retail setting new forms of service failures have emerged, including issues related to privacy, security, on-time delivery of online orders and ease of navigation (Holloway & Beatty, 2003;Singh & Crisafulli, 2016). E-retailing, therefore, represents a highly pertinent context for the study of service recovery overall, and recovery processing time in particular.…”