The Role of Regulation and Financial Compensation on Trust Recovery

Abstract

Although service recovery tactics have been extensively investigated, little is known about what firms should do when service recovery fails (i.e., double deviation). It is primordial to understand whether and how customer trust may be recovered after a double deviation. The results of an experimental study show that it is possible to recover customer trust through improvements in organizational processes (i.e., regulation) and discounts (i.e., financial compensation). Remarkably, regulation and financial compensation lead to similar trust levels, which means that these trust recovery tactics are equally successful. Moreover, attributions of benevolence explain why regulation and financial compensation can recover customer trust after a double deviation.

The Burden of Double Deviation in Services: A Systematic Review and Research Agenda

“…This is used only in double service recovery and has not been discussed in single deviation literature (e.g., written, managerial apology). While Basso and Pizzutti (2016), Gasparotto et al (2018), Pacheco et al (2019) and Joireman et al (2013) insisted on using recovery strategies similar to those in single service failures, but with higher magnitude (e.g., higher financial compensation, quicker front‐line apology), Johnston and Fern (1999) and Edvardsson et al (2011) advocated the use of exclusive double recovery strategies, such as managerial apology, written assurance and written explanation to accomplish a successful recovery. Joireman et al (2013), considered the joint effects of multiple recovery strategies during double service recovery, but most works have studied the isolated effect of recovery strategies despite firms' actual use of multiple recovery strategies.…”

“…Another similarity is that successful service recovery has been interpreted diversely. Restoration of trust (Basso & Pizzutti, 2016; Gasparotto et al, 2018; Pacheco et al, 2019), change in customer perceptions (Edvardsson et al, 2011; Joireman et al, 2013), satisfaction and loyalty (Räikkönen & Honkanen, 2016) are the various consequences signalling a successful double service recovery.…”

The moderating role of complaint handling on brand hate in the cancel culture

“…Customers spread negative views to other people against the company when customers are dissatisfied with the company's services (Hornik et al, 2015;Shobeiri et al, 2014). It is believed that in facing a service failure, the customer's trust could be regained with the help of a complaint handling unit that aims at solving quality issues, and customer complaints (Gasparotto et al, 2018;Oentoro et al, 2016;Olaleye et al, 2019;Tan et al, 2021). Handling customer complaints appropriately provides companies with a chance to solve the customer problem and turn the service failure into a successful encounter by satisfying the customer (Jeon and Kim, 2016;Oentoro et al, 2016;Rasheed Gaber et al, 2019;Rialti et al, 2017).…”

“…, 2014). It is believed that in facing a service failure, the customer's trust could be regained with the help of a complaint handling unit that aims at solving quality issues, and customer complaints (Gasparotto et al. , 2018; Oentoro et al.…”

Pengaruh Pemberdayaan Struktural Dan Kebijakan Tunjangan Kinerja Terhadap Akuntabilitas Kinerja Pegawai Pada Kantor BPKD Pemerintah Kabupaten Wonogiri

“…Pertanggungjawaban pemerintah daerah yang akuntabel diatur dalam Peraturan Presiden Republik Indonesia (Perpres) nomor 29 tahun 2014 mengenai Sistem Akuntabilitas Kinerja Instansi Pemerintahan. Perpres tersebut mencanangkan keharusan instansi pemerintahan untuk membertanggunjawabkan kinerja melalui program pembangunan daerah yang terukur, sistematis dan terstruktur, serta memberikan kepastian pelaksanaan penggunaan angaran tepat sasaran, transparan, akuntabel dan auditabel (Febrianti & Yuhertiana, 2021); (Gasparotto et al, 2018).…”