The effect of complete versus partial observations on service evaluations

Abstract

Purpose The purpose of this paper is to investigate the effect of complete versus partial observations of service failure and recovery. This study also aims at investigating the effect of observing customers’ need for cognitive closure and types of compensation that a service provider offers. Design/methodology/approach Two experiments are conducted to test the research hypotheses. The authors use scenarios describing failure and recovery encounters that occur to a target customer at restaurant settings, and through manipulation of complete versus partial observations, they investigate observers’ attitudes and behavioral intentions. Findings The results suggest that customers with a partial observation are less forgiving than those with a complete observation. In particular, the former sympathized more with a target customer, blamed a service provider more and a target customer less and had lower repurchase intentions than the latter. The authors find that the need for cognitive closure heightens this tendency following a partial observation of service failure. They also find that following a complete (versus partial) observation, observers reacted more favorably to service recovery when it included (versus did not include) monetary compensation. Research limitations/implications This research studies the effect of locus of causality following a partial versus complete observation. Future research could further examine the effect of stability and controllability. Also, the authors examined the effect of the need for cognitive closure on evaluations of service failure following a partial versus complete observation. Future research could examine the effect of some other individual difference variables. Practical implications The results offer some measures to be taken by practitioners. In particular, practitioners are advised to not offer monetary compensation when majority of observers have had a partial observation. Moreover, they are advised to offer some explanation in a timely and effective manner to ensure observers who are under the negative impact of a partial observation have some information so that they revisit their service evaluations. Originality/value The literature assumes that in failure and recovery incidents, all observing customers would know the entire story. This research challenges this assumption and highlights the key role of observation type (partial versus complete observation). Further, this research examines the effect of the need for cognitive closure on service evaluations following a partial versus complete observation. The current research finds that supposedly favorable measures by a firm (i.e. monetary compensation) may in fact backfire when a partial observation is at play.