Developing a comprehensive picture of service failure

Abstract

Much attention has been paid recently to the concept of service failure. In light of this, the paper develops a model of the potential outcomes from service failure. Results are utilised from interviews with business banking customers who have recently encountered a service failure. The results show that service recovery is only one of the reasons a customer may stay or exit a service organisation after a service failure. Other factors, such as barriers to exit and loyalty, are just as prevalent in the decision‐making process. A model ofservice failure, which was generated through the results of the research, is presented in the discussion section of the paper.