Service recovery for moderate and high involvement services

Abstract

Purpose – The purpose of this study is to determine which level of tangible compensation for a service failure leads to high levels of customer satisfaction for moderate- versus high-involvement services as well as for different conditions of responsibility for the failure and failure severity. Design/methodology/approach – The study is based on a 4 (tangible compensation: gift, discount, credit for future consumption, refund) × 2 (responsibility for the failure: restaurant vs customer) × 2 (failure severity: low vs high) × 2 (involvement: moderate vs high) design using scenarios in a restaurant context. Findings – The results reveal that, for moderate-involvement services, all types of compensation are equally appropriate, except for when customers are responsible for a severe failure. In this condition, they expect tangible compensation of higher benefit. For high-involvement services, the more severe the failure, the higher the benefit of tangible compensation should be, independent of responsibility. Practical implications – The findings suggest that managers should consider the level of service involvement as well as responsibility for and severity of the failure when choosing the level of tangible compensation. Originality/value – The results of this study provide new insights into how to choose appropriate and efficient service recovery measures.