Bad Intentions: Customers’ Negative Reactions to Intentional Failures and Mitigating Conditions

Abstract

Intentional service failures (e.g., overbooking or overcharging) have received little scholarly attention, despite their regular occurrence and immense costs. Using a multi-method approach combining experimental and field data from online reviews, it was found that intentional (vs. unintentional) failures lead to greater negative word of mouth (nWOM) and patronage reduction. This research extends these findings by demonstrating that intentional failures are less harmful when the failure is reversible (vs. irreversible) and occurs at an employee (vs. firm) level. Further, while either psychological (e.g., apology) or monetary compensation is effective in mitigating the consequences of intentional failures at an employee level, a combined service recovery (psychological and monetary) is the best solution when the failure is at a firm level. Drawing on attribution theory, the article unveils the key role of trust (as opposed to justice) as the mechanism to explain the effects of intentionality on customers’ nWOM and patronage reduction.