=Paper=
{{Paper
|id=Vol-2348/short10
|storemode=property
|title=Dealing with Service Failure Smarter: The Critical Role of Customer Voice Management in Service Recovery Process
|pdfUrl=https://ceur-ws.org/Vol-2348/short10.pdf
|volume=Vol-2348
|authors=Phimai Nuansi,Piya Ngamcharoenmongkol
|dblpUrl=https://dblp.org/rec/conf/cerc/NuansiN19
}}
==Dealing with Service Failure Smarter: The Critical Role of Customer Voice Management in Service Recovery Process==
https://ceur-ws.org/Vol-2348/short10.pdf
Business and Society
Dealing with Service Failure Smarter:
The Critical Role of Customer Voice Management in
Service Recovery Process
Phimai Nuansi1[0000-1111-2222-3333] and Piya Ngamcharoenmongkol1[1111-2222-3333-4444]
1
NIDA Business School,
National Institute of Development Administration, Bangkok, Thailand
Abstract. This research builds upon a service recovery framework, establishing
new perspectives of customer voice in service recovery context. Specifically, two
studies were conducted to identify how to turn customer voice to opportunity in
recovering from service failure. The first study employs venting interaction as a
post-failure emotion regulation strategy and tests how it affects customer evalu-
ation of service recovery. Drawing on the role of initiation in the service recovery
process, the second study explores how inviting customers to voice dissatisfac-
tion enhances service recovery evaluations. Two separate scenario-based exper-
iments were carried out in a bank service setting. Partial least squares structural
equation modeling was conducted to test research hypotheses in study 1. Study 2
uses Multivariate analysis of covariance as a statistical technique. As hypothe-
sized, this research demonstrates that venting interaction and voice initiation can
yield favorable recovery outcomes. These findings suggest that service managers
encourage customer to voice before providing service recovery to enhance posi-
tive service recovery outcomes.
Keywords: Service Recovery, Customer Voice, Satisfaction.
1 Introduction
A major issue in service business is service failure, commonly accepted as an inevitable
event in the service encounter context which initially results in customer dissatisfaction
[1, 2] and subsequently causes negative customer behavioral outcomes, e.g., negative
word-of-mouth or switching service provider [3-5]. In any case, a proper service recov-
ery [6] will not only address a service problem, but also restore customer satisfaction
and lead to positive behavioral outcomes [e.g., 7, 8].
A considerable body of service recovery research has recognized customer voice [9]
as crucial input for a service provider in coping with service failure. However, the ex-
tant literature leaves several important questions regarding the role of customer voice
in service recovery unanswered; hence the present research advances service literature
across two studies.
Generally, service failure triggers negative customer emotions, and the triggered
emotions have negative bias on service recovery evaluation. For this reason, study of
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customer emotions has mainly focused on the damaging effects of negative emotions.
In the first study, we advance the literature by exploring how regulating negative emo-
tions by using venting interaction to respond to customer voice influences customer
evaluation of service recovery, i.e., perceived justice, post-recovery emotions, and cus-
tomer satisfaction.
From the first study, it was found that venting interaction is an effective emotion
regulation strategy in response to customer direct voice. However, it is reported that up
to 95% of dissatisfied customers do not voice to the service provider [2]. While previ-
ous recovery studies only explored service recovery based on customer voice and ser-
vice recovery based on no customer voice (the firm was aware of service failure and
provided service recovery), no study has explored how customers would respond to
service recovery if they were invited to voice or whether that voice leads to service
recovery. Drawing on the role of initiation in the service recovery literature, we propose
that a customer receiving service recovery based on firm-initiated voice perceives ser-
vice recovery efforts differently than voice- or no-voice customers in those two service
recovery situations. The second study thus explores the role of customer voice initiation
on perceived justice, satisfaction, and negative word-of-mouth intention. The overall
contribution of this research is shown in figure 1.
Study 1
Service recovery
with venting inter-
action
Emotions
Service recovery
based on customer
voice
Perceived Negative
Justice word-of-
Service recovery mouth
based on no voice
Satisfaction
Service recovery
based on firm-initi-
ated customer voice
Study 2
Relationship derived from previous research
Relationship hypothesized in the current research
Fig. 1. Research contributions and conceptual model.
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2 Methodology
In both studies, scenario-based experiments were conducted to elicit customer re-
sponses in a bank service setting. The first study followed a between subject design
(service recovery with venting interaction vs. service recovery without venting interac-
tion). The scenario entailed a customer who went to the bank and encountered service
failure that triggered negative emotions. In the venting interaction condition, the cus-
tomer vented to the frontline staff who then tried to regulate the negative customer’s
emotions by listening and showing sympathy before providing service recovery. In the
no-venting interaction condition, the customer vent to the frontline staff who provided
service recovery without the venting interaction.
Bank customers in Thailand were recruited to participate in the experiment and were
randomly assigned to one of the two experimental conditions. They then were asked to
read and imagine that they were the customer in the scenario to respond to a series of
questions regarding manipulation check, response to the scenario, and personal infor-
mation. 205 out of 238 questionnaires were usable. In terms of sample characteristics,
48.3% of the respondents were male, with 20.5% of respondents aged 20-29; 29.3%
aged 30-39; 28.8% aged 40-49; and 21.4% aged over 50. In terms of education, 32.7%
had a high school degree or lower; 53.7% held an undergraduate degree; and 13.6%
had earned a graduate degree or higher. Manipulation check results indicated that the
manipulation worked as intended.
The second study conducted a between-subject experiment with three types of voice
(customer-initiated voice; firm-initiated voice; or no voice). The scenario described a
service failure that was caused by an unintentional error made by the frontline staff.
After the customer noticed service failure, the bank addressed the mistake based on
three different voice scenarios. In the customer-initiated voice scenario, the customer
complained to the staff. In the firm-initiated voice scenario, the customer complained
when the staff checked customer satisfaction following the service delivery and encour-
aged the customer to complain if not satisfied. Lastly, in the no-voice scenario, service
provider pre-emptively addressed the mistake without customer complaint.
A total of 202 undergraduate students, from two universities in Thailand, partici-
pated in this experiment, of which 39.6% of the respondents were male, and all re-
spondents were aged 20-29. Following the same data collection process as the first
study, the respondents were randomly assigned to the scenario and asked to answer to
the questions. Manipulation check results showed that the manipulation of the scenario
was successful.
3 Analysis and Results
In the first study, partial least squares structural equation modeling (PLS-SEM) analysis
was conducted to test the research hypotheses. In terms of measurement model assess-
ment, the results confirmed item reliability with the loadings of all items on the corre-
sponding constructs at above 0.7. The scale reliability was established as Cronbach’s
Alpha, and composite reliability values were above 0.7. Average variance extracted
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(AVE) of all constructs were higher than 0.5, reflecting convergent validity. Finally,
discriminant validity was confirmed with the AVE of each construct exceeding squared
correlation with any other constructs. The test of the structural model indicated that the
proposed model showed high predictive accuracy (R 2 for all endogenous variables,
namely, perceived justice, post-recovery emotions, and satisfaction ranged between
0.49 – 0.69). The model’s predictive relevance (Q2) for all endogenous variables was
between 0.38-0.55.
The second study carried out Multivariate Analysis of Covariance (MANCOVA) to
test research hypotheses. The measurement model assessment was satisfactory as factor
loadings exceed 0.7, AVEs were higher than 0.5, and the AVE of each construct was
above the shared variance between it and the other constructs. MANCOVA results
showed the significant effects of voice initiation on set of dependent variables, namely,
perceived justice, satisfaction, and negative word-of-mouth (Wilks’s =0.59, F=14.26,
p<0.0001). In addition, voice initiation individually affects each dependent variable
(the p-values were all less than 0.001).
4 Findings
The first study demonstrates that venting interaction plays an important role in regulat-
ing negative emotions and reducing negative bias of negative post-failure emotions on
service recovery evaluations. Specifically, it shows that perceived justice, post-recov-
ery emotions, and satisfaction varied in the different venting interaction conditions.
These findings provide support for emotion literature indicating that when individu-
als vent to the offender, they expect listening and empathy [10] a response which pos-
itively affects perceived interactional justice [11]. In addition, the findings supported
service recovery literature indicating that a firm’s interaction, such as one demonstrat-
ing empathetic listening [12, 13], concern, and empathy, heightened customer percep-
tion of interactional justice [2, 11, 14, 15]. Eventually, perceived interactional justice
mediates the effects of service recovery with venting interaction on post-recovery emo-
tions [16, 17] and satisfaction [18].
The second study found that service recovery evaluations are different across voice
initiation situations. Specifically, customers reported higher perceived justice and sat-
isfaction and lower negative word-of-mouth intention when receiving service recovery
based on voice invited by the staff.
The above findings are consistent with previous research of the role of initiation in
the service recovery context. Research on co-creation initiation suggested that when the
company initiates co-creation recovery, customers perceive greater procedural justice
and satisfaction than when co-creation is initiated by customer [19]. Similarly, study
on service recovery initiation has documented firm-initiated recovery has positive ef-
fects on customer perception of a service provider’s efforts [20-22].
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5 Theoretical and Managerial Implications
This research investigated the under-researched issues involving customer voice man-
agement in the service recovery context, i.e., post-failure negative emotion manage-
ment and voice initiation. From an emotional management perspective, the first study
established the role of venting interaction as an emotion regulation strategy in the ser-
vice recovery encounter. By introducing a new perspective of customer voice, the sec-
ond study extends customer voice literature by demonstrating that voice initiators affect
customer evaluation of service recovery.
These findings provide a number of practical implications for service managers in
several service industries, e.g., banking industry, hotel industry, and restaurant industry.
First, managers should be aware that when customers vent, they need to engage in ap-
propriate interactions, e.g., listening, understanding, and showing sympathy, together
with addressing the service problem. Second, as service failure may be unintentionally
caused by the service provider, managers can easily assure customer satisfaction by
posing standard follow-up questions. Finally, inviting customers to speak about their
perceived service problem is an effective service recovery strategy because their service
recovery satisfaction is higher under that condition than when the service recovery
stems from a normal complaint.
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