Online Service Failure: Understanding the Building Blocks of Effective Recovery Strategy

Online Service Failure: Understanding the Building Blocks of Effective Recovery Strategy

Yllka Azemi (Indiana University Northwest, USA) and Wilson Ozuem (University of Cumbria, UK)
Copyright: © 2019 |Pages: 16
DOI: 10.4018/978-1-5225-7344-9.ch012

Abstract

Digital media literature suggests that social media has eased the process of conceptualizing the customer, inclusive of their perception of fairness in the recovery provision. This is because individuals in social media reveal personal information and engage in online conversation and online communities. However, the inherited risk in social media such as the rapid spread of online negative word-of-mouth and the ease of switching behavior to other online providers no longer permits superficial understanding of customers' perception of failure-recovery experiences. Drawing on extant conceptual theories, the current chapter examines online failure and recovery strategies and argues that effective recovery strategies not only enhance the development of marketing communication programs but act as an effective tool for customer retention.
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Introduction

The online environment has revealed the advantages of mass marketing, permitting extended customer targeting (Poddar et al., 2009; Azemi & Ozuem, 2016). While a growing number of businesses are adopting e-tailing to expand beyond isolated markets, luxury businesses are still debating over a brick-and-mortar versus online approach (Gu & Ye, 2014; Felix et al., 2016; Ozuem & Azemi, 2018). Quach and Thaichon (2018) describe luxury brands across four resources (love, status, information, services), highlighting customers’ affection (i.e., love) for the product and the prestige (i.e., status) they gain from luxury product ownership as two main resources to evaluate customers’ satisfaction. They define information and services as means to support the customers’ buying process. Online provider-customer collaboration acknowledges a human-free interaction, recognizing customers’ structured online purchasing behavior (Weitzl & Hutzinger, 2017). This conveys skepticism that e-tailing could serve an environment that reaches affection and love. It implies an increased risk of dissatisfaction among online luxury customers, defined by services marketing scholars as the service failure phenomenon (Choi & Mattila, 2008; Chuang et al., 2012). While there is an established conceptual clarification of the recovery strategy types applicable to service failures, a favorable application of recovery strategies seems yet to be recognized (Hess et al., 2003; Ringberg et al., 2007). As Hazée et al. (2017) argue, ‘the literature seems to have taken for granted that organizations could apply the same recovery options’ (pp. 101-102). This leads to the double deviation scenario, which represents customers’ extended dissatisfaction with the company after the recovery strategy is experienced (Casado-Diaz & Nicolau-Gonzalbez, 2009). Luxury companies’ efforts to alter customer dissatisfaction into the service recovery paradox (i.e.,customers’ increased satisfaction with the company after the recovery rather than prior to the failure) seem evident (Matos et al., 2007). However, driven by the high product quality and impulsive purchasing novelties, the detriments of online service failure in online luxury businesses seem to foster the awakening of a double deviation scenario over the service recovery paradox. That being said, online luxury customers have higher recovery expectations, calling for providers to maximize the recovery effort.

Key Terms in this Chapter

Online Service Failure: If the customer’s expectation from the online purchase is not met, an online service failure occurs.

Service Failure Recovery Paradox: The customer’s satisfaction with the company is greater after the recovery than prior to the service failure.

Double Deviation Scenario: Customer dissatisfaction with the company is greater after the recovery experience than prior to it.

Socially Constructed Online Experience: An experience that is developed by more than one party, inclusive of the context, with the online failure recovery strategy seen as a three-fold construct of (1) customer, (2) provider, and (3) online platform.

Luxury Product: A high-priced product with specific attributes that trigger customers’ emotions and emotional purchase respectively.

Online Recovery Strategy: The activity or activities that the provider utilizes online to make the customer satisfied after a service failure experience.

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