Recently, not only service companies but also commodities companies have paid more attention to service quality and customer satisfaction (Anderson, Fornell, & Lehmann, 1994;
Rust & Zahorik, 1993). Every manager understands that the key to attracting new customers and keeping the old customers was to provide high quality services and products (Halstead, Morash, & Ozment, 1996). It is important for companies to run a business successfully by keeping the old customers and establishing strong relationships with them (Tax & Brown, 1998). Managers have many different tasks, such as designing the standard operation procedures and training employees to improve customer satisfaction and maintain it. For this reason, managers have tried to avoid any single service failure. Service failures might result in negative influence, such as customer dissatisfaction (Parasuraman, Zeithaml, & Berry, 1985), which would cause switching to other companies, and negative word-of-mouth (Richins, 1983). However, there are too many uncontrollable factors in a service encounter, so that it seems difficult or even impossible to totally eliminate service failures in the real world(DeWitt & Brady, 2003; Hart, Heskett, & Sasser Jr, 1990).
As prior studies have mentioned, managers find it difficult to eliminate service failures, but they might devise ways to decrease the number of unsatisfied customers. One of those ways is to provide satisfying service recoveries to customers after service failures. The effect of
service recovery would directly influence customer satisfaction (Blodgett, Wakefield, &
Barnes, 1995; Gilly & Gelb, 1982). If after service failures, firms followed adequate service recovery policies and applied those policies well, then dissatisfied customers may return to a state of satisfaction (Michel, 2001; Sparks & McColl-Kennedy, 2001). Managers should be careful when providing service recovery to customers. Effective service recoveries might increase customer satisfaction and their repurchase intention (Cronin Jr & Taylor, 1992). On the other hand, poor service recoveries might produce the “double deviation” effect, exacerbating customer dissatisfaction (Bitner, Booms, & Tetreault, 1990) because customers were more emotionally involved and observant of recovery service than the first-time service.
Compared to receiving a failed service, customers are left more dissatisfied when getting an inappropriate recovery (Bitner et al., 1990).
Many studies have indicated that customer satisfaction is an important mediator for repurchase intention (DeWitt & Brady, 2003; Wirtz & Mattila, 2004), which is the main reason why customer satisfaction is so important to firms. Effective service recovery after service failures is an opportunity to convert the dissatisfied customers into satisfied ones after service failures. However, it has proved difficult to provide service recoveries to match the customer expectation and then successfully increase the customer satisfaction (Hart et al., 1990). As a result, developing effective service recovery strategies has become a focus for many researchers and managers (Stauss & Friege, 1999).
1.2 Research motivation
Many variables may influence the service recovery satisfaction, customer satisfaction after the service recovery. The justice theory is a basic, but influential theory for explaining the customer satisfaction (Oliver & Swan, 1989). Some prior studies which combined justice theory and service recovery, found that speed of response was an important variable, and was used to measure the procedural justice, one of three dimensions of justice, which has a significantly positive relationship to customer satisfaction. In other words, compared to a delayed response, an immediate response may increase customer satisfaction to higher level (Smith, Bolton, & Wagner, 1999; Wirtz & Mattila, 2004). Every firm trains its employees to be good at providing fast and adequate recovery. However, just as managers cannot always eliminate service failures, the speed of response may sometimes lag. Once there is a delayed response, customer satisfaction may decrease and consequently induce other negative influences. To improve the speed of response, managers have used many methods, such as training, empowering staff and establishing guidelines and standards for service recovery (Tax
& Brown, 1998). However, not enough research has paid attention to what are adequate solutions to counter a delayed response.
Other studies indicate that adequate explanations may increase the outcome justice, and consequently increase recovery satisfaction. This means the types of explanation is an element that can effect whether the explanation is adequate or not (Dunning, Pecotich, & O'Cass,
2004). It can also be expected that there may be distinct, adequate explanations offered in immediate recovery speed and in delayed recovery speed. Irrespective of whether customers receive immediate service recoveries or delayed service recoveries, if distinct recoveries were accompanied by adequate types of explanations, customer satisfaction and repurchase intention would be increased.
Besides the types of explanation, gender may also affect the efficiency of explanations related to the relationship between recovery speed and customer satisfaction and repurchase intention, depending on the types of explanation. Customers of different genders place different emphasis on particular elements of the service recovery process. McColl-Kennedy, Daus and Sparks (2003) found that both male and female customers would be happier when service providers displayed their concerns to them and gave them the opportunity to convey what they wanted. However, the same study also showed that the differences between male and female customers regarding their perception of how service recovery should be handled were sometime significant. Female customers preferred their opinions being heard during the period of service recovery. On the contrary, male customers did not view being heard to be so important, and paid more attention to the outcome of the recovery. The most important thing for men was what they would get from the recovery (McColl-Kennedy et al., 2003).
This study predicts that the explanation focus on recovery outcome will be more effective on male customers; whereas the explanation focus on recovery process will be more effective on
female customers. The study also sets out to examine whether the effects of recovery speed on customer satisfaction and repurchase intention will be different depending on types of explanations offered to different genders.
1.3 Research purposes
The main purpose of this study was to increase customer satisfaction and repurchase intention in response to different recovery speeds by using adequate types of explanations.
The second purpose of this study was to examine delayed recovery, because it usually results in lower customer satisfaction and lower repurchase intention than immediate recovery does.
A further purpose of this research was to examine whether gender was a moderator, which affected the efficiency of types of explanations. What is the optimal combination of explanation and speed of recovery for male and female customers in order to increase customer satisfaction and repurchase intention?
It was suggest that in order to increase customer satisfaction and repurchase intention, immediate recovery should be combined with an explanation that focused on the recovery outcome and that delayed recovery should be combined with an explanation that focused on the recovery process. The efficiency of the two pairs could be affected by the gender of customers. Thus, for male customers, who considered the outcome of recovery more important than the process of recovery, the explanation focus on outcome would be more
effective, whereas for female customers, who considered the process of recovery more important, the explanation focus on the process would be more effective.
1.4 Research questions
Prior studies indicated that if the customer satisfaction and repurchase intention after service failures are influenced by recovery speed. Generally speaking, if other variables are the same, then the faster the recovery speed, the higher the customer satisfaction and repurchase intention. This study then sets out to examine two major questions. The first question is whether the types of explanation will affect this effect, suggesting that an immediate recovery combined with an explanation focus on the recovery outcome, and a delayed recovery combined with an explanation focus on the recovery process, will achieve the highest level of customer satisfaction and repurchase intention. The second question is whether the influence of the types of explanations will be affected by the gender of customers.
It can be expected that gender could moderate the effectiveness of the types of explanations to distinct recovery speed.
1.5 Research structure
This research report comprises five chapters, which are outlined below.
Chapter one introduces the research background, research motivation, research purpose, research questions and research structure.
Chapter two reviews the existing literature relevant to this research and forms various hypotheses. It covers customer satisfaction; repurchase intention, recovery speed, types of explanation and gender. In this research, recovery speed is an independent variable and customer satisfaction and repurchase intention are dependent variables. The types of explanation will serve as a moderator of recovery speed, customer satisfaction and repurchase intention, and ender will serve as a moderator of the moderator, the types of explanation.
Chapter three illustrates the experiment design, data collection, sample selection, measurement, manipulation check, and pre-test.
Chapter four tests the hypotheses and shows the statistical results of the research. The data analysis methods include Reliability Analysis, MANOVA, Independent-Sample T Test, and ANOVA. According to using statistical analysis, some findings in this study could be explained.
Chapter five discusses the results and implications of the study, describes its limitations, and provides suggestions for further research.
The research flow is as follows:
Figure 1. Research Flow Identifying Research Questions
Literature Review
Developing Conceptual structure and Hypotheses
Deciding Measurements of Variables
Designing Scenarios
Pre-testing and Modifying Scales
Sampling and Collecting Data
Analyzing Data and Explaining Result
Conclusion, Limitations, and Future Research
CHAPTER 2 LITERATURE REVIEW AND RESEARCH HYPOTHESES