Chapter 11 Customer Satisfaction, Service Failure, And Service Recovery

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  • C H A P T E R 11

    Customersatisfaction,

    service failure, andservice recovery

    Anna S. Mattila and Heejung Ro

  • Customer satisfaction, service failure, and service recovery

    Introduction

    Thischaptercriticallyreviewsconceptualizationsandempiricalevidencein support of customer satisfaction, service failure, and service recoveryand their role in hospitality and tourism management. One of the mostbasic principles in hospitality marketing is that organizational perfor-mance is enhanced by satisfying customers. Satisfaction is a major out-come of marketing activity and it links decision-making processes andconsumption with post-purchase phenomena, such as attitude change,complaining behavior, word-of-mouth, repeat purchase and brand loy-alty (e.g., Oliver, 1980). Although hospitality and tourism organizationsmay consider customer satisfaction as a major goal, not all service expe-riences are satisfactory from the customers perspective (Ennew andShoefer, 2003). Service failures can, and often do, occur. One reason forthese failures is the labor-intensive nature of the hospitality industry,which inevitably leads to more heterogeneous outcomes compared togoods production processes (Kotler et al., 2006). Service performancevariability and failures also arise from the inseparability of service pro-duction and consumption. Given the relatively high frequency of servicefailures, service recovery has been identied as one of the key ingredi-ents for achieving customer loyalty (e.g., Tax and Brown, 2000). As aresult, developing an effective service recovery policy has become animportant focusofmanycustomerretentionstrategies (Smithetal., 1999).Service recovery strategies involve actions taken by service providers torespond to service failures (Grnroos, 2000). Both what is done (com-pensation) and how it is done (employee interaction with the customer)inuence customer perceptions of service recovery (e.g., Levesque andMcDougall, 2000).This chapter provides a critical analysis of the literature on cus-

    tomer satisfaction, service failure, and service recovery in the eld ofhospitality and tourism management and identies several strategiesthat hospitality organizations can implement in response to dissatisfy-ing service experiences. Following a brief overview of the conceptu-alization and measurement of the constructs of interest, an attempt ismade to bring to the readers attention the importance of broadeningthe scope of research in this eld. This approach naturally indicatesavenues that future research might fruitfully explore. The chapter con-cludes by presenting a comprehensive framework for the customerspost-purchase evaluation processes.

    Background

    Customer satisfaction

    What is customer satisfaction?

    Despite extensive research on satisfaction, researchers cannot agreeon a common denition for the concept. Oliver (1997) addresses this

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    denitional issue by noting that everyone knows what satisfactionis until asked to give a denition. Then it seems, nobody knows(p. 13). Due to its elusive nature, the literature is replete with differentconceptual and operational denitions of consumer satisfaction.Most denitions favor the notion of consumer satisfaction as an

    evaluative process. Specically, there is an overriding theme of con-sumer satisfaction as a summary concept [i.e., a fulllment response(Oliver, 1997); overall evaluation (Fornell, 1992); summary attributephenomenon (Oliver, 1992)]. Satisfaction is also often viewed as anattitude-like judgment based on a series of consumerproduct inter-actions (Yi, 1990). However, there is disagreement concerning thenature of this summary concept.Researchers portray consumer satisfaction as either a cognitive or an

    affective response. For example, Westbrook and Reilly (1983, p. 256)refer to satisfaction as an emotional response, while Howard andSheth (1969, p. 145) consider satisfaction as a buyers cognitive state.More recent denitions seem to incorporate emotions (Giese and Cote,2000), and there are several conceptual and operational denitions indi-cating that satisfaction is a mixed response comprised of both cognitiveand affective dimensions (e.g., Oliver, 1997). Recent research indicatesthat the relative importance of affect versus cognition on satisfactionjudgments might be time-dependent (Cote et al., 1989). For example,Homburg et al. (2006) show that the impact of cognition on satisfactionevaluations increases over time while the role of affect diminishes.Although satisfaction has been conceptualized in terms of either a

    single transaction (i.e., an evaluative judgment following the purchaseoccasion) or a series of interactions with a product over time, Andersonand Fornell (1994) note that nearly all satisfaction research has adoptedthe former, transaction-specic view. Indeed, several scholars have crit-icized the marketing eld for treating satisfaction as a static evaluationderived from a single trial event.The single-transaction view is particularly problematic for hospi-

    tality and tourism services that typically are composed of a series ofservice encounters within a single consumption experience. For exam-ple, tourism is a high-involvement, high-risk purchase, thus leading toa complex evaluation process with no predictable critical evaluationpoint (Bowen and Clarke, 2002). While some researchers focus on asingle aspect of the travel experience such as shopping satisfaction(Heung and Cheng, 2000; Reisinger and Turner, 2002), others includemultiple attribute dimensions such as tourist attractions, facilities,services, and prices (Yu and Goulden, 2006) and satisfaction with thetour provider and tour package (Hsu, 2000). Middleton and Clarke(2001), for instance, demonstrate the interdependence of variouscomponents of the travel package in driving overall satisfaction (i.e.,a medley of products). Tourists are thus likely to evaluate their travel

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  • Customer satisfaction, service failure, and service recovery

    experiences holistically rather than decomposing them to isolatedattribute-level components.Hospitality experiences typically involve a series of service encoun-

    ters. Satisfaction occurs at each encounter, and each encounter con-tributes to overall satisfaction. For example, Lemmink et al. (1998)examined the dining service delivery process by breaking it down intofour distinct stages: (a) reception, (b) ordering, (c) meal consumption,and (d) check-out. Satisfaction scores were gathered at each stage aswell as at the global level. The carry-over effects from previous stagessupport the notion of satisfaction as a cumulative concept.In tourism and hospitality research, satisfaction is often used as an

    independent variable to predict behavioral intentions such as revisitto the destination (e.g., Petrick et al., 2001; Petrick and Backman, 2002;Alegre and Cladera, 2006); return to the hotel or casino (Kandampullyand Suhartanto, 2000; Lucas, 2003); or engaging in positive word-of-mouth (e.g., Petrick, 2004; Petrick et al., 2006). Moreover, the relativeimportance of various attributes in driving these outcomes has beena topic of numerous studies in the hospitality and tourism literature(e.g., Barsky, 1992; Yksel and Rimmington, 1998).

    Dissatisfaction

    Compared to satisfaction, conceptualizing dissatisfaction has receivedrelatively little attention in consumer research. In general, dissatisfac-tion responses are relatively strong reactions to consumption episodes.Dissatisfaction is often accompanied with intense emotions (e.g., anger,frustration) and perceptions of unfairness. Most research on dissatis-faction has focused on understanding consumers behavioral responsessuch as complaining behaviors and negative word-of-mouth communi-cation (e.g., Tax, Brown, and Chandrashekaran, 1998). As such, extantliterature is relatively silent in terms of dening dissatisfaction (Gieseand Cote, 2000). Satisfaction research has, however, examined the uni-dimensionality of the satisfaction/dissatisfaction construct (Maddox,1981). Consumer dissatisfaction is typically portrayed as a bipolaropposite of satisfaction (e.g., Spreng et al., 1996; Mittal et al., 1999;).Alternatively, satisfaction and dissatisfaction are sometimes viewedas two different dimensions (e.g., Mano and Oliver, 1993). While theformer approach involves well-known scales (e.g., very satised vs.very dissatised), unipolar satisfaction and unipolar dissatisfactionmeasures are employed with the latter conceptualization. To illus-trate this measurement issue, consumers can have mixed reactions toa consumption episode. A restaurant patron might be satised withgood food but dissatised with a rude server. Under these conditions,satisfaction and dissatisfaction should be viewed as separate dimen-sions. Having dened satisfaction and dissatisfaction, the next section

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    will briey discuss the theoretical frameworks underlying consumerspost-purchase evaluation processes.

    The expectancy disconrmation with performance model

    The dominant conceptual model in the customer satisfaction litera-ture is the disconrmation of expectations paradigm (Oliver, 1977;Wirtz and Mattila, 2001). Later, the paradigm has evolved consider-ing the role of performance in the process (Oliver, 1980; Churchilland Surprenant, 1982), and then it has been named the expectancydisconrmation with performance model (Oliver, 1997). This modelposits that customer satisfaction is related to the degree and directionof the disconrmation experience, where disconrmation is dened asthe gap or difference between an individuals pre-purchase expecta-tions and perceived performance of the product/service (Oliver, 1980).Consumers expectations are (a) conrmed when the product/