Explanations: if, when, and how they aid service recovery

Abstract

Purpose: This study investigated if, when and how the use of four different types of explanations affect customer satisfaction after a service failure. Methodology/Approach: The study used written scenarios of a hypothetical service failure to manipulate explanation type, failure magnitude and compensation offered. Participants were randomly assigned to read and respond to one version of the scenario, whilst imagining they were the customer experiencing the service failure. Findings: Explanation type, explanation quality, failure magnitude and compensation each had significant effects on customer evaluations. Explanation type and explanation quality interactively affected the extent to which customers were satisfied with service recovery: Apologies and excuses yielded higher satisfaction levels than did justifications and referential accounts but only when the explanations were perceived to be of high (vs. low) quality. Specific types of attributions and forms of justice were shown to mediate the effects of three of the explanation types. Practical Implications: The study shows that customer evaluations following service failure vary with the type of explanation provided. Service firms need to provide an explanation in such circumstances, preferably a high quality excuse or apology, and need to understand the “process variables” that determine whether the explanation will satisfy aggrieved customers. Originality/Value: This is one of very few studies that have compared the efficacy of different types of explanations in service situations. The research sheds light not only on what types of explanations work best, but also on how they have their effect.