Age matters: How developmental stages of adulthood affect customer reaction to complaint handling efforts

Journal of Retailing and Consumer Services 20 (2013) 154–164

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Age matters: How developmental stages of adulthood affect customer reaction to complaint handling efforts ¨ Holger Roschk n, Jana Muller, Katja Gelbrich Catholic University Eichst¨ att-Ingolstadt, WFI, Chair of International Management, Auf der Schanz 49, 85049 Ingolstadt, Germany

a r t i c l e i n f o

a b s t r a c t

Available online 7 December 2012

This research examines how age moderates the impact of justice perception (i.e., distributive, procedural, and interactional justice) on post-complaint satisfaction. By tracking the three justice dimensions’ effect sizes across different ages, we identify four developmental stages of adulthood, which are separated by five-year transition periods. The stages are young (18–27 years of age), early (33–43), middle (49–57), and late adulthood (Z 63). The moderation results show that the impact of distributive justice on satisfaction peaks in middle adulthood and the effect of procedural justice in early adulthood. Finally, the effect of interactional justice dips in early adulthood. Managerial and theoretical implications are discussed. & 2012 Elsevier Ltd. All rights reserved.

Keywords: Age Developmental stages of adulthood Justice theory Customer satisfaction Service recovery

1. Introduction Research on post-complaint behavior focuses on how retailers and service organizations should respond to failures in order to foster positive customer reactions (e.g., Mazaheri et al., 2011; Rod et al., 2008). Pertinent work usually draws on justice theory as a theoretical framework. This framework suggests that organizational responses to a complaint are perceived on three different fairness dimensions (distributive, procedural and interactional justice), which in turn, foster post-complaint satisfaction and subsequent positive consumer behavior like repurchase or positive word-of-mouth (WOM) (Smith et al., 1999; Tax et al., 1998). More recent research provides evidence that context variables, such as failure magnitude, culture, or gender, moderate the effect of the three justice dimensions (Karande et al., 2007; Orsingher et al., 2010; Weun et al., 2004). However, the customer’s age is only occasionally addressed in this field of research. This lack is surprising, given that general consumer research identifies age as important for predicting customer reactions like information processing (e.g., Phillips and Sternthal, 1977), decision-making (e.g., Simcock et al., 2006), and buying behavior (e.g., Tongren, 1988). From a managerial point of view, age is a particularly viable variable for customer segmentation (Homburg and Giering, 2001). This is because frontline employees are able to approximate age by sight, which is not the case for psychological segmentation criteria like attitude or involvement. Moreover,

n

Corresponding author. Tel.: þ49 841 937 1897; fax: þ 49 841 937 1940. E-mail addresses: [email protected] (H. Roschk), ¨ [email protected] (J. Muller), [email protected] (K. Gelbrich). 0969-6989/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jretconser.2012.11.002

age-related topics gain special attention in aging societies, where older customers represent a growing target group with a considerable purchasing power (Simcock et al., 2006). However, findings related to age differences in the postcomplaint literature are unsatisfactory. To the best of our knowledge, no study explicitly addresses how age affects postcomplaint consumer reactions in general, and with regard to justice dimensions in particular. The studies, which include age, only use it as a covariate and usually find insignificant or negligible effects on recovery (e.g., Gre´goire and Fisher, 2008; Smith et al., 1999). In addition, using age as a covariate only entails the examination of its main effects on customer reactions to complaint handling. Moderating effects have not been studied. Therefore, this research examines how age moderates the effect of the three justice dimensions (distributive, procedural and interactional justice) on subsequent customer reactions. For this purpose, we draw on the developmental stages of adulthood by Levinson (1986). Hereby, we make three contributions to the post-complaint literature. First, we seek to validate the applicability of developmental stages of adulthood to complaint situations. Second, we explain age-related differences in consumer responses to recovery efforts. Third, we help explain contradictory results on the impact of the three justice dimensions on customer reactions in prior research (Orsingher et al., 2010). The results are also important for marketing practitioners who are enabled to consider agerelated customer needs in the service recovery process. They are given a useful framework for defining distinct adulthood stages along with guidelines for age-based adaptations of the complaint handling process.

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2. Literature review 2.1. Research on post-complaint behavior Justice perceptions represent the individual evaluation of organizational responses to a complaint (e.g., offering compensation) (Smith et al., 1999). This evaluation—rather than the actual recovery effort taken by the organization—is important for service recovery because perception is a subjective and often biased interpretation of reality. Rather than actual events, perception accounts for individual behavior (Griffin and Ross, 1991). Justice theory is the pertinent framework in explaining the customer’s perception of the recovery effort (Blodgett et al., 1997; Tax et al., 1998). Complainants form their fairness perception along three dimensions: Distributive justice, which refers to the perceived fairness of resource allocation and the outcome of a decision (Deutsch, 1975); procedural justice, which centers around procedures by which decisions about outcomes are made (e.g., timely and flexible complaint process) (Lind and Tyler, 1988); and interactional justice, which involves the manner in which the customer is treated (e.g., respectful, empathetic) during the decision process (Bies and Shapiro, 1987). These three justice dimensions are shown in prior research to foster post-complaint satisfaction (e.g., Patterson et al., 2006; Tax et al., 1998). Post-complaint satisfaction is often conceptualized as a transaction-specific judgment, which refers to a particular transaction experience, namely the firm’s recovery effort after a service failure (e.g., Oliver, 1997; Smith et al., 1999). It is well established in post-complaint literature that post-complaint satisfaction fosters favorable customer outcomes (Davidow, 2003; Wirtz and Matilla, 2004). Two major outcomes are repurchase intention, that is the propensity to buy the organization’s products or services in the future (Zeithaml et al., 1996) and positive WOM intention, that is recommending the organization and its products or services to others (Maxham and Netemeyer, 2002). 2.2. Developmental stages of adulthood The developmental stages of adulthood (Levinson, 1986) are rooted in the Theories of Social Aging, which refer to changes in social relationships and social roles experienced by people in the course of their life (Moschis, 1994). These changes occur in response to important life events as well as transitions from one stage of adulthood to another. According to the seminal framework of Levinson (1986), adulthood comprises a sequence of stages that are separated by five-year long transition periods. The first stage is young adulthood, which lasts from 18 to 27 years of age. It represents the entry into adulthood, where young people are challenged by their start into professional life, try to find their place in society and face various romantic relationships (Ertel et al., 2009; Orth et al., 2010). Having dealt with these challenges, people enter early adulthood (33–40). They start a family and strive for advancement in professional life, which require extensive social resources and thus, entails a great amount of time pressure (Zuzanek, 2005). The next stage, middle adulthood (46–60), marks the peak in professional and private life. Taking care of their roles in private life (e.g., parent, spouse) often requires the extensive use of financial resources. Children may leave home and need support until they start their own professional life. Further, people need to build up financial security for the time when they leave professional life. Finally, late adulthood (from 65) represents the last stage, which is characterized by crucial life events such as retiring from work, and dramatic incidents like the death of one’s spouse (Levinson et al., 1978). Across all stages, people tend to become more selective in terms

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of their interaction partners as they grow older. This holds particularly true for late adults who feel a strong need for a manageable number of reliable and trustworthy people in their social network (Carstensen, 1992).1 While the concept of adulthood stages mainly rests on challenges in an individual’s social environment, it largely overlaps with psychological and biological aging, which may be both antecedent to and a consequence of social aging (Levinson, 1986; Mathur and Moschis, 2005). Psychological aging entails the development and change of cognition, personality, and self (Mathur and Moschis, 2005). Changes in cognition refer to a decline in information processing and limitations to working memory capacity (i.e., learning) (Cole and Houston, 1987; Rousseau et al., 1998). Changes in personality traits during one’s life span have been empirically shown by social psychologists (e.g., Haan et al., 1986). For example, late adults tend to be more modest in interactions than their younger counterparts (Warr et al., 2001), while younger adults tend to be more neurotic than their older counterparts (Wortman et al., 2012). Finally, psychological aging involves changes in self like self-esteem, which tends to be lowest among young and old adults as compared to early and middle adults (Orth et al., 2010). Biological aging reflects the state of health and physical performance of an individual. It refers to changes in cells and tissues that usually account for a decline in sensory and cognitive abilities (Mathur and Moschis, 2005). In turn, these changes affect people’s capability to perceive and understand information (Rousseau et al., 1998). In summary, social aging affects the number of social contacts, time availability, and social, as well as, financial obligations. It provides a basic framework, in which biological and psychological changes happen as cause and/or consequence of social changes.

3. Conceptual model and hypotheses Based on the developmental stages of adulthood, we hypothesize a moderating effect of these stages on justice dimensions’ impact on post-complaint satisfaction. In other words, we propose that the importance respondents attach to a justice dimension, evaluating the complaint incidence, varies across different levels of the moderator (Maxham and Netemeyer, 2002). In our study, the moderator variable is represented by the different life stages. In statistical terms, this means that the developmental stages of adulthood affect the strength of relationships between the three justice dimensions and post-complaint satisfaction (Baron and Kenny, 1986). The rationale for such moderating effects roots in social, psychological, and biological aging, which are proposed to affect the importance people attach to the outcome (i.e., distributive justice), speed (i.e., procedural justice) and respectfulness of complaint handling (i.e., interactional justice). Fig. 1 shows the conceptual model with the well-established direct effects as well as the hypothesized moderations for the effect of distributive, procedural, and interactional justice. Distributive justice represents the perceived fairness of a complaint outcome (Blodgett et al., 1997). The complaint 1 The four stages used in the present research (i.e., young, early, middle, and late adulthood) represent a slightly consolidated form of Levinson’s (1986) original concept because a broader distinction only offers incremental insights in a complaint-handling context. In particular, we subsume the initial transition period from 17 to 22 years of age under the category of ‘‘young adulthood’’. Second, we merge ‘‘entry life structure for middle adulthood’’ and ‘‘culminating life structure for middle adulthood’’ to ‘‘middle adulthood’’. Finally, for the purpose of consistent labeling, we use the terms ‘‘young adulthood’’ and ‘‘early adulthood’’ rather than ‘‘entry life structure for early adulthood’’ and ‘‘culminating life structure for early adulthood’’ for the first two phases.

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Distributive justice

Procedural justice

H1

H2

Repurchase intention

+ + +

Post-complaint satisfaction

H3

Positive WOM

Interactional justice Fig. 1. Baseline model and hypotheses.

outcome may come in tangible (e.g., receiving a discount or having a product replaced) or intangible forms (e.g., receiving a better service quality or a higher customer status). Complainants perceived this outcome as fair, if it suitably offsets the loss they experienced. We expect that age moderates the relationship between distributive justice and post-complaint satisfaction because social, psychological, and biological aging may affect a person’s outcome orientation. With regard to social aging (i.e., dealing with age-related challenges in one’s social environment), people are faced with varying financial liabilities and professional status through the different life stages. We argue that both financial obligations and professional status increase individual outcome orientation, that is, the effect of distributive justice on post-complaint satisfaction in the complaint handling process. This is because financial obligations may raise awareness for the tangible outcome of their complaint, which represents a monetary benefit (e.g., discount) or monetary value (e.g., product replacement) (Gelbrich and Roschk, 2011b). Professional status may drive people to focus on the intangible outcome of their complaint, such as receiving higher service quality or customer status enhancement because such outcomes acknowledge the customer’s social status (Beverland et al., 2010). In the life stages of adulthood, both financial liabilities and professional status follow the same pattern: They increase from young adulthood to early adulthood, peak in middle adulthood and decline in late adulthood. With regard to financial obligations: this is because people in middle adulthood need to support their children’s education and build up financial reserves for their retirement (Arnett, 2001; Levinson, 1986). In late adulthood, children usually start their own professional life, which reduces financial obligations (Levinson et al., 1978). With regard to professional status: this is because people start and advance in their professional career in young and early adulthood, respectively. They usually achieve their highest professional position in middle adulthood, and usually lose this position in late adulthood, when they retire from professional life (Levinson, 1986; Twenge and Campbell, 2002). With regard to psychological aging (i.e., dealing with agerelated changes of one’s personality), people undergo changes in their achievement motivation and modesty (Sedikides et al. 2008; Warr et al. 2001). We argue that achievement motivation fosters outcome orientation in a complaint-handling context, that is the value complainants place on distributive justice. This is because the outcome of a complaint is an obvious result that can be defined as how well customers ‘‘performed’’ in successfully filing their complaints (Singh and Wilkes, 1996). Further, the personality trait of modesty is likely to decrease outcome orientation following a complaint because modest people tend to be rather defensive and may not dare to express extraordinary expectations (Sedikides et al., 2008). Across their life stages, younger—as

compared to older—adults are usually not modest. They tend to focus on performance and achievement, and also take the initiative to achieve their goals (Warr et al., 2001). Late adults, in recognizing that their professional life may be over, tend to have a lower desire for achievement in life, which often goes along with a more modest (Warr et al., 2001), non-materialistic attitude (Belk, 1985). These psychological effects are closely linked to (and even due to) biological aging (i.e., dealing with age-related changes of one’s health status and physical performance). Late adults often experience a decline of health (Moschis, 1994), which reduces achievement motivation and may foster a more modest—and less demanding—attitude towards life in general and towards the outcome of a complaint in particular. In summary, people in young, early, and middle adulthood show a higher achievement motivation, a better health status, and a lower modesty level than late adults and should therefore put more focus on the outcome of the complaint (i.e., distributive justice). Yet, middle adults face a situation that distinguishes them from young and early adults and that may further drive their outcome orientation: They experience a peak in financial obligations and professional status. Hence, we assume that middle adults value distributive justice highest when forming their post-complaint satisfaction judgment, which means that the effect of distributive justice on post-complaint satisfaction is greatest in this life stage. In summary, we propose: H1. The positive effect of distributive justice on post-complaint satisfaction is greater in middle adulthood than in all other stages. Procedural justice encompasses the perceived fairness of the organization’s recovery policies and procedures. Generally, complaint handling is perceived as fair if the problem is solved in a timely and flexible manner (Smith et al., 1999). We expect that age moderates the relationship between procedural justice and post-complaint satisfaction because social, psychological, and biological aging may affect a person’s focus on a smooth and fast complaint handling. Regarding social aging, people experience changing roles, which affect their time availability during the different stages of adulthood (Moschis, 1994). As a consequence, people vary in their level of perceived time pressure (Simcock et al., 2006). Time pressure occurs when a certain task has to be completed in a time period shorter than the period required to adequately perform this task (Punj and Stewart, 1983), which is usually perceived as stressful (Maule et al., 2000). Given that people under time pressure experience such temporal limitations, it seems plausible that they will highly appreciate if service employees handle their problem in a fast and smooth manner. When looking at the different life stages, young adults have limited liabilities because they are often unmarried and still

H. Roschk et al. / Journal of Retailing and Consumer Services 20 (2013) 154–164

enrolled in further education rather than in a job, or they take lesser jobs. Hence, they may not suffer from extensive time pressure. In contrast, early adults face numerous professional (i.e., career advancement) and private obligations (e.g., young family, child care), which produce considerable time pressures (Simcock et al., 2006). In middle adulthood, time pressure decreases as children grow up and people establish their position in professional life (Zuzanek, 2005). This trend continues in late adulthood, which is characterized by fewer liabilities with respect to employment and family due to an empty nest and retirement (Levinson et al., 1978). With respect to psychological aging, people tend to vary in their level of neuroticism (i.e., tendency towards touchy and fretful behavior) across the life stages (Wortman et al., 2012). We assume that neuroticism reinforces the emphasis complainants place on a fast and smooth complaint handling process because this personality trait implies a high amount of stress and unruliness. A problem that is solved in a fast and flexible manner may help to calm these customers down and increase their satisfaction ratings. When looking at the life-stage concept, neuroticism is argued to decline across one’s life span. In particular, young and early adults are more neurotic than middle and late adults (Wortman et al., 2012). Finally, biological aging suggests that aging leads to a decline in health and an increased loss of memory, which appears to be particularly vital in late adulthood (Moschis, 1994; Orth et al., 2010). We propose that older people, with more limited cognitive abilities, tend to seek an extensive and slow complaint handling process because they need more time to perceive, process, and understand the information they receive. Looking at social, psychological, and biological aging together, high time pressure, high neuroticism, and good information processing abilities coincide during early adulthood. This particular combination may make early adults more impatient than people in other age brackets. Early adults may therefore highly appreciate a prompt and smooth complaint handling procedure, as it is comprised in procedural justice. Hence, we propose that there is a larger impact of procedural justice on post-complaint satisfaction in early adulthood than in all other phases: H2. The positive effect of procedural justice on post-complaint satisfaction is greater in early adulthood than in all other stages. Interactional justice captures how fair customers perceive the interaction with frontline employees to be during the complaint handling process. This justice dimension is characterized by a polite and respectful interaction (Tax et al., 1998). We expect age to moderate the relationship between interactional justice and post-complaint satisfaction because social, psychological, and biological aging may affect a person’s focus on a polite and respectful employee behavior when handling his/her complaint. With respect to social aging, people experience different levels of stability or instability in their social environment (Orth et al., 2010). We assume that instable circumstances tend to alienate people, and they seek social support (Cohen and Wills, 1985) and social proof (Cialdini et al., 1999). Hence, customers with an instable social background may appreciate employees who treat them in a respectful manner when faced with a service delivery problem. In contrast, people with a stable background may not need such support because they feel more settled and secure and thus, do not need extraordinary care. The life-stage concept suggests different levels of stability in the course of one’s life (Levinson, 1986). In young adulthood, after leaving their parents’ home, people often face an unstable life. They need to enter professional life, have to cope with changing social and romantic relationships, and try to establish their place

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in society. In early adulthood, people have successfully dealt with these challenges (Levinson, 1986). Coupled with a stable and reliable romantic relationship and/or the possible start of a family, people may get a sense of superiority and power over self and their environment. Likewise, they are often surrounded by a large social network, which provides social support (Orth et al., 2010). Unstable circumstances often return in middle adulthood and, in particular, in late adulthood. People in middle adulthood may feel deteriorated when a long partnership breaks up, when they lose their job, or when grown-up children start to leave home. In late adulthood, retirement changes life and causes much instability (i.e., obsolete work skills, a decrease in social and financial status). Finally, life changes dramatically, when the spouse deceases (Levinson et al., 1978). With regard to psychological aging, the above-mentioned (in)stability caused by important life events largely affects selfesteem (Orth et al., 2010). Self-esteem refers to a sense of personal worth or worthiness (Baumeister et al., 1996). We propose that low self-esteem increases the emphasis people place on a polite treatment in a service recovery context because people with low self-esteem tend to seek more approval from others and rely more strongly on their social support than people with high self-esteem (Rank et al., 2009). Self-esteem largely fluctuates across life stages (Orth et al., 2010). Young adults still have to find their place in society and, therefore, have a rather low self-esteem. Once people have successfully established their position in professional life, and possibly advanced in their career, self-esteem rises in early adulthood. Given the tremendous shifts in middle (e.g., children leaving home) and late adulthood (e.g., retirement) and the resulting instability, self-esteem often declines in the later stages of life, particularly in late adulthood (Levinson, 1986; Orth et al., 2010). The process of declining self-esteem in later life stages may be reinforced by biological aging, particularly by a decline in health (Mathur and Moschis, 2005). Further, a decline in health often goes along with a decrease in social contacts (Carstensen, 1992). With regard to complaint handling, it can be argued that people who lack social contacts feel a strong need for interaction and care, which they may seek to satisfy in a complaint situation that usually requires extensive employee–customer interaction. In summary, social stability and self-esteem are highest in early adulthood, whereas young, middle, and late adulthood go along with a considerable amount of social instability and, subsequently, lower self-esteem, which is combined with declining health and a subsequent decrease in social contacts in late adulthood. As high (low) stability and high (low) self-esteem tend to attenuate (reinforce) the need for social support from other people, we propose that the effect of interactional justice on postcomplaint satisfaction is lowest in early adulthood, compared to young, middle, and late adulthood. Hence, we propose: H3. The positive effect of interactional justice on post-complaint satisfaction is lower in early adulthood than in all other stages.

4. Method Consistent with prior post-complaint research, we used a cross-sectional retrospective self-report survey design (e.g., Ambrose et al., 2007; Tax et al., 1998). A cross-industry sample allows us to include a broad spectrum of industries and failure types, thus enhancing external validity. In the course of the survey, the respondents were first asked to describe their most recent dissatisfactory service or consumption experience, for

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which they complained. These open-ended failure descriptions helped us to retrieve information about failure type and industry. In the second part of the survey, a series of questions captured justice perceptions, post-complaint satisfaction, and customer behavioral intentions. We also included items assessing failure magnitude, attitude toward complaining, likelihood of success, and prior experience with the firm. All constructs were measured with Likert-type scales adapted from previous research ranging from 1 (‘‘strongly disagree’’) to 7 (‘‘strongly agree’’) and are summarized with their items and respective sources in Appendix A. We also asked for demographic characteristics such as age, gender, educational level, and employment status. For the subsequent analysis, demographics, failure type, industry sector, as well as attitude toward complaining, likelihood of success, prior experiences, and failure magnitude served as control variables because they have been suggested to influence postcomplaint behavior (Ambrose et al., 2007; Blodgett et al., 1993; Smith et al., 1999). In sum, 350 usable surveys were collected from German consumers. Table 1 depicts respondent characteristics. Since we used quota sampling, the age and gender distribution do not significantly vary from the general population (w2[2] ¼2.823, p ¼0.244). Table 2 provides information on failure characteristics, including industry sector, failure type, failure magnitude, and subsequent recovery efforts of the organization. In order to rule out biases resulting from age-specific failure characteristics, we checked if developmental stages of adulthood and failure characteristics were significantly related. This was not the case. Thus, no biases with regard to failure characteristics can be observed. Structural equation modeling using the Partial Least Square approach (PLS) was employed to carry out the analyses (Ringle et al., 2005). The first step comprised baseline model estimation and measurement validation by assessing internal consistency and discriminant validity for each construct. Since PLS does not allow for significance assessment of the path coefficients, we performed a bootstrapping procedure with 1000 subsamples each (Chin et al., 2003). The second step contained a preliminary analysis, which captured age as a continuous variable. Though not particularly hypothesized, the continuous nature of age allows us to check if age alters justice dimensions’ path coefficients in a linear way (Baron and Kenny 1986). Such a linear effect would be characterized by a steady increase or decrease of justice dimensions’path coefficients across the ages. In the third step, we calculated the path estimates of justice dimensions’ impact on

Table 1 Respondent characteristics. Variables Age (mean¼ 44.6 years) 18–39 years 40–59 years 60–75 years Gender Male Female Highest educational level completed Junior high-school High-School Apprenticeship Master craftsmen College/university Others Employment status Employed Not employed In education (university or apprenticeship) Not working or retired

post-complaint satisfaction for each year of age.2 Based upon the age-dependent distribution of path-coefficients, we then identified the lower and upper boundaries of the adulthood stages in the post-complaint context as well as the transition periods between them. For this purpose, we assumed that transitions would be represented by a strong increase or decrease of justice dimensions’ path coefficients, whereas the coefficients would remain relatively stable within a life stage. In the fourth step, the hypotheses were tested via subgroup-comparisons of the previously identified adulthood stages. Subgroup-analysis was carried out by comparing path coefficients of the distinct stages via ttests as suggested by Chin (2011). It is based on the pooled standard errors obtained via bootstrap resamplings. In steps one, three and four, we included control variables by modeling them as independent variables influencing satisfaction and behavioral intentions (Ambrose et al., 2007).

5. Results 5.1. Baseline model estimation and measurement validation Table 3 shows means, standard deviations and correlations for all study variables. In the baseline model, all paths are positive and significant at p o0.05. The justice dimensions foster postcomplaint satisfaction, which in turn predicts behavioral intentions. R2 ranges from 0.49 for repurchase intention and 0.57 for positive WOM intentions to 0.84 for post-complaint satisfaction, thus indicating a good explanatory power of the baseline model. For the purpose of measurement validation, internal consistency was assessed by composite reliability, coefficient alpha, and factor loadings (Bagozzi and Baumgartner, 1996; Gerbing and Anderson, 1988). For each construct, the composite reliabilities and coefficient alphas exceed the required thresholds of 40.6 and 40.7 respectively as shown in the Appendix A (Bagozzi and Yi, 1988; Nunnally 1978). In particular, justice perceptions, postcomplaint satisfaction, and behavioral intentions exhibit excellent values larger than 0.9. With regard to the coefficient alphas, the values for the two control variables—likelihood of success (0.63) and prior experiences (0.67)—are somewhat low. Since both variables do not represent core model elements and similar values ( 40.6) have been reported elsewhere (Hess et al., 2003; Patterson et al., 2006), we consider these values to be acceptable. Discriminant validity was assessed with Fornell and Larcker’s criterion (Fornell and Larcker, 1981). It was met for all possible construct pairs, which further supports the measurement model (see Table 3).

Frequency in %

5.2. Preliminary analysis

36.9 34.6 28.5

To test a linear moderation effect, we calculated multiplicative terms of age with the indicators of each justice dimension (Chin et al. 2003). Age and justice dimensions were mean centered before multiplication in order to avoid multicollinearity. In all cases, the multiplicative term is not significant, indicating that

50.3 49.7 21.4 24.9 13.4 8.3 26.0 6.0 59.4 40.6 16.8 28.8

2 The path estimates of the justice dimensions for each year were calculated as nine-year moving averages using the following procedure. First, we estimated the path coefficients for the respondents aging between 18 and 26 years. Next, the path coefficients were estimated for the interval 19–27 years. Likewise, we proceeded in a year-wise manner up to the 75 year-olds. In doing so, the path coefficients for one particular age (e.g., the 26 year-olds) were estimated nine times (i.e., 26 is an element of nine intervals from 18y26 to 26y34), and then averaged. We decided on an interval range of nine years because it offers a reasonable trade-off between number of respondents included and preciseness. We used moving averages because otherwise an exorbitantly large sample would be required (50 years  100 respondents/year ¼ 50,000 respondents).

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159

Table 2 Failure characteristics. Variables

Sample descriptions

Industry sector (in %) Retail Top 5 retail industries: consumer electronics (29.0%), clothing (22.1%), online and offline distance selling (16.5%), commodities (15.6%), groceries (4.8%), others (12.0%; e.g., home improvement stores and health care, furniture) Service Top 5 service industries: regular restaurant (28.6%), telecommunication services (25.2%), auto dealer service (12.6%), fast food restaurant (4.2%), hotel (3.4%), others (26%; e.g., banking services, travel agencies and public transport) Failure type (in %) Outcome failure The newly purchased teddy bear was dirty. They cooked the steak bloody instead of medium. They sent us the wrong product. Process failure The meals took ages to arrive. They charged me for unsubscribed telephone services. The florist did not care. Her attitude was that it was my problem, not hers. Mixed I changed my telephone and Internet provider. However, the connection did not work. The provider claimed my hardware to be the problem, which was not the case. Only when I threatened the provider to terminating the contract, did he check the connection, found the fault and corrected it. Failure magnitudeb Recovery effort (in %)c Exchange/ After three weeks, the sound of our TV did not work. They re-placed the TV re-performance and provided us with loan TV set until the replacement was delivered, without charging us for the loan TV set. Cash refund I bought some hair care products. The cashier accidentally double charged me. When I noticed the failure, she gave me my money back. Correction I ordered a new car. Three weeks later, I spotted a slight crack in the side skirt. I complained about it and the car dealer repaired it without charging me. Apology When I complained to the server that the meal was not what I wanted, she immediately apologized for the mishap. Recently, I went to the supermarket. I wanted to make use of their service Other (e.g., guarantee, which entails a voucher in case of more than five minutes waiting voucher, store time at the checkout. However, they were out of vouchers. So I complained credit and free about the situation via email. In response to my complaint, they offered me a gift) voucher worth three times the usual value. Nothing I ordered a pizza without mushrooms. However, they brought me the pizza with mushrooms. When I complained about it, they did not care nor did they do anything to rectify the situation.

Overall Young adulthood (18–27)

Early adulthood (33–43)

Middle adulthood (49–57)

Late adulthood (63–75)

66.0

65.0

65.7

66.0

59.5

34.0

35.0

34.3

34.0

40.5

70.0

68.9

77.1

71.7

63.5

13.1

12.6

2.9

11.3

20.3

16.9

18.4

20.0

17.0

16.2

pa

0.839

0.343

5.49

5.40

5.84

5.66

5.23

31.3

34.9

32.5

22.0

29.5

22.3

28.4

17.5

27.1

20.5

11.1

6.4

15.0

18.6

9.0

5.3

2.8

10.0

5.1

6.4

9.8

5.5

5.0

6.8

10.3

20.2

22.0

20.0

20.3

24.4

0.206 0.493

a w2-tests where used to check for a significant relationship between the developmental stages of adulthood and the independent variables except for failure magnitude, where a F-Test was used. b Likert-type scale ranging from 1 (‘‘strongly disagree’’) to 7 (‘‘strongly agree’’). c Multiple answers possible, based on overall recovery efforts reported.

age exhibits no linear moderation effect on the relationships between justice-dimensions and post-complaint satisfaction, which is in line with our hypotheses. Our hypotheses propose a nonlinear moderation, with the impact of the independent variable (i.e., justice) changing at a critical point (i.e., transition periods). In order to take this non-linearity into account, Baron and Kenny (1986) suggest performing sub-group analyses. For these subgroups, we draw on the developmental stages of adulthood. 5.3. Identification of developmental stages of adulthood Fig. 2 displays the path estimates between justice dimensions and post-complaint satisfaction for each age year.3 Based upon the distribution of path coefficients across age, we identified the upper and lower boundaries of the four adulthood stages (low fluctuation of path coefficients) and the transition periods between them (strong increase/decrease of path coefficients). In particular, the identified stages have the following ranges: young 3

In the form of a nine-year moving averages.

adults (18–27 years of age), early adults (33–43), middle adults (49–57), and late adulthood (Z63), separated by a transition period of five years each. 5.4. Hypotheses testing Fig. 2 shows the results of hypotheses testing both graphically (chart on the upper side) and statistically (table at the bottom). H1 suggests that the positive effect of distributive justice on postcomplaint satisfaction is greater in middle adulthood than in all other stages. The chart in Fig. 2 shows that the impact of distributive justice remains relatively constant in young and early adulthood and peaks in middle adulthood. T-tests support the assumption that the path coefficient for middle adulthood (bMA ¼0.61) is significantly higher (Db ¼ 0.31, t(202)¼2.127, p¼0.017) than for young and early adulthood (bYA/EA ¼0.30). In late adulthood (bLA ¼0.33), the impact of distributive justice declines significantly (Db ¼ 0.28, t(125)¼1.713, p ¼0.044). Thus, H1 is supported. In H2, it is assumed that the positive effect of procedural justice on post-complaint satisfaction is greater in early adulthood than in all other stages. T-tests show that the effect size of

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Table 3 Means, standard deviations, average variances extracted and correlations. Mean

Age Gender (GE) (1¼ male) Education (ED)a Employment status (ES) (1¼ employed) Industry (IND) (1¼ retailing) Outcome failure (OF) (1¼ outcome) Process failure (PF) (1¼ process) Failure magnitude (FM) Attitude toward complaining (ATC) Likelihood of success (LOS) Prior experiences (PE)b Distributive justice (DJ) Procedural justice (PJ) Interactional justice (IJ) Satisfaction with complaint handling (S) Repurchase intention (RI) Positive WOM (PW)

SD j correlations Age

GE

ED

ES

44.57 17.67 — 0.50 0.50 0.02 2.92 1.54 0.25 0.59 0.49  0.11

— 0.21 0.11

— 0.12

—

0.66 0.70

0.47  0.03  0.03  0.05 0.46  0.03 0.02  0.03

0.07 0.01

FM

ATC

0.13

0.34

5.49 3.25

1.56  0.02 0.14 0.06 0.08  0.06  0.03 0.00 0.88 1.73  0.04  0.18  0.05  0.14  0.10 0.01  0.07  0.19

0.80

5.97 3.11 4.51 4.31 5.02 4.29

1.25  0.04  0.01  0.03 0.06 1.24 0.21 0.02 0.12 0.04 2.24 0.04  0.04  0.01  0.02 2.27 0.06  0.07  0.06  0.04 1.92 0.06  0.02  0.02 0.04 2.32 0.03  0.04  0.02  0.04

0.18 0.13 0.26 0.24 0.17 0.24

0.25 0.14 0.40 0.42 0.37 0.42

3.22 3.73

1.79 2.04

0.18 0.24

0.27  0.17  0.09  0.08 0.17 0.40 0.58 0.54 0.47 0.60 0.93 0.35  0.21  0.07 0.00 0.20 0.36 0.65 0.62 0.57 0.70 0.79 0.96

0.07  0.07

0.07  0.04 0.05  0.06

IND

OF

— 0.54

—

0.07  0.04  0.20  0.59

0.07  0.03 0.01 0.00

PF

LOS

PE

DJ

PJ

IJ

S

RI

PW

—

 0.11  0.06  0.22  0.24  0.26  0.24

0.10  0.08 0.85 0.00  0.03 0.14 0.85  0.13 0.02 0.17 0.16 0.92  0.09 0.03 0.13 0.13 0.72 0.95  0.02  0.02 0.19 0.13 0.63 0.71 0.94  0.10 0.00 0.12 0.13 0.82 0.84 0.78 0.98

SD¼ standard deviation, NA ¼not available, and square root of the average variance extracted are depicted in bold numbers on the diagonal. a b

1 ¼junior high-school, 2¼ high-School, 3¼ apprenticeship, 4 ¼master craftsmen and 5¼ college/university. The first item, which measures prior experiences in years, was rescaled to range from 1 to 7.

Fig. 2. Moving averages and group comparison results of justice dimensions’ path coefficients.

procedural justice increases from young (bYA ¼0.41) to early adulthood (bEA ¼ 0.62), yet not significantly (Db ¼0.21, t(136)¼1.121, p¼ 0.132). In transition period 2, the effect drops significantly and then remains stable during middle and late adulthood, which partially supports H2 (bMA/LA ¼0.28, Db ¼0.34, t(192)¼2.024, p ¼0.022). H3 suggests that the positive effect of interactional justice on post-complaint satisfaction is lower in early adulthood than in all

other stages. T-tests indicate that the impact of interactional justice significantly decreases from young (bYA ¼0.33) to early adulthood (bEA ¼ 0.03, Db ¼0.30, t(136)¼1.747, p ¼0.041). As respondents get older, the impact of this dimension increases again. While the effect size difference to the group middle adulthood (bMA ¼0.28) does not reach statistical significance (Db ¼0.25, t(125) ¼0.671, p ¼0.252), it does so for late adulthood (bLA ¼0.40, Db ¼0.37, t(107)¼2.149, p ¼0.017).

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Hence, H3 is supported. All reported path coefficients are significant at p r0.05, with one exception: Interactional justice has no significant impact on post-complaint satisfaction in the group early adulthood (bEA ¼0.03, p¼ 0.748). Although not specifically hypothesized, we tested if age moderates the relationships between post-complaint satisfaction and behavioral intentions. The effect of post-complaint satisfaction on repurchase intention fluctuates across adulthood stages (bYA ¼0.45, bEA ¼ 0.34, bMA ¼0.64 and bLA ¼ 0.39), but none of the differences are statistically significant. Similarly, the impact of post-complaint satisfaction on positive WOM remains relatively constant across adulthood stages (bYA ¼0.58, bEA ¼0.61, bMA ¼ 0.56 and bLA ¼0.65), and none of the differences are significant.

6. Discussion 6.1. Research issues The results of this study contribute to the current knowledge of post-complaint research in three ways. The first contribution is that—drawing on the pattern of path coefficients between justice dimensions and post-complaint satisfaction across ages—we are able to transfer the developmental stages of adulthood suggested by Levinson (1986) to the service recovery context. In particular, we identify the upper and lower boundaries of four stages and three five-year transition periods between them. The first developmental stage is young adulthood and lasts from 18 to 27 years of age. It is followed by early adulthood, which encompasses the years 33–43. The next stage is middle adulthood, which lasts from 49 to 57 years of age. The final stage is old adulthood, which includes ages from 63 onward. Given the diverging importance of the three justice dimensions across these periods, the developmental stages of adulthood provide a useful framework for studying age-related effects in post-complaint behavior, which directly leads to the second contribution of our study. The second contribution is that live-stage segmentation reveals diverging effects in consumer responses to the three justice dimensions. With respect to distributive justice, the results support H1, that is, the greatest impact among middle adults and lower impact for the other stages. For middle adults, distributive justice is the strongest predictor of post-complaint satisfaction. Possibly, in the course of their current life, they develop a strong focus on the outcome of their complaint, which may be due to large financial liabilities, high professional status, and low modesty. In late adulthood, distributive justice then loses importance because older people seem to be less outcome-oriented. This may be because people in this life stage have low financial liabilities, low professional status, and a modest personality, which makes them less demanding with regard to the ‘‘performance’’ achieved when filing a complaint. With regard to procedural justice, H2 posits a peaking impact among early adults and a lower impact for the other stages. In line with this hypothesis, the results show that a timely and flexible problem resolution processes (procedural justice) are especially important for early adults and less important for middle and late adults. This is because in early adulthood, high time pressure coincides with high neuroticism. So it may be most important for customers in this life stage to have their problem settled immediately. Further, their cognitive abilities (which decline in later life stages) allow them to deal with such a rapid complaint handling. Contrary to expectations, young adults do not exhibit a significantly lower effect size of procedural justice on postcomplaint satisfaction than early adults. A reason may be that neuroticism, which declines across one’s life span and tends to be

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highest for young adults (Wortman et al., 2012), plays a more important role than time pressure, which tends to be lower for young adults than for early adults (Zuzanek 2005). Neuroticism implies hasty and fretful behavior; so young adults—though not under the same time pressure as early adults—may be equally impatient and may also expect a fast solution of their problem. Our results support H3 with regard to interactional justice. H3 states that the impact of this justice dimension is lowest among early adults. People in early adulthood successfully challenged unstable life circumstances of young adulthood (e.g., finding a place in society, changing romantic relationships, start of professional life) enhancing their self-esteem and giving them a sense of controllability over their life. In middle adulthood, unstable circumstances return (e.g., losing or switching a job, children starting to leave home, breaking-up of a long-lasting partnership), and people may become aware that life is not as controllable as they believed when they were younger. In late adulthood, unstable life circumstances may become even more salient (e.g., retirement, obsolete work skills, death of spouse) and can be accompanied by a decline of health (Levinson et al., 1978; Orth et al., 2010). Such unstable circumstances are supposed to decrease self-esteem (Orth et al., 2010), which is why interactional justice is assumed to gain importance in its impact on postcomplaint satisfaction.4 In summary, as derived from the second contribution, it can be recommended that researchers should not examine age-related differences by simply dividing the sample into young vs. old consumers, but draw on the developmental stages of adulthood. In particular, if researchers seek to control for the effect of age, they should choose respondents from the same stage of adulthood, because they represent a homogeneous group with respect to the importance of service recovery efforts. Yet, generalizations from one age group to the general population should be used cautiously. Another option to take age-related differences into account is to conduct cross-sample comparisons between respondents of different age groups in order to uncover sample-based biases and increase the external validity of findings. The third contribution of this study is to provide evidence that age accounts for the relative importance of the three justice dimensions in predicting post-complaint satisfaction, which exhibits large fluctuations (Gelbrich and Roschk 2011a). In particular, it is shown that the effect of age on the relationship between justice dimensions and post-complaint satisfaction follows a nonlinear pattern, which can be explained with the developmental stages of adulthood. In line with other researchers, who find that service recovery depends on contextual variables like gender or failure type (Karande et al., 2007; Weun et al., 2004), we provide additional support for the notion that complaint handling is context dependent, and we show that age is an important context variable in complaint handling. Although not specifically hypothesized, this research also provides a side contribution with respect to the behavioral

4 One may argue that our findings are driven by differences in prior experience with service failure and complaint handling rather than by differences in age. In other areas of research, such as leadership (Dimov and Shepherd, 2005) or adoption of new technologies (Venkatesh et al., 2003), experience plays an important role in individual behavior. However, we argue that prior experience may not account for the results in the service recovery context presented here. This is because consumers tend to give inordinate weight to their most recent occurrence of service performance while attenuating past experiences (Oliver, 1997). Hence, the sum of prior experience with service failure and recovery, which may be larger for older people, is not important for customer reaction to organizational recovery efforts. Instead, people tend to draw on their most recent complaint experience. As people across all age groups need to make use of retailing and other services, one can assume that they have at least one (and at any rate one recent) experience with service failure and recovery.

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consequences of post-complaint satisfaction. In particular, the results show that age does not moderate the relationships between post-complaint satisfaction and behavioral intentions (i.e., repurchase intention and positive WOM intention). It could have been expected that both relationships are reinforced with increasing age. This is because as people become older, their preferences tend to become more stable, which should result in a more consistent attitude—behavior sequence (i.e., a strong effect of satisfaction on repurchase intention, Lambert-Pandraud et al., 2005). Moreover, prior research shows that people more often engage in WOM activities with increasing age (Gremler and Brown, 1999). This should result in a stronger effect of satisfaction on positive WOM intention.

Two factors may explain this lack of moderation. First, older consumers are more willing to repurchase and to provide referrals than their younger counterparts, but possibly fewer social contacts give them less opportunity to do so. Taking the viewpoint of younger consumers, a second explanation is that these people are able to utilize more channels to express their opinions (e.g., blogs, social networks, twitter). 6.2. Managerial implications The present research suggests that companies should adapt complaint handling actions to the adulthood stage of their customers. For young adults (18–27 years), an ideal complaint

Table A1 Summary of constructs, scale items, coefficient alphas, composite reliabilities. CAa

CRb

0.94

0.96

Procedural justice (Smith et al., 1999; Tax et al., 1998)  The length of time taken to resolve my complaint was adequate.  They responded quickly to my complaint.  In dealing with my complaint the company showed adequate flexibility.

0.95

0.97

Interactional justice (Blodgett et al., 1997; Colquitt 2001)  I was treated with respect.  I was treated in a polite manner.  The employees seemed to care about me.

0.94

0.96

0.95

0.98

Repurchase intention (Maxham and Netemeyer, 2002; Zeithaml et al., 1996)  I plan to do more business with this particular company.  I intend to shop again at this company.  In the future I will buy more services or products of this company.

0.92

0.95

Positive WOM (Maxham and Netemeyer, 2002; Zeithaml et al., 1996)  I would recommend the company to others.  I would encourage my friends and relatives to buy products or services from this company.  I told my friends and relatives positive things about the company.

0.96

0.97

0.85

0.91

Attitude toward complaining (Blodgett et al., 1997; Richins, 1983)  I am less likely to return an unsatisfactory product than are most people I know (R).  If a defective product is inexpensive, I usually keep it rather than put up a fuss or complain (R).

0.72

0.81

Likelihood of success (Blodgett et al., 1993; Hess et al., 2003)  When this problem first occurred, I was confident that the company would let me exchange  the product, give me a refund, or would repair the product.  I expected the company to do everything in its power to solve the problem.

0.63

0.83

Prior experiences (Smith et al., 1999; Voorhees et al., 2006)  How many years have you been a customer of this company?c  I have a good deal of experience with this service provider.

0.67

0.84

Construct and scale items Independent variables Distributive justice (Maxham and Netemeyer, 2002; Smith et al., 1999)  The outcome I received was fair.  I did get what I deserved.  The final outcome I received was fair, given the time and hassle.  Given the inconvenience caused by the problem, the outcome I received was fair.

Dependent variables ¨ Post-complaint satisfaction (Homburg and Furst, 2005)  I was satisfied with the handling of the problem.  The company’s way of handling the problem was satisfying.

Control variables Failure magnitude (Craighead et al., 2004; Hess et al., 2003)  The failure was important.  The occurred problem was severe.  The service/product failure could have caused me much hassle if no resolution had been attempted.

Unless otherwise noted all items were measured as ranging from 1 (‘‘strongly disagree’’) to 7 (‘‘strongly agree’’). R¼ reverse coded. a b c

Coefficient alpha. Composite reliability. Measured in number of years.

H. Roschk et al. / Journal of Retailing and Consumer Services 20 (2013) 154–164

handling process can be characterized as an empathic and prompt problem solution. This is because interactional and procedural justice have a stronger impact on service recovery than they have in the other stages of adulthood. Therefore, companies should establish recovery guidelines (e.g., complaint response within one day), which allow for a timely and flexible problem solution. Further, frontline employees should be instructed to treat young complainants seriously and as equals. In contrast, a desired complaint handling for early adults (33–43) can be described as a mere act of failure restoration presented in a fast and proper manner. Early adults in particular value a timely and flexible problem handling process (procedural justice) whereas a fair interaction (interactional justice) is not crucial for successful complaint handling. Therefore, handling complaints online could be an adequate strategy in this age group. Another action that facilitates procedural justice is to initiate service recovery actions proactively, that is, right when the failure occurs—even before customers file a complaint (Smith et al., 1999). Procedural justice can also be reinforced by giving complainants a choice over the recovery outcome (Chang, 2008) and by empowering frontline employees (Hocutt and Stone, 1998) to solve the problem immediately. For middle adults (49–57), distributive justice is most important. They primarily evaluate organizational complaint handling based upon the complaint outcome they receive. There are several strategies for providing an adequate outcome for the complainant. For instance, frontline employees may ask complainants what their desired outcome would be or provide compensation beyond mere failure restoration (Gelbrich and Roschk, 2011a). Moreover, a sincere apology represents psychological compensation (Tax et al., 1998). Procedural and interactional justice are of secondary importance. Therefore, the process of compensating for the service failure as well as interpersonal communication during this process should meet minimum requirements. Finally, for late adults ( Z63 years), interactional justice is more important than in other stages of adulthood. Hence, an ideal complaint handling strategy is to establish a warm rapport with complainants and find a reasonable solution in an acceptable time. For this purpose, companies should sensitize their employees to the specific needs (e.g., individual attention in complex situations) and desires of older people (e.g., being treated as valued customers, getting complex processes explained in detail and in a calm setting). They should also communicate values such as responsibility and conscientiousness, which become more important as people get older (Warr et al., 2001). 6.3. Limitations and further research While the results of this study broaden our understanding of age-related differences in customer responses to service recovery, some limitations offer potential for future research. First, our study might be subject to a Western bias. It has been argued that the process of aging as well as the effect of recovery efforts are contingent on culture (Keith et al., 1994; Patterson et al., 2006). For example, people from Eastern cultures tend to have a stronger relational focus than Westerners (Triandis, 1989). Thus, in Eastern cultures, interactional justice is possibly more important than in Western cultures—across all adulthood stages. Second, we observe that age does not moderate the relationships between post-complaint satisfaction and behavioral intentions. Possibly, other factors such as relationship quality (Gre´goire and Fisher, 2008) may explain varying path coefficients. Second, we examined age-related reactions to recovery efforts by a firm in response to a complaint, which requires that customers have filed a complaint. Given that there is a considerable percentage of non-complainers (Stephens and Gwinner, 1998),

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it seems worthwhile to analyze if the relationships between consumer reactions in response to a service failure and subsequent complaint behavior are moderated by age as well. For instance, self-esteem fosters complaint behavior (Chelminski and Coulter, 2007). Since self-esteem depends on age (Orth et al., 2010), age may also affect the readiness to voice a complaint after a service failure. In particular, self-esteem is lowest among young and old adults when compared to early and middle adults (Orth et al., 2010). Thus, for these respondents, self-esteem probably is a worse predictor of complaint behavior compared to early and middle adults. Answering such questions is important for managers to establish a holistic recovery management system, starting with facilitation of complaints and ending with a successful service recovery. Finally, further research should take cohort effects into account. For instance, the young adults of the 2000s are likely to exhibit a consumption behavior that differs from the young adults’ behavior back in the 1950s. Cohort analysis is a method that allows separating the age effect from the cohort effect (Rentz et al., 1983). In the context at hand, social, psychological, and biological aging relate to age effects, while historical differences in socialization, cohort composition as well as genetic changes are supposed to be due to cohort effects (Reynolds and Rentz, 1981). All these causes are likely to influence the perception of complaint handling. By means of a longitudinal cohort study, which is based on repeated cross-sectional data, it would be possible to consider all relevant effects and to give implications for complaint-handling that are targeted at different generations.

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