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Consumer responses to service failures: Influence of procedural and interactional fairness perceptions
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Consumer Responses to Service Failures: Influence of Procedural and Interactional Fairness Perceptions Cathy Goodwin University of Manitoba
Ivan Ross University of Minnesota
This study suggests that consumer responses to service failures may be influenced by perceptions of procedural and interactional fairness. Procedural fairness is operationalized as the consumer’s opportunity to present information and express feelings, or “voice.” Interactional fairness is operationalized as an apology to the consumer. A 2 x 2 x 2 x 4 between-subjects experimental design manipulated levels of complaint outcome, apology, voice, and type of service. Apology and voice appeared to enhance fairness and satisfaction perceptions in the “favorable outcome” condition, when consumers were offered a discount or gift after service failure. When no tangible offering was made, apology and voice had lesser effect and in some instances were associated with lower perceptions of fairness and satisfaction. Implications for practitioners and researchers are discussed.
Introduction Within the last 10 years, both researchers and practitioners have demonstrated strong interest in consumer perceptions of service quality. Services are produced and consumed simultaneously, and service delivery frequently remains inseparable from human providers. Therefore, a specific service encounter can yield negative consumer reactions in even the most careful organization: flights and medical appointments are delayed, waiters serve food that wasn’t ordered, and hotels lose reservations. Realistically, firms cannot eliminate altogether the possibility of errors arising in service delivery; however, the firm’s response to a consumer’s post-consumption dissatisfaction may restore a level of satisfaction that will bring him/her back and lead to referrals for future transactions. Firms also wish to maintain good relations
Address correspondence to Professor Cathy Goodwin, Faculty of Management, Drake Centre, Winnipeg, Manitoba, Canada R3T2N2. Journal of Business Research 25, 149-163 (1992) 0 1992 Elsevier Science Publishing Co., Inc. 655 Avenue of the Americas, New York, NY 10010
University of Manitoba,
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0148.2963/92/$5.00
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with consumers to maintain their reputation within the business community and to meet ethical and social welfare criteria. To achieve this goal, management may offer an apology, a refund, performance of additional services at no charge, and/ or a gift of greater value than the customer’s perceived loss. Rudeness or politeness of communication accompanying whatever compensation is offered may also affect consumer perceptions of response adequacy. While consumer researchers have explored determinants of complaint behavior, less attention has been directed to the firm’s response options. Etzel and Silverman (1981) suggest that “secondary satisfaction” arising from complaint-handling may build even stronger loyalties than satisfaction with the initial service. Similarly, Best and Andreasen (1977) suggest that: “. . [I]t is not realistic to suppose that all complaints lead to corrective action that is acceptable to the complainer. Common experience suggests that many complaints are rejected by their recipients. Discovering what happens to the complaints that are voiced is fundamental to understanding the consumer complaint process.” Few researchers have examined consumer evaluation of complaint-handling. Some complaint researchers (e.g., Richins, 1979) assume that consumers respond positively to apologies and opportunities to express concerns to management. Some researchers (e.g., Krishnan and Valle, 1979; Valle and Walldendorf, 1977) have examined the effects of attributions on complaining. Folkes (1984) extended this line of research, relating the effects of attributions to consumer expectations of specific responses-apology, refund, or exchangeafter product failure. A theoretical framework is needed to clarify the relationship between the firm’s response to voiced complaints and the consumer’s subsequent attitude to the firm. This study suggests that equity theory, and specifically the component of equity theory known as “procedural justice,” may offer a useful framework to develop both research and practitioner understanding of these issues. Theconsumerwhoexperiences unacceptable quality of service deliverymayfeel that s/he has been “wronged” while purchasing or consuming the service. From an equity theoretic perspective, the consumer may be seen as a “victim” who has been “harmed” by the marketer and is now seeking reparation. The firm must respond to the consumer in acost-effectivewaythatwillsatisfytheconsumer. In this context, the consumer resembles a litigant who presents a civil case in a courtroom, where procedures are intended to leave even the “loser” with a feeling of fair treatment and continued faith in the institutional justice system. He or she also resembles an employee undergoing salary evaluation, where corporate procedures are intended to retain the employee’s loyalty regardless of the amount of salary increase. Like the court and the personnel department, the marketer would like the consumer to leave even a negative encounter feeling satisfied (or at least not dissatisfied) by the firm’s response to his/her complaint, and would also like the consumer to return to the same firm for future service. The procedural justice literature has examined litigant and employee perceptions of courts and employers following a variety of outcomes; therefore, an extension of this framework to consumer complaint resolution may provide insights into consumer response to this process.
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Equity Theory Although equity theory directly addresses outcomes of exchange processes, only limited applications have been found in the marketing literature (Huppertz et al., 1978). While a number of authors have found a relationship between perceived equity and consumer satisfaction (e.g., Swan et al., 1985; Fisk et al., 1984; Liechty and Churchill, 1979; Oliver and Swan, 1989), attention has focused on perceived relationships between inputs and outputs of transactions. For example, the consumer’s time and money can be evaluated as inputs, while the product or service received will be evaluated as an output.
Distributional Fairness An aspect of equity, distributional fairness, examines the way resources or rewards will be allocated among parties to a transaction. Some authors (Deutsch, 1975; Leventhal, 1976) have noted that allocation rules may vary from the input-output relationship suggested by Adams (1965) to an equality rule (give everyone the same level of reward regardless of input) or needs rule (allocate resources based on perceived needs). Regardless of allocation rules research consistently finds that people prefer greater rewards or resource amounts to lesser rewards or resource amounts (Walster et al., 1973). In a service complaint setting, resources or rewards represent the outcome of a consumer complaint, analogous to the dollar amount of a civil lawsuit. The consumer who receives a refund, compensation for lost time, or even a free gift may be said to experience a favorable outcome; on the other hand, a firm that refuses to compensate the consumer may create an outcome that will be perceived as unfavorable. Hypothesis 1: Outcomes of complaints about service failures will influence perceptions of fairness and satisfaction with the way the complaint was handled. Favorable outcomes will be more positively associated with fairness and satisfaction than unfavorable outcomes.
Procedural Fairness Current equity literature distinguishes distributional fairness from procedural fairness. Procedural fairness represents a standard that can be applied to processes used to settle conflicts. In a striking example, Lind and Tyler (1987) cite research findings that traffic offenders appearing in a Chicago court were often angry and dissatisfied when their cases were dismissed without a hearing, despite the seeming excellence of this outcome-no jail, fine, or violation record. While distributional fairness theories cannot explain these reactions, the procedural view suggests that people were dissatisfied because the court failed to meet their “standards of proper judicial process.” At the same time, procedural aspects of a judicial system or organization can allow citizens or employees to retain positive regard for these institutions when they might receive negative outcomes in specific trials or evaluations. Procedural fairness derives from: 1) the completeness of information collected, including the participant’s opportunity to add to the information or influence the
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order of presentation; 2) the decision-maker’s use of the information; and 3) the extent to which participants believe they influenced the outcome (Leventhal, 1976). Thus, fairness will not be obtained simply by the opportunity to present information, but by the opportunity to present information to a responsive decision-maker. This type of participatory presentation of information has been described frequently as “voice,” following Hirschman (1960). In examples from judicial, employment, and classroom settings, Tyler and Caine (1981) suggest that it is the opportunity for voice, rather than the outcome of a specific proceeding, that allows participants to continue to respect the institution and remain in the process despite an adverse outcome. A negative outcome that was obtained fairly apparently seems more tolerable than a negative outcome that ignored input from those being judged. Value-Expressive versus Functional Role of Voice. Two theories have been proposed to account for the importance of voice, based on Katz’s (1960) classification of attitudes. In the functional view, voice may enhance perceptions of fairness by influencing the outcome directly, while the value-expressive model suggests that the act of communicating one’s views offers a cathartic satisfaction. However, value expressive tends to be defined in terms of presenting information to a responsive listener rather than a passive one. When voice is allowed expression but deliberately ignored, the result may be a form of “sham” participation that may actually increase the frustration of the participants. In a complaint setting, voice may be recognized as the consumer’s opportunity to express feelings and opinions as well as present information that might affect the service firm’s choice of compensation (e.g., “The delay caused me to miss an important meeting”). Hypothesis
2: Voice can be expected to influence perceptions of fairness and satisfaction with the complaint-handling process. Opportunity for voice will be more positively associated with fairness and satisfaction than denial of opportunity for voice, regardless of outcome.
Interactional
Style
Introducing another aspect of fairness perception, Bies and Moag (1986) suggest that the interactional style used to obtain information and communicate outcomes will also affect perceptions of fairness. Studies of MBA students undergoing job interviews found that rude interviews and embarrassing or inappropriate questions led to increased perceptions of unfairness, regardless of whether the interview led to a job offer. One aspect of interactional fairness seems particularly relevant to complaint resolution. An apology, which represents a means of restoring psychological equity (Walster et al., 1973) can be expected to offset perceptions of rudeness or inappropriate behavior. Service providers are often encouraged to apologize even if they cannot offer any tangible compensation (Sellers, 1988). Hypothesis associated outcome.
3: A service provider’s expression with fairness and satisfaction than
of apology will be more positively an absence of apology regardless of
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An Empirical Study A 2 x 2 x 2 x 4 between-subjects experiment was conducted to explore the influence of distributive, procedural, and interactional fairness on consumer satisfaction, perceptions of fairness, perceptions of quality, and willingness to return to the firm for future service. Subjects were 28.5 undergraduate students attending urban universities in the midwest and the southeast; inasmuch as no significant differences attributable to location were detected, subjects were combined for all analyses. Forty-seven percent were males; average age was 24.6 years; average full-time work experience was 4 years. Subjects were asked to read a description of a service encounter in which delays in service might lower perceptions of service quality. Each subject was randomly assigned to one of 4 services (auto repair, vacation air travel, dental service, and restaurant meal service). Pre-tests suggested that these 4 services were commonly used by students, and incidents were created based on actual incidents described by other student subjects during pre-tests.
Experimental
Treatments
Scenario manipulations incorporated 2 levels of voice; the “high” represented an opportunity to present feelings and opinions to a whereas “low” voice represented denial of opportunity to present Two levels of outcome, favorable and unfavorable, represented tangible compensation, such as refunds. Two levels of apology-present were also included. As an example of treatment combinations, scenario read:
voice condition patient listener, an explanation. some versus no or absentthe auto repair
“The mechanic advises you that your car will be ready at 5:00 PM when the shop closes; however, when you arrive, you learn that the car won’t be ready till 4 PM tomorrow. You need the car to drive to an important appointment in the morning.” The mechanic listens patiently as you explain that you need the car [low voice: cuts you off as you try to explain that you need the car]. He says, “I am very sorry for this serious inconvenience” [sentence omitted in the “no apology” condition]. As compensation, you may have a 10% discount on the cost of repairs” [low outcome: “however, there is nothing that can be done at this time.“].
Two Likert-type items, indicating opportunity to express opinions and feelings, were included as a check on the voice manipulation. These items correlated strongly with each other (I = 0.86, p < O.OOOl), Scores were significantly different for high and low voice conditions (7.7 versus 3.2, p < O.OOOl), but were not significantly different for favorable and unfavorable outcomes, service, or apology. However, respondents may have confounded the low-voice and/or unfavorable outcome conditions with rudeness. A 5point Likert-type item, “The provider was rude ,” was included among the scales. The word “rudeness” did not appear in scenarios; therefore, responses to this question were attributions based on combinations of voice, service, apology, and outcome. Attributions of rudeness were significantly higher in low voice scenarios than high voice scenarios (3.4 versus 2.4, p < 0.0001). However, as rudeness was also evaluated significantly higher in unfavorable outcome scenarios (3.2 versus 2.6, p < 0.0003), this attribution does not seem to be tied only to the voice manipulation. Attributions of rudeness did not differ significantly in the apology and no-apology conditions, nor did they differ
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Table 1. Differences
among
Services’ Realism
Vacation air travel Restaurant meal Auto repair Dental service
and I. Ross
Problem Severity
4.1” 3.7” 4.1” 3.7”
‘Means with different letters significantly differ from one another Based on Scheffe test of multiple comparisons.
4.3” 4.W 42F 3.9h (p c 0.05)
significantly among services. Therefore, consumers may be responding to perceived discourtesy associated with denial or voice or with the statement, “There is nothing we can do.” Another potential source of respondent confusion comes from the use of scenarios as stimuli. It is desirable to calibrate scenarios of service encounters so that such aspects of complaint behavior as realism and problem severity are similar for all scenarios. Respondents were asked to estimate realism of scenarios on a 5-point scale (5 = “extremely realistic,” 1 = “not at all realistic”). Mean scores were 3.7 for dental and restaurant services, and 4.1 for auto repair and airline services (Table 1). Respondents seemed to find high voice scenarios slightly more realistic than low voice (4.0 versus 3.7, p < 0.03). Realism scores were nearly identical when levels of voice (4.0 versus 3.8) and apology (3.9 versus 3.8) were compared. Thus, respondents seemed to find all scenarios somewhat realistic, although some differences emerged across scenarios. To further estimate differences among the scenarios, respondents were asked to evaluate seriousness of the problem described. Due to the need to create realism, the delays in the airline and auto repair services involved several hours, as compared to several minutes in the restaurant and dentist scenarios. (See Appendix for a summary of scenarios.)
Dependent
Measures
Following each scenario, subjects responded to a series of Likert-type items that dealt with perceived fairness of complaint-handling as well as three aspects of satisfaction with the way the complaint was handled. Perceived fairness of complaint-handling was measured by four Likert-type items asking how subjects believed the provider decided to resolve the problem: company policy, logic and reasoning, arbitrariness (reverse scored), and “guided by sense of fair play.” Satisfaction with the way the complaint was handled was measured by summing three sets of two Likert-type items pertaining to consumer response to the complaint, perceptions of service quality, and repatronage. One set dealt with shortterm response to the complaint incident (“Overall, I was satisfied with the way my I got what I wanted” (Pearson r = 0.61, complaint was handled,” and, “Overall, p < 0.0001). The second set of items examined perceptions of service quality: “They really tried to help,” and “Service quality seemed high (Pearson r = 0.62, p < 0.0001). A third set related to willingness to return to the firm for future services. “I would be willing to use the firm’s services again,” and, “I would recommend the firm to others” (Pearson r = 0.82, p < 0.0001). In a factor analysis
Consumer
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Responses to Service Failures
Table 2. Dimensions
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of Fairness and Satisfaction Factor 1 (Satisfaction)
Overall I was satisfied with the way the complaint Overall I got what I wanted They really tried to help Service quality was high I would be willing to use the firm’s services again I would recommend the firm to others Provider followed company policy Provider used logic and reasoning Provider was arbitrary (reverse scored) Provider was guided by sense of fair play Principal
components
15.5
analysis
Two factors with eigenvalues
with varimax rotation. greater than 1.0 account
was handled
Factor 2 (Fairness)
0.74 0.74 0.74 0.71 0.78 0.84 0.77 0.72 0.69 0.65
for 62% of the variance.
combining all 10 scale items, the four fairness items loaded on one factor and the 6 satisfaction items on another. Therefore, consumer response to incident, perceptions of quality, and repatronage were incorporated into a variable called “Satisfaction.” The 2-factor solution accounted for 62% of the variance of these 10 variables comprising fairness and satisfaction (Table 2). Reliability estimates using Cronbach’s alpha were 0.74 for the fairness scale and 0.88 for satisfaction.
Results The dependent measures of fairness and satisfaction were significantly correlated (r = 0.43, p < 0.0001). Therefore, data were analyzed by a series of MANOVA’s followed by univariate ANOVAs. The large number of testable effects in this experiment implies that some apparently significant relationships may emerge by chance. Therefore, results are reported only when significance reaches p < 0.01. The effect of the scenario manipulations on fairness and satisfaction are summarized in Table 3. Main effects of voice and outcome are significant for both fairness and satisfaction. Main effects are significant for service only with respect to fairness, whereas main effects for apology are not significant for either fairness or service.
Perceived Fairness Main effects of voice, outcome, and service are significant for perceived fairness, whereas the main effect of apology was not. These main effects suggest support for Hypotheses 1 and 2, but not for Hypothesis 3. Although a number of significant interactions were identified, space constraints permit only a small number to be listed here. The interactions discussed are those that address the questions, “Can voice or apology compensate for unfavorable outcome?” and “Do these effects vary across services?” When aggregated across all services, the interaction between voice and outcome was significant (Fig 1, Table 3). The implication of the interaction is that the impact of voice is greater with positive outcome. Similar results reported in the social psychology literature (e.g., Folger, 1977; Folger et al., 1979) suggest that this result
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Table 3. Effect of Scenario Manipulations Factor
on Fairness and Satisfaction
Fairness
Voice Outcome Apology Service Voice”outcome Voice*service Voice*apology Outcome*service Outcome*apology Apology*service Voice*apology*service Voice*outcome*apology Voice*outcome*service Outcome*apology*service Outcome*voice*apology*service
12.29 55.43 NS 7.54” 25.82” 5.43’ 5.14h 15.66’ 19.31” 3.87” 2.97” 11 .X3” 10.04” 7.82“ 5.18”
Satisfaction 12.32” 26.76” 5.99h NS 16.99 3.34h 6.51” 4.94” 11.79” NS 2.38” X.73” 5.25” 3.02” 2.98”
Manova
Wilks Lambda 0.945” 0.825” NS 0.901” 0.756” 0.821” 0.91’)” 0.683” 0.802” 0.870” 0.777” 0.714 0.567” 0.635” 0.516”
Ap < 0.001
h/l <
0.01.
may be interpreted as a frustration effect; followed voice, subjects may have believed participation. The effect of an apology seems a greater effect on fairness perceptions when
that is, when no tangible outcome that they were allowed only “sham” similar to voice: an apology will have outcomes are favorable (Fig 2).
Perceived Satisfaction Main effects of voice and outcome are significant with respect to satisfaction; however, main effects of apology and service are not (Table 3). The interaction of voice and outcome is significant and similar to the interaction with respect to fairness. Interaction of voice and outcome was significant overall (Fig 3, Table 3). In general, voice appeared to enhance satisfaction if outcomes were favorable to a greater extent than if outcomes were unfavorable. Interaction of apology and FAIRNESS High Voice 95 90 8.5 80 7.5 7.0 65 6.0 I Unfavorable outcome
Figure 1.
I Favorable outcome
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157
FAIRNESS APOLOGY
9.5 9.0 9.5
NO APOLOGY
8.0
7.0 7.5 6.5 6.0
/
I Unfavorable Outcome
I Favorable Outcome
Figure 2. outcome was also significant overall (Fig 4, Table 3). An apology appeared to enhance satisfaction to a greater extent if outcomes were favorable than if no tangible outcome was offered, following the pattern described for voice-outcome interactions. Summary of Service Effects Table 4 summarizes main effects across service scenarios. Further investigation will be needed to understand why slightly lower fairness was associated with dental services than with the others. Outcome effects were significant in three of the four SATISFACTION
14.5
High vokx
14.0 13.5 13.0 12.5 12.0 11.5 11.0 10.5
VOlC0
10.0 9.5
Unfavorable Oulcome
Figure 3.
Favorable outcome
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SAW&
TION
14 5
APOLOGY
14 0 135 13 0 125 12.0 11.5 11.0 10.5
NO APOLOGY
10 0 9.5
Unfavorable Oulcome
Favorable Outcome
Figure 4.
Table 4. Service Main Effects Service
Fairness (F = 7.5, p i
Effect
.OOOl)
Satisfaction (F = .63. p < .60)
Dental service Airline service Auto mechanic Restaurant
6.9b 8.8 8.1” 8.W.”
11.0” 11.6 10.9” 12.0
Apology Dental service Airline Auto mechanic Restaurant
NS NS NS 3.81’
NS NS NS NS
Outcome Dental service Airline Auto mechanic Restaurant
F = 18.67 NS F = 12.81” F = 50.33”
NS F = 4.06 F = 5.30’ F = 20.48”
NS
NS NS F = 6.21’ F = 4.45
Voice Dental service Airline Auto mechanic Restaurant Means
with
ap< O.oKll. hp< 0.01. Cp< 0.05.
same letters
NS
NS NS do not
differ significantly from one another, using Scheffe test of multiple comparisons.
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Consumer Responses to Service Failures Table 5. Interaction
Effects
Service Effect Voice X outcome Dental service Airline Auto repair Restaurant
159
Fairness
Satisfaction
interaction
Apology x outcome Dental service Airline Auto repair Restaurant
F F F F
= = = =
6.5” 4.34b* 7.88”* 22.61”*
NS* F = 12.90”* NS* F = 10.61”*
F = 6.34”** NS** F = 4.17h** F = 20.10
NS** NS** NS** F = 8.48”**
interaction
ap < o.oGll1. bp< 0.01. *Voice effect is greater when outcome is high than when outcome is low. Probability that this effect would occur by chance in seven of eight independent events is 0.031, using binomial formula. **Apology effect is greater when outcome is high than when otcome is low. Probabilty that this effect would occur by chance in each of eight independent events is 0.031, using binomial formula.
services; apology effects significant only for perceptions of fairness in the restaurant scenarios; and voice effects significant only for satisfaction with auto mechanic and restaurant scenarios. Further investigation will be necessary to discover whether these differences in effects across services are due to chance or to unique characteristics of these services. Table 5 summarizes the 2 interaction effects discussed above by service categories. For all four services, fairness and satisfaction were at least slightly higher when tangible outcome or voice was present. Consistency was evaluated using the binomial distribution as a test of the likelihood of “k” occurrences in “n” independent events, where the null hypothesis is “equal chance of either direction.” Applying this formula, the probability is 0.004 that eight effects for each factor could occur in the same direction by chance. However, direction of the apology effect is not consistent across services. For dental, airline, and mechanic scenarios, fairness scores were identical for apology and no-apology conditions; for the mechanic scenario, satisfaction scores were identical for apology and no-apology conditions. Further investigation will be needed to determine whether apology effects are idiosyncratic to specific services or occurred by chance in this study. The voice-outcome interaction was significant for all 4 services with respect to fairness but were significant for satisfaction only in the case of airline and restaurant services. However, the pattern of the interaction remains the same: impact of voice is greater when a tangible outcome is offered than when no outcome is offered. When each service is considered as an independent event, the likelihood that this effect would occur by chance is 0.031, based on the binomial probability formula. The apology-outcome interaction is significant for 3 of the 4 services with respect to fairness, but significant only for fairness in the restaurant scenarios. However, as with the voice-outcome interaction, the pattern of the interaction was consistent from one service to another: with one exception, the impact of an apology was greater when a tangible outcome is offered than when no outcome is offered. When each service is considered as an independent event, the likelihood that this effect would occur by chance is 0.031, based on the binomial probability formula.
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Discussion and Implications The results of this study offer some support for the hypotheses.
Voice and apology will enhance perceptions of satisfaction and fairness. However, these perceptions will be enhanced to a greater extent when outcomes are favorable (Figs 1 to 4). These results suggest some implications for marketing managers, subject to the limitations noted below. Service and retail personnel may be trained to apologize and allow customers to communicate feelings and information freely, i.e., to “let off steam,” as suggested by Sellers (1988). This study suggests that such remedies will be more effective when accompanied by a tangible remedy than when presented as a substitute for a tangible offering. Moreover, tangible remedies need not be particularly high in order to please customers. In this study, consumers in the “favorable outcome” condition only read one scenario; without being asked to compare this outcome to the “unfavorable outcome” scenario read by other respondents, they consistently rated complaint resolution higher with respect to both fairness and satisfaction. This strong, consistent result suggests that a service provider might do better to offer even a small tangible token of restitution, such as a free drink or a small discount, supplemented by an apology. The lower impact of voice and apology on unfavorable outcomes may be explained by reports of the frustration effect identified in procedural fairness research. If a decision-maker ignores input when making the decision, the contributors of the input will receive their participation as “sham” or “pseudoparticipation” (Cohen, 1985). Some consumers may regard voice as “sham when expression of voice does not lead to a tangible outcome. participation” Similarly, an apology unaccompanied by a tangible outcome may be perceived as insincere. Therefore, service providers may wish to offer even token rewards whenever possible, rather than rely on apologies or extended opportunities for voice to mollify customers. One could also argue that procedural fairness considerations do not apply in a complaint setting, and that the analogy to a legal procedure is inappropriate. People acting as consumers rather than litigants want tangible responses to complaints because they have paid for the merchandise, because they are materialistic (Belk, 1985), or because tangible offerings are associated with sincerity (Katz, 1976). However, procedural fairness considerations have been applied to a variety of social interaction settings (Lind and Tyler, 1987). This study does suggest that people seem to prefer to obtain their positive outcomes by fair procedures rather than arbitrary rulings; their satisfaction is enhanced by voice or apology. Within marketing, this procedural fairness concept may be applicable to other areas with potential for conflict. For example, in a service setting, service managers are often required to allocate resources among consumers, ranging from order or service in a restaurant to boarding an overbooked airplane. Considerations of procedural fairness may influence the consumer’s satisfaction with the allocation process. Additionally, channel conflict has been studied extensively. Decisionmaking by a channel leader may be studied in a procedural fairness context. For example, fairness of allocation of resources to franchises or allocation of shelf space in a retail setting may influence each channel member’s satisfaction with the channel relationship.
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Limitations Results should be interpreted with caution appropriate to the use of student subjects in a pencil-and-paper experiment. It is expected that the sacrifice of limitations in external validity are offset by gains in control of the various components of the transaction. Additionally, the findings may be applicable to a relatively narrow range of service failures. While the services studied here were diverse, the consequences associated with provider-created delays were not particularly severe or lifethreatening. Consumers can be expected to demonstrate a different response pattern to delays or other failures with greater severity or impact. Implications
for Future Research
Several directions for future research are suggested. First, although this study has examined only 2 levels of each possible component of complaint resolution, additional levels can be offered. Future research questions include: What is the “minimum tangible reward” that must be offered to make a difference in consumer perceptions? Would a 2%) 5%) or 10% discount be sufficient to generate significant differences in consumer response? What elements of voice will increase perceptions of fairness and enhance satisfaction? How responsive must a provider be in order to generate a “high voice” perception? Second, further research might investigate what aspects of the service encounter account for some of the differences in responses. Solomon et al. (1985) noted that roles of service providers differ among services, suggesting that psychological aspects of service encounters might account for variations in consumer responses to marketing stimuli. Goodwin and Verhage (1990) found that complaint propensities seemed to be influenced by specific psychological dimensions. Therefore, further research seems warranted to identify aspects of dyadic interaction that may vary from one service to another, with corresponding influences on consumer behavior. Additionally, salient concerns may differ among consumers, depending on whether the source of complaint is a product or a service. A tangible product, such as a cake mix, can be replaced immediately; a service such as a haircut cannot. Waiting time is lost forever, although it can be compensated. A service may be analogous to a tangible product purchased for a special occasion; a defective Christmas gift can be exchanged later, but characteristics of the situation make a completely even exchange impossible: the product can’t be used on Christmas Day. Thus, further research is warranted to assess the effects of differences between products and services on consumer satisfaction with complaint resolution. The authors gratefully acknowledge comments from Valerie Folkes, Dave Schumann, and Murphy Sewall. This research was supported by the Department of Marketing, Georgia State University; the School of Management, University of Alaska; and the Carlson School of Management, University of Minnesota.
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Appendix:
Summary
C. Goodwin of Scenarios
Presented
Service
to Respondents
Problem delay
while
dentist
and I. Ross
Favorable
Dental
50-minute
sees
another
Airline Auto mechanic Restaurant
patient Overnight delay due to overbooking by airline One day delay due because car is not ready 15-minute delay while waiters serve others
10%
discount
Response
on bill for this visit
Pay for hotel and meals that evening 10% discount on bill for these repairs Free meal next visit
In all cases, unfavorable response was, “There is nothing we can do at this time.” Apology manipulation included the statement, “I am very sorry for the serious inconvenience.” this statement was omitted.
In the no-apology
condition,
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Folger, Robert, Rosenfield, David, and Robinson, Thomas, Relative Deprivation and Procedural Justice, Journal of Personality and Social Psychology 45 (2, 1983): 268-273. Folkes, Valerie, Consumer Reactions to Product Failures: An Attributional Journal of Consumer Research 10 (March 1984): 398-409.
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Goodwin, Cathy, and Verhage, BronisIaw J., Role Perceptions of Services: A Cross-Cultural Comparison with Behavioral Implications, Journal of Economic Psychology 10 (December 1989): 2-16. Hirschman, 1960
A. O., Exit, Voice and Loyalty, Harvard
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Huppertz, John W., Arenson, Sidney J., and Evans, Richard S., An Application of Equity Theory to Buyer-Seller Exchange Situations, Journal of Marketing Research 1.5 (May 1978): 250-260. Katz, Judith Milstein, How Do You Love Me? Let Me Count the Ways, (The Phenomenology of Being Loved), Sociological Inquiry 46 (1, 1976): 17-22. Katz, Daniel, The Functional 24 (1960): 163-204.
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S., Fairness in Social Relationships, General
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Complaint ed., Asso-
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Liechty, Margaret G., and Churchill, Gilbert A., Conceptual Insights into Consumer Satisfaction with Services, in 1979 Educators’ Conference Proceedings, N. Beckwith et al., eds., American Marketing Association, Chicago. 1979, pp. 509-515. Lind, E. Allan, and Lissak, Robin I., Apparent Impropriety and Procedural ments, Journal of Experimental Social Psychology 21 (1985): 19-29. Lind, E. A., and Tyler, Tom, New York. 1987.
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The Social Psychology of Procedural Justice, Plenum
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Oliver, Richard L., and Swan, John E., Consumer Perceptions of Interpersonal Equity and Satisfaction in Transactions: A Field Survey Approach, Journal of Marketing 53 (April 1989): 21-35. Richins, Marsha L., Consumer Perceptions of Costs and Benefits Associated with Complaining, Advances in Consumer Research, Association for Consumer Research, 1979, pp. 50-53. Sellers,
Patricia,
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Solomon, Michael R., Surprenant, Carol, Czepiel, John A., and Gutman, Evelyn G., A Role Theory Perspective on Dyadic Interactions: The Service Encounter, Journal of Marketing 49 (Winter 1985): 99-111. Swan, John E., Sawyer, Jesse C., Van Maitre, Joseph G., and McGee, the Understanding of Hospital Patient Satisfaction: Fulfillment Journal of Health Care Marketing 5 (Summer 1985): 7-18.
Gail W., Deepening and Equity Effects,
Tyler, Tom R., and Caine, A., The Influence of Outcomes and Procedures on Satisfaction with Formal Leaders, Journal of Personality and Social Psychology 41 (1981): 642-655. Valle, Valerie A., and Wallendorf, Melanie, Product Satisfaction and Dissatisfaction, Complaining Behavior Ralph L. Day, Bloomington, IN. 1977.
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Walster, Elaine, Berscheid, E., and Walster, G., New Directions of Personality and Social Psychology 25 (1973): 151-176.
in Equity Research,
Journal
149
Consumer Responses to Service Failures: Influence of Procedural and Interactional Fairness Perceptions Cathy Goodwin University of Manitoba
Ivan Ross University of Minnesota
This study suggests that consumer responses to service failures may be influenced by perceptions of procedural and interactional fairness. Procedural fairness is operationalized as the consumer’s opportunity to present information and express feelings, or “voice.” Interactional fairness is operationalized as an apology to the consumer. A 2 x 2 x 2 x 4 between-subjects experimental design manipulated levels of complaint outcome, apology, voice, and type of service. Apology and voice appeared to enhance fairness and satisfaction perceptions in the “favorable outcome” condition, when consumers were offered a discount or gift after service failure. When no tangible offering was made, apology and voice had lesser effect and in some instances were associated with lower perceptions of fairness and satisfaction. Implications for practitioners and researchers are discussed.
Introduction Within the last 10 years, both researchers and practitioners have demonstrated strong interest in consumer perceptions of service quality. Services are produced and consumed simultaneously, and service delivery frequently remains inseparable from human providers. Therefore, a specific service encounter can yield negative consumer reactions in even the most careful organization: flights and medical appointments are delayed, waiters serve food that wasn’t ordered, and hotels lose reservations. Realistically, firms cannot eliminate altogether the possibility of errors arising in service delivery; however, the firm’s response to a consumer’s post-consumption dissatisfaction may restore a level of satisfaction that will bring him/her back and lead to referrals for future transactions. Firms also wish to maintain good relations
Address correspondence to Professor Cathy Goodwin, Faculty of Management, Drake Centre, Winnipeg, Manitoba, Canada R3T2N2. Journal of Business Research 25, 149-163 (1992) 0 1992 Elsevier Science Publishing Co., Inc. 655 Avenue of the Americas, New York, NY 10010
University of Manitoba,
448
0148.2963/92/$5.00
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and I. Ross
with consumers to maintain their reputation within the business community and to meet ethical and social welfare criteria. To achieve this goal, management may offer an apology, a refund, performance of additional services at no charge, and/ or a gift of greater value than the customer’s perceived loss. Rudeness or politeness of communication accompanying whatever compensation is offered may also affect consumer perceptions of response adequacy. While consumer researchers have explored determinants of complaint behavior, less attention has been directed to the firm’s response options. Etzel and Silverman (1981) suggest that “secondary satisfaction” arising from complaint-handling may build even stronger loyalties than satisfaction with the initial service. Similarly, Best and Andreasen (1977) suggest that: “. . [I]t is not realistic to suppose that all complaints lead to corrective action that is acceptable to the complainer. Common experience suggests that many complaints are rejected by their recipients. Discovering what happens to the complaints that are voiced is fundamental to understanding the consumer complaint process.” Few researchers have examined consumer evaluation of complaint-handling. Some complaint researchers (e.g., Richins, 1979) assume that consumers respond positively to apologies and opportunities to express concerns to management. Some researchers (e.g., Krishnan and Valle, 1979; Valle and Walldendorf, 1977) have examined the effects of attributions on complaining. Folkes (1984) extended this line of research, relating the effects of attributions to consumer expectations of specific responses-apology, refund, or exchangeafter product failure. A theoretical framework is needed to clarify the relationship between the firm’s response to voiced complaints and the consumer’s subsequent attitude to the firm. This study suggests that equity theory, and specifically the component of equity theory known as “procedural justice,” may offer a useful framework to develop both research and practitioner understanding of these issues. Theconsumerwhoexperiences unacceptable quality of service deliverymayfeel that s/he has been “wronged” while purchasing or consuming the service. From an equity theoretic perspective, the consumer may be seen as a “victim” who has been “harmed” by the marketer and is now seeking reparation. The firm must respond to the consumer in acost-effectivewaythatwillsatisfytheconsumer. In this context, the consumer resembles a litigant who presents a civil case in a courtroom, where procedures are intended to leave even the “loser” with a feeling of fair treatment and continued faith in the institutional justice system. He or she also resembles an employee undergoing salary evaluation, where corporate procedures are intended to retain the employee’s loyalty regardless of the amount of salary increase. Like the court and the personnel department, the marketer would like the consumer to leave even a negative encounter feeling satisfied (or at least not dissatisfied) by the firm’s response to his/her complaint, and would also like the consumer to return to the same firm for future service. The procedural justice literature has examined litigant and employee perceptions of courts and employers following a variety of outcomes; therefore, an extension of this framework to consumer complaint resolution may provide insights into consumer response to this process.
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Equity Theory Although equity theory directly addresses outcomes of exchange processes, only limited applications have been found in the marketing literature (Huppertz et al., 1978). While a number of authors have found a relationship between perceived equity and consumer satisfaction (e.g., Swan et al., 1985; Fisk et al., 1984; Liechty and Churchill, 1979; Oliver and Swan, 1989), attention has focused on perceived relationships between inputs and outputs of transactions. For example, the consumer’s time and money can be evaluated as inputs, while the product or service received will be evaluated as an output.
Distributional Fairness An aspect of equity, distributional fairness, examines the way resources or rewards will be allocated among parties to a transaction. Some authors (Deutsch, 1975; Leventhal, 1976) have noted that allocation rules may vary from the input-output relationship suggested by Adams (1965) to an equality rule (give everyone the same level of reward regardless of input) or needs rule (allocate resources based on perceived needs). Regardless of allocation rules research consistently finds that people prefer greater rewards or resource amounts to lesser rewards or resource amounts (Walster et al., 1973). In a service complaint setting, resources or rewards represent the outcome of a consumer complaint, analogous to the dollar amount of a civil lawsuit. The consumer who receives a refund, compensation for lost time, or even a free gift may be said to experience a favorable outcome; on the other hand, a firm that refuses to compensate the consumer may create an outcome that will be perceived as unfavorable. Hypothesis 1: Outcomes of complaints about service failures will influence perceptions of fairness and satisfaction with the way the complaint was handled. Favorable outcomes will be more positively associated with fairness and satisfaction than unfavorable outcomes.
Procedural Fairness Current equity literature distinguishes distributional fairness from procedural fairness. Procedural fairness represents a standard that can be applied to processes used to settle conflicts. In a striking example, Lind and Tyler (1987) cite research findings that traffic offenders appearing in a Chicago court were often angry and dissatisfied when their cases were dismissed without a hearing, despite the seeming excellence of this outcome-no jail, fine, or violation record. While distributional fairness theories cannot explain these reactions, the procedural view suggests that people were dissatisfied because the court failed to meet their “standards of proper judicial process.” At the same time, procedural aspects of a judicial system or organization can allow citizens or employees to retain positive regard for these institutions when they might receive negative outcomes in specific trials or evaluations. Procedural fairness derives from: 1) the completeness of information collected, including the participant’s opportunity to add to the information or influence the
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order of presentation; 2) the decision-maker’s use of the information; and 3) the extent to which participants believe they influenced the outcome (Leventhal, 1976). Thus, fairness will not be obtained simply by the opportunity to present information, but by the opportunity to present information to a responsive decision-maker. This type of participatory presentation of information has been described frequently as “voice,” following Hirschman (1960). In examples from judicial, employment, and classroom settings, Tyler and Caine (1981) suggest that it is the opportunity for voice, rather than the outcome of a specific proceeding, that allows participants to continue to respect the institution and remain in the process despite an adverse outcome. A negative outcome that was obtained fairly apparently seems more tolerable than a negative outcome that ignored input from those being judged. Value-Expressive versus Functional Role of Voice. Two theories have been proposed to account for the importance of voice, based on Katz’s (1960) classification of attitudes. In the functional view, voice may enhance perceptions of fairness by influencing the outcome directly, while the value-expressive model suggests that the act of communicating one’s views offers a cathartic satisfaction. However, value expressive tends to be defined in terms of presenting information to a responsive listener rather than a passive one. When voice is allowed expression but deliberately ignored, the result may be a form of “sham” participation that may actually increase the frustration of the participants. In a complaint setting, voice may be recognized as the consumer’s opportunity to express feelings and opinions as well as present information that might affect the service firm’s choice of compensation (e.g., “The delay caused me to miss an important meeting”). Hypothesis
2: Voice can be expected to influence perceptions of fairness and satisfaction with the complaint-handling process. Opportunity for voice will be more positively associated with fairness and satisfaction than denial of opportunity for voice, regardless of outcome.
Interactional
Style
Introducing another aspect of fairness perception, Bies and Moag (1986) suggest that the interactional style used to obtain information and communicate outcomes will also affect perceptions of fairness. Studies of MBA students undergoing job interviews found that rude interviews and embarrassing or inappropriate questions led to increased perceptions of unfairness, regardless of whether the interview led to a job offer. One aspect of interactional fairness seems particularly relevant to complaint resolution. An apology, which represents a means of restoring psychological equity (Walster et al., 1973) can be expected to offset perceptions of rudeness or inappropriate behavior. Service providers are often encouraged to apologize even if they cannot offer any tangible compensation (Sellers, 1988). Hypothesis associated outcome.
3: A service provider’s expression with fairness and satisfaction than
of apology will be more positively an absence of apology regardless of
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An Empirical Study A 2 x 2 x 2 x 4 between-subjects experiment was conducted to explore the influence of distributive, procedural, and interactional fairness on consumer satisfaction, perceptions of fairness, perceptions of quality, and willingness to return to the firm for future service. Subjects were 28.5 undergraduate students attending urban universities in the midwest and the southeast; inasmuch as no significant differences attributable to location were detected, subjects were combined for all analyses. Forty-seven percent were males; average age was 24.6 years; average full-time work experience was 4 years. Subjects were asked to read a description of a service encounter in which delays in service might lower perceptions of service quality. Each subject was randomly assigned to one of 4 services (auto repair, vacation air travel, dental service, and restaurant meal service). Pre-tests suggested that these 4 services were commonly used by students, and incidents were created based on actual incidents described by other student subjects during pre-tests.
Experimental
Treatments
Scenario manipulations incorporated 2 levels of voice; the “high” represented an opportunity to present feelings and opinions to a whereas “low” voice represented denial of opportunity to present Two levels of outcome, favorable and unfavorable, represented tangible compensation, such as refunds. Two levels of apology-present were also included. As an example of treatment combinations, scenario read:
voice condition patient listener, an explanation. some versus no or absentthe auto repair
“The mechanic advises you that your car will be ready at 5:00 PM when the shop closes; however, when you arrive, you learn that the car won’t be ready till 4 PM tomorrow. You need the car to drive to an important appointment in the morning.” The mechanic listens patiently as you explain that you need the car [low voice: cuts you off as you try to explain that you need the car]. He says, “I am very sorry for this serious inconvenience” [sentence omitted in the “no apology” condition]. As compensation, you may have a 10% discount on the cost of repairs” [low outcome: “however, there is nothing that can be done at this time.“].
Two Likert-type items, indicating opportunity to express opinions and feelings, were included as a check on the voice manipulation. These items correlated strongly with each other (I = 0.86, p < O.OOOl), Scores were significantly different for high and low voice conditions (7.7 versus 3.2, p < O.OOOl), but were not significantly different for favorable and unfavorable outcomes, service, or apology. However, respondents may have confounded the low-voice and/or unfavorable outcome conditions with rudeness. A 5point Likert-type item, “The provider was rude ,” was included among the scales. The word “rudeness” did not appear in scenarios; therefore, responses to this question were attributions based on combinations of voice, service, apology, and outcome. Attributions of rudeness were significantly higher in low voice scenarios than high voice scenarios (3.4 versus 2.4, p < 0.0001). However, as rudeness was also evaluated significantly higher in unfavorable outcome scenarios (3.2 versus 2.6, p < 0.0003), this attribution does not seem to be tied only to the voice manipulation. Attributions of rudeness did not differ significantly in the apology and no-apology conditions, nor did they differ
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Table 1. Differences
among
Services’ Realism
Vacation air travel Restaurant meal Auto repair Dental service
and I. Ross
Problem Severity
4.1” 3.7” 4.1” 3.7”
‘Means with different letters significantly differ from one another Based on Scheffe test of multiple comparisons.
4.3” 4.W 42F 3.9h (p c 0.05)
significantly among services. Therefore, consumers may be responding to perceived discourtesy associated with denial or voice or with the statement, “There is nothing we can do.” Another potential source of respondent confusion comes from the use of scenarios as stimuli. It is desirable to calibrate scenarios of service encounters so that such aspects of complaint behavior as realism and problem severity are similar for all scenarios. Respondents were asked to estimate realism of scenarios on a 5-point scale (5 = “extremely realistic,” 1 = “not at all realistic”). Mean scores were 3.7 for dental and restaurant services, and 4.1 for auto repair and airline services (Table 1). Respondents seemed to find high voice scenarios slightly more realistic than low voice (4.0 versus 3.7, p < 0.03). Realism scores were nearly identical when levels of voice (4.0 versus 3.8) and apology (3.9 versus 3.8) were compared. Thus, respondents seemed to find all scenarios somewhat realistic, although some differences emerged across scenarios. To further estimate differences among the scenarios, respondents were asked to evaluate seriousness of the problem described. Due to the need to create realism, the delays in the airline and auto repair services involved several hours, as compared to several minutes in the restaurant and dentist scenarios. (See Appendix for a summary of scenarios.)
Dependent
Measures
Following each scenario, subjects responded to a series of Likert-type items that dealt with perceived fairness of complaint-handling as well as three aspects of satisfaction with the way the complaint was handled. Perceived fairness of complaint-handling was measured by four Likert-type items asking how subjects believed the provider decided to resolve the problem: company policy, logic and reasoning, arbitrariness (reverse scored), and “guided by sense of fair play.” Satisfaction with the way the complaint was handled was measured by summing three sets of two Likert-type items pertaining to consumer response to the complaint, perceptions of service quality, and repatronage. One set dealt with shortterm response to the complaint incident (“Overall, I was satisfied with the way my I got what I wanted” (Pearson r = 0.61, complaint was handled,” and, “Overall, p < 0.0001). The second set of items examined perceptions of service quality: “They really tried to help,” and “Service quality seemed high (Pearson r = 0.62, p < 0.0001). A third set related to willingness to return to the firm for future services. “I would be willing to use the firm’s services again,” and, “I would recommend the firm to others” (Pearson r = 0.82, p < 0.0001). In a factor analysis
Consumer
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Responses to Service Failures
Table 2. Dimensions
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of Fairness and Satisfaction Factor 1 (Satisfaction)
Overall I was satisfied with the way the complaint Overall I got what I wanted They really tried to help Service quality was high I would be willing to use the firm’s services again I would recommend the firm to others Provider followed company policy Provider used logic and reasoning Provider was arbitrary (reverse scored) Provider was guided by sense of fair play Principal
components
15.5
analysis
Two factors with eigenvalues
with varimax rotation. greater than 1.0 account
was handled
Factor 2 (Fairness)
0.74 0.74 0.74 0.71 0.78 0.84 0.77 0.72 0.69 0.65
for 62% of the variance.
combining all 10 scale items, the four fairness items loaded on one factor and the 6 satisfaction items on another. Therefore, consumer response to incident, perceptions of quality, and repatronage were incorporated into a variable called “Satisfaction.” The 2-factor solution accounted for 62% of the variance of these 10 variables comprising fairness and satisfaction (Table 2). Reliability estimates using Cronbach’s alpha were 0.74 for the fairness scale and 0.88 for satisfaction.
Results The dependent measures of fairness and satisfaction were significantly correlated (r = 0.43, p < 0.0001). Therefore, data were analyzed by a series of MANOVA’s followed by univariate ANOVAs. The large number of testable effects in this experiment implies that some apparently significant relationships may emerge by chance. Therefore, results are reported only when significance reaches p < 0.01. The effect of the scenario manipulations on fairness and satisfaction are summarized in Table 3. Main effects of voice and outcome are significant for both fairness and satisfaction. Main effects are significant for service only with respect to fairness, whereas main effects for apology are not significant for either fairness or service.
Perceived Fairness Main effects of voice, outcome, and service are significant for perceived fairness, whereas the main effect of apology was not. These main effects suggest support for Hypotheses 1 and 2, but not for Hypothesis 3. Although a number of significant interactions were identified, space constraints permit only a small number to be listed here. The interactions discussed are those that address the questions, “Can voice or apology compensate for unfavorable outcome?” and “Do these effects vary across services?” When aggregated across all services, the interaction between voice and outcome was significant (Fig 1, Table 3). The implication of the interaction is that the impact of voice is greater with positive outcome. Similar results reported in the social psychology literature (e.g., Folger, 1977; Folger et al., 1979) suggest that this result
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Table 3. Effect of Scenario Manipulations Factor
on Fairness and Satisfaction
Fairness
Voice Outcome Apology Service Voice”outcome Voice*service Voice*apology Outcome*service Outcome*apology Apology*service Voice*apology*service Voice*outcome*apology Voice*outcome*service Outcome*apology*service Outcome*voice*apology*service
12.29 55.43 NS 7.54” 25.82” 5.43’ 5.14h 15.66’ 19.31” 3.87” 2.97” 11 .X3” 10.04” 7.82“ 5.18”
Satisfaction 12.32” 26.76” 5.99h NS 16.99 3.34h 6.51” 4.94” 11.79” NS 2.38” X.73” 5.25” 3.02” 2.98”
Manova
Wilks Lambda 0.945” 0.825” NS 0.901” 0.756” 0.821” 0.91’)” 0.683” 0.802” 0.870” 0.777” 0.714 0.567” 0.635” 0.516”
Ap < 0.001
h/l <
0.01.
may be interpreted as a frustration effect; followed voice, subjects may have believed participation. The effect of an apology seems a greater effect on fairness perceptions when
that is, when no tangible outcome that they were allowed only “sham” similar to voice: an apology will have outcomes are favorable (Fig 2).
Perceived Satisfaction Main effects of voice and outcome are significant with respect to satisfaction; however, main effects of apology and service are not (Table 3). The interaction of voice and outcome is significant and similar to the interaction with respect to fairness. Interaction of voice and outcome was significant overall (Fig 3, Table 3). In general, voice appeared to enhance satisfaction if outcomes were favorable to a greater extent than if outcomes were unfavorable. Interaction of apology and FAIRNESS High Voice 95 90 8.5 80 7.5 7.0 65 6.0 I Unfavorable outcome
Figure 1.
I Favorable outcome
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157
FAIRNESS APOLOGY
9.5 9.0 9.5
NO APOLOGY
8.0
7.0 7.5 6.5 6.0
/
I Unfavorable Outcome
I Favorable Outcome
Figure 2. outcome was also significant overall (Fig 4, Table 3). An apology appeared to enhance satisfaction to a greater extent if outcomes were favorable than if no tangible outcome was offered, following the pattern described for voice-outcome interactions. Summary of Service Effects Table 4 summarizes main effects across service scenarios. Further investigation will be needed to understand why slightly lower fairness was associated with dental services than with the others. Outcome effects were significant in three of the four SATISFACTION
14.5
High vokx
14.0 13.5 13.0 12.5 12.0 11.5 11.0 10.5
VOlC0
10.0 9.5
Unfavorable Oulcome
Figure 3.
Favorable outcome
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SAW&
TION
14 5
APOLOGY
14 0 135 13 0 125 12.0 11.5 11.0 10.5
NO APOLOGY
10 0 9.5
Unfavorable Oulcome
Favorable Outcome
Figure 4.
Table 4. Service Main Effects Service
Fairness (F = 7.5, p i
Effect
.OOOl)
Satisfaction (F = .63. p < .60)
Dental service Airline service Auto mechanic Restaurant
6.9b 8.8 8.1” 8.W.”
11.0” 11.6 10.9” 12.0
Apology Dental service Airline Auto mechanic Restaurant
NS NS NS 3.81’
NS NS NS NS
Outcome Dental service Airline Auto mechanic Restaurant
F = 18.67 NS F = 12.81” F = 50.33”
NS F = 4.06 F = 5.30’ F = 20.48”
NS
NS NS F = 6.21’ F = 4.45
Voice Dental service Airline Auto mechanic Restaurant Means
with
ap< O.oKll. hp< 0.01. Cp< 0.05.
same letters
NS
NS NS do not
differ significantly from one another, using Scheffe test of multiple comparisons.
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Consumer Responses to Service Failures Table 5. Interaction
Effects
Service Effect Voice X outcome Dental service Airline Auto repair Restaurant
159
Fairness
Satisfaction
interaction
Apology x outcome Dental service Airline Auto repair Restaurant
F F F F
= = = =
6.5” 4.34b* 7.88”* 22.61”*
NS* F = 12.90”* NS* F = 10.61”*
F = 6.34”** NS** F = 4.17h** F = 20.10
NS** NS** NS** F = 8.48”**
interaction
ap < o.oGll1. bp< 0.01. *Voice effect is greater when outcome is high than when outcome is low. Probability that this effect would occur by chance in seven of eight independent events is 0.031, using binomial formula. **Apology effect is greater when outcome is high than when otcome is low. Probabilty that this effect would occur by chance in each of eight independent events is 0.031, using binomial formula.
services; apology effects significant only for perceptions of fairness in the restaurant scenarios; and voice effects significant only for satisfaction with auto mechanic and restaurant scenarios. Further investigation will be necessary to discover whether these differences in effects across services are due to chance or to unique characteristics of these services. Table 5 summarizes the 2 interaction effects discussed above by service categories. For all four services, fairness and satisfaction were at least slightly higher when tangible outcome or voice was present. Consistency was evaluated using the binomial distribution as a test of the likelihood of “k” occurrences in “n” independent events, where the null hypothesis is “equal chance of either direction.” Applying this formula, the probability is 0.004 that eight effects for each factor could occur in the same direction by chance. However, direction of the apology effect is not consistent across services. For dental, airline, and mechanic scenarios, fairness scores were identical for apology and no-apology conditions; for the mechanic scenario, satisfaction scores were identical for apology and no-apology conditions. Further investigation will be needed to determine whether apology effects are idiosyncratic to specific services or occurred by chance in this study. The voice-outcome interaction was significant for all 4 services with respect to fairness but were significant for satisfaction only in the case of airline and restaurant services. However, the pattern of the interaction remains the same: impact of voice is greater when a tangible outcome is offered than when no outcome is offered. When each service is considered as an independent event, the likelihood that this effect would occur by chance is 0.031, based on the binomial probability formula. The apology-outcome interaction is significant for 3 of the 4 services with respect to fairness, but significant only for fairness in the restaurant scenarios. However, as with the voice-outcome interaction, the pattern of the interaction was consistent from one service to another: with one exception, the impact of an apology was greater when a tangible outcome is offered than when no outcome is offered. When each service is considered as an independent event, the likelihood that this effect would occur by chance is 0.031, based on the binomial probability formula.
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Discussion and Implications The results of this study offer some support for the hypotheses.
Voice and apology will enhance perceptions of satisfaction and fairness. However, these perceptions will be enhanced to a greater extent when outcomes are favorable (Figs 1 to 4). These results suggest some implications for marketing managers, subject to the limitations noted below. Service and retail personnel may be trained to apologize and allow customers to communicate feelings and information freely, i.e., to “let off steam,” as suggested by Sellers (1988). This study suggests that such remedies will be more effective when accompanied by a tangible remedy than when presented as a substitute for a tangible offering. Moreover, tangible remedies need not be particularly high in order to please customers. In this study, consumers in the “favorable outcome” condition only read one scenario; without being asked to compare this outcome to the “unfavorable outcome” scenario read by other respondents, they consistently rated complaint resolution higher with respect to both fairness and satisfaction. This strong, consistent result suggests that a service provider might do better to offer even a small tangible token of restitution, such as a free drink or a small discount, supplemented by an apology. The lower impact of voice and apology on unfavorable outcomes may be explained by reports of the frustration effect identified in procedural fairness research. If a decision-maker ignores input when making the decision, the contributors of the input will receive their participation as “sham” or “pseudoparticipation” (Cohen, 1985). Some consumers may regard voice as “sham when expression of voice does not lead to a tangible outcome. participation” Similarly, an apology unaccompanied by a tangible outcome may be perceived as insincere. Therefore, service providers may wish to offer even token rewards whenever possible, rather than rely on apologies or extended opportunities for voice to mollify customers. One could also argue that procedural fairness considerations do not apply in a complaint setting, and that the analogy to a legal procedure is inappropriate. People acting as consumers rather than litigants want tangible responses to complaints because they have paid for the merchandise, because they are materialistic (Belk, 1985), or because tangible offerings are associated with sincerity (Katz, 1976). However, procedural fairness considerations have been applied to a variety of social interaction settings (Lind and Tyler, 1987). This study does suggest that people seem to prefer to obtain their positive outcomes by fair procedures rather than arbitrary rulings; their satisfaction is enhanced by voice or apology. Within marketing, this procedural fairness concept may be applicable to other areas with potential for conflict. For example, in a service setting, service managers are often required to allocate resources among consumers, ranging from order or service in a restaurant to boarding an overbooked airplane. Considerations of procedural fairness may influence the consumer’s satisfaction with the allocation process. Additionally, channel conflict has been studied extensively. Decisionmaking by a channel leader may be studied in a procedural fairness context. For example, fairness of allocation of resources to franchises or allocation of shelf space in a retail setting may influence each channel member’s satisfaction with the channel relationship.
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Limitations Results should be interpreted with caution appropriate to the use of student subjects in a pencil-and-paper experiment. It is expected that the sacrifice of limitations in external validity are offset by gains in control of the various components of the transaction. Additionally, the findings may be applicable to a relatively narrow range of service failures. While the services studied here were diverse, the consequences associated with provider-created delays were not particularly severe or lifethreatening. Consumers can be expected to demonstrate a different response pattern to delays or other failures with greater severity or impact. Implications
for Future Research
Several directions for future research are suggested. First, although this study has examined only 2 levels of each possible component of complaint resolution, additional levels can be offered. Future research questions include: What is the “minimum tangible reward” that must be offered to make a difference in consumer perceptions? Would a 2%) 5%) or 10% discount be sufficient to generate significant differences in consumer response? What elements of voice will increase perceptions of fairness and enhance satisfaction? How responsive must a provider be in order to generate a “high voice” perception? Second, further research might investigate what aspects of the service encounter account for some of the differences in responses. Solomon et al. (1985) noted that roles of service providers differ among services, suggesting that psychological aspects of service encounters might account for variations in consumer responses to marketing stimuli. Goodwin and Verhage (1990) found that complaint propensities seemed to be influenced by specific psychological dimensions. Therefore, further research seems warranted to identify aspects of dyadic interaction that may vary from one service to another, with corresponding influences on consumer behavior. Additionally, salient concerns may differ among consumers, depending on whether the source of complaint is a product or a service. A tangible product, such as a cake mix, can be replaced immediately; a service such as a haircut cannot. Waiting time is lost forever, although it can be compensated. A service may be analogous to a tangible product purchased for a special occasion; a defective Christmas gift can be exchanged later, but characteristics of the situation make a completely even exchange impossible: the product can’t be used on Christmas Day. Thus, further research is warranted to assess the effects of differences between products and services on consumer satisfaction with complaint resolution. The authors gratefully acknowledge comments from Valerie Folkes, Dave Schumann, and Murphy Sewall. This research was supported by the Department of Marketing, Georgia State University; the School of Management, University of Alaska; and the Carlson School of Management, University of Minnesota.
J BUN RES 1992:25:149-163
162
Appendix:
Summary
C. Goodwin of Scenarios
Presented
Service
to Respondents
Problem delay
while
dentist
and I. Ross
Favorable
Dental
50-minute
sees
another
Airline Auto mechanic Restaurant
patient Overnight delay due to overbooking by airline One day delay due because car is not ready 15-minute delay while waiters serve others
10%
discount
Response
on bill for this visit
Pay for hotel and meals that evening 10% discount on bill for these repairs Free meal next visit
In all cases, unfavorable response was, “There is nothing we can do at this time.” Apology manipulation included the statement, “I am very sorry for the serious inconvenience.” this statement was omitted.
In the no-apology
condition,
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