The negative effects of failed service recoveries

Research has shown that more than half of attempted recovery efforts fail, producing a ‘double deviation’ effect. Surprisingly, these double deviation effects have received little attention in marketing literature. This paper examines what happens after these critical encounters, which behavior or set of behaviors the customers are prone to follow and how customers’ perceptions of the firm’s recovery efforts influence these behaviors. For the analysis of choice of the type of response (complaining, exit, complaining and exit, and no-switching), we estimate multinomial Logit models with random coefficients (RCL). The results of our study show that magnitude of service failure, explanations, apologies, perceived justice, angry and frustration felt by the customer, and satisfaction with service recovery have a significant effect on customers’ choice of the type of response. Implications from the findings are offered.

The use of disliked gifts from a consumer behavior perspective

To use or not to use a disliked gift is a dilemma for recipients. Their choice will affect their relationship with the giver as well as marketing and business. However, the study of this topic is scarce in the consumer behavior discipline. Through a survey on 1269 adults in Ecuador, a Latin American country, this study identifies variables from the recipient, the giver, their relationship, and the gift. These variables provide the solution to the dilemma and, according to these findings, present implications for theory and practice.