This article examines the link between recovery time and customer compensation expectations for service failures that cannot be immediately redressed. First, we show that the relationship between recovery time and compensation expectations is nonlinear. Initially, in a recovery time zone of tolerance, compensation expectations do not increase. Beyond this zone, the relationship follows an inverted U-shape, such that compensation expectations first increase but decrease in the long run. Second, our results show that long recovery times are accompanied by additional negative effects, including lower satisfaction with the recovery and negative word of mouth, so postponing service recovery represents a poor option. Third, relationship strength functions as a moderator. First-time customers expect higher compensation earlier; relational customers display a recovery time zone of tolerance but claim considerably higher compensations afterwards. Fourth, communication initiatives like the separate provision of status updates or an explanation may limit increases in compensation expectations over time. Still, their joint usage creates a “too-much-of-a-good-thing” effect, suggesting that if the usage of communication initiatives is taken too far it may lead to negative outcomes such as increasing compensation expectations.
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All datasets were collected from a Western European country that is part of the European Union. They are representative of the population of this country.
A replication in an online retailing (n = 117) context offers robust support for the direct effect of recovery time on compensation expectations (F2, 113 = 5.594; p < 0.01; ANCOVA). Contrast analyses also confirm the pattern of means (MImmediate = 23.50 vs. M1Week = 27.04; F1, 113 = 0.850; ns; MImmediate = 23.50 vs. M4Weeks = 35.77; F1, 113 = 10.632; p < 0.01; M1Week = 27.04 vs. M4Weeks = 35.77; F1, 113 = 5.092; p < 0.05).
To check the robustness of the recovery time zone of tolerance, we calculated further multistep hierarchical regressions with different timeframes (i.e., immediate to ten days; immediate to eight days; immediate to five days; eight days to eight weeks). All regressions support the finding that compensation expectations do not increase significantly within the recovery time zone of tolerance but do so after.
Slightly different from Study 2a, we find a significant negative cubic effect (B = −0.002, SE = 0.001, p < 0.05; see Web Appendix D) of recovery time on compensation expectations when conducting the regression over all 12 recovery times. At first sight, the negative cubic effect might imply a curve that is first U-shaped and then inverted U-shaped. A closer look at Fig. 3, Panel B, instead reveals that the results within the recovery time zone of tolerance (i.e., immediate to one week) do not decline significantly, as supported by the regression analysis for this separate range of recovery time. The main aim of Study 2b was to identify additional negative effects of longer recovery times, so we decided to focus our discussion on the effects within and outside the recovery time zone of tolerance.
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The thank Dwayne D. Gremler and the attendees of the invited Thought Leaders in Service Marketing Strategy Conference for their valuable feedback on prior versions of this article. The authors also thank the Editors and the anonymous reviewers for their constructive comments. Nicola Bilstein thanks the German Research Foundation (DFG) for financial support (grant BI 1763/1-1). This project was a team effort, with all researchers contributing equally.
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Hogreve, J., Bilstein, N. & Mandl, L. Unveiling the recovery time zone of tolerance: when time matters in service recovery. J. of the Acad. Mark. Sci. 45, 866–883 (2017). https://doi.org/10.1007/s11747-017-0544-7
- Service recovery
- Customer relationships
- Service failure
- Customer betrayal
- Customer anger
- Equity theory
- Complaint status updates