Customer participation in service recovery: a systematic literature review and empirical research

Service failures occur frequently in firms. With the aim of addressing such situations, service research has developed a substantial body of knowledge about how firms should respond to service failures, which are known as service recovery attempts. Service recovery has been defined as the actions that a firm takes as a response to a service failure in order to rectify, amend, and restore the losses caused by a service failure. The service recovery literature has grown over the past 45 years and has evolved into an extensive, diversified body of knowledge. An analysis of the literature reveals that early research on service recovery took a firm-oriented perspective and typically focused on firms’ attempts to recover customers and rectify the unpleasant situation, while in the last decade some service recovery researchers moved on to a customer-oriented approach and investigated the issue of how customers could contribute to fixing the problem in a service recovery process. Taking a participatory perspective on service recovery issues requires extending our knowledge of what efforts customers can make in a service recovery process and to what extent customers should be involved in different stages of a service recovery process to enhance positive outcomes for customers. In addition, little attention has been given to determining whether participatory service recovery may form relational connections between the entities involved in the recovery process, including customers, frontline employees, and the service firm. Using a bibliometric approach, the second chapter brings critical attention to the theoretical foundations underlying the service recovery literature. This systematic literature review identifies three main theoretical perspectives and seven research streams in the literature. Furthermore, this chapter discusses several recent advancements, research trends, and gaps in the extant literature that may not have received adequate attention to date and can serve as guidelines for future research. Drawing on the results of the second chapter, the third and fourth chapters address the shortcomings of the current literature on taking a participatory perspective to service recovery situations and the role of customers in a service recovery process. The third chapter takes a more precise look at the role of customers in a service recovery situation. This chapter investigates the effects of customer participation in two distinct stages of the service recovery process, namely solution identification and solution implementation, on customers’ evaluations of the service recovery process. This chapter draws upon a mixed-methods approach combining a qualitative critical incident technique (CIT) study with an experimental design study. The results find that customer participation in either of the stages of solution identification and solution implementation increases customer satisfaction with the recovery process through enhancing customers’ perceived control and empowerment. Therefore, this chapter extends our understanding of the role of customers in a service recovery process and offers customer participation in a service recovery process as an actionable way to enhance the process and outcomes of service recovery (Bagherzadeh et al., 2020). The level of customer participation in a service recovery process may range from being a receiver of the service in a recovery encounter (low level) to actively participating in solving the problem (high level). The fourth chapter brings the relationship investment theory to participatory recovery practices and investigates how customer participation in a service recovery process enhances customers’ perception of rapport with the frontline employee they participate with and, consequently, customer relationship quality with the firm. In addition, this chapter articulates the moderating role of employee age (young vs. middle-aged) in enhancing the effects of customer participation in service recovery on customers’ perception of rapport and customer relationship quality. Furthermore, we examine the psychological process that underlies the effects of employee age on a customer’s perception of rapport through investigating the mediating role of employee trustworthiness. Empirical support for the proposed effects comes from three scenario-based online experimental studies in an airline setting. The findings of this chapter provide new insights for firms to repair interpersonal relationships in a service recovery encounter through involving customers in the recovery process to ensure they keep their relationship with their customers after a service failure incident. Overall, the thesis advances the literature by analysing the service recovery field, and providing novel theoretical explanations to understand the effects of customer participation in different stages of service recovery on customer’s post-recovery outcomes as well as the contribution that participatory recovery practices make to achieving closer relational connections between customers and frontline employees and the service firm.