Money for Nothing: The Impact of Compensation on Customers’ Bad-Mouthing in Service Recovery Encounters

• Published in: Marketing letters Vol. 34; no. 1; pp. 69 - 82
• Main Authors: Arsenovic, Jasenko, Edvardsson, Bo, Otterbring, Tobias, Tronvoll, Bård
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.03.2023; Springer Nature B.V
• Subjects: Bad-Mouthing Behavior; Behavior; Business and Management; Collaboration; Compensation; Complaint Management; Customer satisfaction; Customer services; Customers; Emotional responses; Emotions; Failure; Loyalty; Marketing; Money; Mouthing; Recovery; Reimbursement; Service Failure; Service Recovery; Tactics; Complaint Management; Service Recovery; Service Failure; Bad-Mouthing Behavior; Compensation; Collaboration

As one of the retailer’s most potent recovery tactics to offset disgruntled customers, firms invest heavily in compensation to increase customer satisfaction and improve loyalty. However, the effectiveness of this tactic remains unclear. This study examines whether firm-offered compensation affects...