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 customers’ emotional responses and bad-mouthing behavior (i.e., telling others about a particular problem). Importantly, the study investigates whether the level of collaboration during the recovery encounter moderates the link between compensation and customers’ emotional responses, and whether collaborative efforts influence the effectiveness of compensation. The findings indicate that collaboration during the recovery encounter is necessary if compensation is to mitigate negative emotional responses, with downstream effects on bad-mouthing behavior. In confirming the importance of collaboration during recovery encounters, the findings have critical managerial and financial implications.

Purpose Previous research on salesperson-customer proximity has yielded mixed results, with some studies documenting positive proximity effects on shopping responses and others demonstrating the reverse. To reconcile such mixed findings, this paper aims to test whether and how salesperson proximity influences a series of key customer outcomes in actual retail settings using sample sizes that are considerably larger than most former investigations. Design/methodology/approach We conducted two high-powered field studies (N = 1,312) to test whether salesperson-customer proximity influences consumers' purchase behavior and store loyalty. Moreover, we investigated whether the short-term effects on purchase behavior were moderated by the extent to which the consumption context had a clear connection to consumers' own bodies. Findings Salesperson proximity increased purchase incidence and spending in consumption contexts with a bodily basis (e.g. clothes, beauty, health), suggesting that consumers "buy their way out" in these contexts when a salesperson is violating their personal space. If anything, such proximity had a negative impact on consumers' purchase behavior in contexts that lacked a clear bodily connection (e.g. building materials, furniture, books). Moreover, the link between proximity and consumer responses was mediated by discomfort, such that a salesperson standing close-by (vs farther away) increased discomfort, with negative downstream effects on shopping responses. Importantly, the authors found opposite proximity effects on short-term metrics (purchase incidence and spending) and long-term outcomes (store loyalty). Research limitations/implications Drawing on the nonverbal communication literature and theories on processing fluency, the current work introduces a theoretically relevant boundary condition for the effects of salesperson-customer proximity on consumers' purchase behavior. Specifically, the bodily basis of the consumption context is discussed as a novel moderator, which may help to explain the mixed findings in this stream of research. Practical implications Salesperson-customer proximity may serve as a strategic sales tactic to improve short-term revenue in settings that are closely tied to consumers' own bodies and characterized by one-time purchases. However, as salesperson proximity was found to be associated with lower store loyalty, irrespective of whether the shopping setting had a bodily basis, the risk of violating consumers' personal space may have costly consequences from a long-term perspective. Originality/value The present field studies make three central contributions. First, we introduce a novel moderator for proximity effects in various sales and service settings. Second, we test the focal hypotheses with much higher statistical power than most existing proximity studies. Finally, we document that salesperson-customer proximity ironically yields opposite results on short-term metrics and long-term outcomes, thus underscoring the importance of not solely focusing on sales effectiveness when training frontline employees.

Despite the widespread adoption of the justice framework in service recovery literature, research findings vary as to what dimension - distributive, interactional, procedural - is most important. This paper contributes to this debate by considering how an easily accessible variable like relationship activity (i.e., the frequency of visiting and purchasing from a company) moderates the impact of the justice dimensions on post-recovery customer outcomes. Findings show that distributive justice is the only dimension impacting word-of-mouth (WOM) and repurchase behavior for low- and medium-relationship-activity customer segments. For a high-relationship-activity segment, all justice dimensions have a positive and balanced impact on WOM and/or repurchase behavior. This research demonstrates the potential of a segmented approach for recovery, while also providing managers with valuable insights into how they can use readily available information to adapt their service recovery efforts.

Although service failure and service recovery have been extensively researched, service employees struggle to recover an increasing number of customer complaints. The overall aim of this thesis is to explain the role of customer and employee proactivity in service failure and service recovery. Through a series of studies, this thesis examines how employee and customer proactivity influence customer responses after a service failure and in service recovery. In doing so, this thesis contributes to the service recovery literature in two ways.

First, by reconceptualizing service failure to include failures not necessarily linked to the core-service offering, this research contributes to the theory formation stressing the importance of seemingly “small details”. Doing so makes it possible to examine how seemingly minor interpersonal interaction can influence customer responses in the service environment and provide managers with a set of tools to manage failures of such seemingly minor interpersonal interaction. Introducing employee proactivity as a recovery tactic, this thesis demonstrates that when an employee shows a high level of proactivity during a service encounter, they can reduce the adverse effects that stem from the absence of expected interpersonal “small details” from earlier in the service encounter. As such, potentially serve to address a portion of the “silent mass” of customers who choose to stay silent.

Second, findings contrast lay belief that customers prefer the service providers to deal with service failures while they sit back and relax. Introducing service recovery collaboration as a potential service recovery response made it possible to document the benefits of including the customer as a proactive collaborator in the service recovery. Findings reveal that proactive customer behaviors in service recovery are particularly critical for customers with established relationships and in situations where compensation is the primary means of recovery.

The aim of this thesis is to explain the role of customer and employee proactivity in service failure and service recovery. Through a series of studies, this thesis examines how employee and customer proactivity influence customer responses after a service failure and in service recovery. In doing so, this thesis contributes to the service recovery literature in two ways. First, by reconceptualizing service failure, this research supports the theory formation stressing the importance of seemingly “small details”. However, by introducing employee proactivity as a recovery tactic, this thesis demonstrates how employee proactivity can reduce the adverse effects which stem from the absence of expected interpersonal “small details” which can potentially serve to address a portion of the “silent mass” of customers who choose to stay silent. Second, findings contrast lay belief that customers prefer the service providers to deal with service failures while they sit back and relax. In fact, this thesis documents the benefits of including the customer as a proactive collaborator in the service recovery. Findings reveal that customer inclusion is particularly critical for customers with established relationships and in situations where compensation is the primary means of recovery.

Service recovery research has traditionally been firm-centric, focusing primarily on the time and effort expended by firms in addressing service failures. The subsequent shift to a customer-centric orientation addressed the customer's role in recovery situations, and the recent dyadic orientation has explored the effectiveness of their joint efforts. However, earlier conceptualizations failed to take adequate account of the complexity of service recovery encounters in which multiple actors collaborate and integrate resources. This study explores how multiactor collaborations influence the customer's experience of service recovery by adopting a multiactor orientation and by applying service-dominant logic. After reviewing the customer experience literature, a collaborative recovery experience framework is developed that emphasizes the joint efforts of multiple actors and customers to achieve a favorable recovery experience. In a contextualization, the usefulness of the new framework to explain customer experiences in collaborative service processes is shown. Finally, further research avenues are proposed.