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.