Turning Failures into Opportunities for Value Creation
Proceedings of the AMA Relationship Marketing Summit, Buenos Aires, 2007
20 Pages Posted: 28 Mar 2007 Last revised: 22 Dec 2007
Product failures are critical incidents in customer relationships. Here, managers often focus on recapturing satisfaction through resolving the problem. It is largely neglected so far that there is a chance to lift secondary satisfaction (i.e., satisfaction after a failure and recovery activities) beyond the pre-failure level. To create such a "leverage effect", pure recovery services have to be expanded to value-added recovery services. Using a quasi experiment and data from real-life car breakdowns this study investigates if value-added (proactive) recovery services have a leverage effect on customer satisfaction. In that case failures could also be viewed as an opportunity for a firm.
This paper received the Sheth Foundation Best Paper Award at the AMA Relationship Marketing Summit
Keywords: Customer satisfaction, Proactive Services, Recovery Paradox, Quasi-Experiment
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