Does Service Failure Context Matter? Customers’ Response to Service Recovery

Because service failures are difficult to avoid in the services context due to their characteristics, firms need to offer an adequate service recovery to compensate customers. Customer behavior may be affected either by the failure or its recovery. The purpose of this study is to explore the impact of service failure severity in customers' post-recovery behavior. The study comprises a sample of 40,813 customers, representing customers who had experienced a problem with the service provider and customers who had not. Empirical results showed that service failure severity has a significant negative influence in customers' post-recovery repurchase behavior. Nevertheless, the influence differs across customers' relationship age with the service. Additionally, they also provide evidence of when service recovery paradox is more likely to occur. This study contributes with relevant insights for practitioners. Since failure severity affects negatively customers' post-recovery repurchase behavior, the classification of service failures by degree of severity is commended. Hence, firms should adopt different service recovery strategies depending on failures severity degree and customers' relationship age with the firm. Customers' segmentation should consider these characteristics in order to enhance complaints management and customer loyalty.