Consequences of Customer Co-Production in Reactive and Proactive Service Recovery

• Applicant: Professorin Dr. Nicola Bilstein
• Subject Area: Accounting and Finance
• Term: from 2014 to 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 255422650

Due to service heterogeneity and customer participation in the service delivery process, service failures are inevitable. To resolve these failures and restore customers, service providers initiate service recovery actions that determine not only customer satisfaction but also loyalty and repurchase intentions. Achieving those positive post-recovery evaluations requires service providers to recognise just which factors influence those evaluations. For example, the impact of perceived justice or emotions on post-recovery evaluations has been widely examined; the relevance of customers' co-production in recovery instead has been generally neglected. This gap frankly is astonishing, in that customers often must co-produce their own service recovery by providing information or performing tasks in the process. The scope of their contributions seemingly should have a determinant effect on their post-recovery evaluations. Therefore, this project aims to scrutinise the influence of co-production in recovery on customers' post-recovery evaluations (e.g., satisfaction, word of mouth), in situations in which the service recovery is initiated by either the customer (i.e., reactive) or the organization (i.e., proactive). In contrast with extant studies, this research will hold the recovery outcome stable: Regardless of whether the customer co-produces to a lesser or greater extent, the recovery outcome remains the same. Moreover, this project seeks to identify personal and situational moderators of the underlying relationship with a qualitative study in which problem-centric interviews identify potential personal and situational moderators. The hypotheses for this research will derive from equity theory, together with the insights from the qualitative study, and be tested in two experimental series comprising five experiments each (i.e., economic and scenario-based experiments). The results are likely to offer important implications for both research and management. In particular, this project will combine insights gained from co-production literature with those related to service recovery to analyse the effect of co-produced recovery on customers' post-recovery evaluations. By focusing on stable recovery outcomes and examining both proactive and reactive recovery situations, this project enriches former research. Furthermore, the identification of personal and situational moderators in this context will support service providers in their endeavours to design and manage better recovery and co-production processes.

• DFG Programme: Research Grants