Customers' reactions to different organizational tactics in a service termination context
Nazifi, Amin and El-Manstrly, Dahlia and Gelbrich, Katja (2019) Customers' reactions to different organizational tactics in a service termination context. European Journal of Marketing, 54 (1). pp. 26-48. ISSN 0309-0566 (https://doi.org/10.1108/EJM-02-2018-0139)
Preview |
Text.
Filename: Nazifi_etal_EJM2019_Customers_reactions_to_different_organizational_tactics_in_a_service.pdf
Accepted Author Manuscript Download (758kB)| Preview |
Abstract
Purpose: This study aims to examine the effects of organizational tactics (e.g. explanation and monetary compensation) on customers’ reactions to service termination. The mediating role of anger and the moderating role of termination strategy on the effectiveness of organizational tactics are examined to enhance the understanding of customers’ reactions to service termination. Design/methodology/approach: Three experimental studies are conducted with different contexts (telecom and banking) and samples (students and consumers). Findings: Study 1 results show that explanation and high monetary compensation reduce negative word-of-mouth and enhance corporate image and anger mediates these effects. Study 2a results show that high monetary compensation becomes ineffective when firms use a soft termination approach. Study 2b results show that an explanation is equally effective in soft and hard termination approaches. Importantly, unlike high monetary compensation, the explanation can fully eliminate the negative consequences of service termination. Practical implications: Managers can mitigate negative customers’ reactions to service termination by offering a truthful explanation. Further, they should provide high monetary compensation only if they do not help dismissed customers find an alternative provider. Originality/value: This paper contributes to the service termination literature by shedding more light on the effectiveness of different organizational tactics following different termination strategies. The findings challenge existing wisdom on the overrated role of monetary compensation showing that in service termination, the explanation is the most effective remedy. Further, unlike justice, anger better explains customers’ reactions to service termination.
ORCID iDs
Nazifi, Amin ORCID: https://orcid.org/0000-0002-1898-7654, El-Manstrly, Dahlia and Gelbrich, Katja;-
-
Item type: Article ID code: 70225 Dates: DateEvent6 December 2019Published6 December 2019Published Online20 October 2019AcceptedSubjects: Social Sciences > Commerce > Marketing. Distribution of products Department: Strathclyde Business School > Marketing Depositing user: Pure Administrator Date deposited: 22 Oct 2019 13:35 Last modified: 28 Sep 2024 00:44 URI: https://strathprints.strath.ac.uk/id/eprint/70225