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The role of regulation and financial compensation on trust recovery

Author

Listed:
  • Gasparotto, Lisiane Santos
  • Pacheco, Natália Araujo
  • Basso, Kenny
  • Corte, Vitor Francisco Dalla
  • Rabello, Gisele Costa
  • Gallon, Shalimar

Abstract

Although service recovery tactics have been extensively investigated, little is known about what firms should do when service recovery fails (i.e., double deviation). It is primordial to understand whether and how customer trust may be recovered after a double deviation. The results of an experimental study show that it is possible to recover customer trust through improvements in organizational processes (i.e., regulation) and discounts (i.e., financial compensation). Remarkably, regulation and financial compensation lead to similar trust levels, which means that these trust recovery tactics are equally successful. Moreover, attributions of benevolence explain why regulation and financial compensation can recover customer trust after a double deviation.

Suggested Citation

  • Gasparotto, Lisiane Santos & Pacheco, Natália Araujo & Basso, Kenny & Corte, Vitor Francisco Dalla & Rabello, Gisele Costa & Gallon, Shalimar, 2018. "The role of regulation and financial compensation on trust recovery," Australasian marketing journal, Elsevier, vol. 26(1), pages 10-16.
    • Handle: RePEc:eee:aumajo:v:26:y:2018:i:1:p:10-16
    DOI: 10.1016/j.ausmj.2018.01.002
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    References listed on IDEAS

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    Cited by:

    1. Martinez, Luisa M. & Pacheco, Natália & Ramos, Filipe R. & Bicho, Marta, 2023. "Would you try it again? Dual effects of customer mindfulness on service recovery," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).

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