Managing Service Failure and Recovery and Online Brand Communities

Customers are no stranger to the traditional complaint service system and the return and refund policies companies offer them. These services are provided when a customer encounters and reports a failure in service procedures and outcomes in an attempt to retain customer satisfaction and loyalty to a brand. In the context of online brand communities (OBCs), efforts to retain customers using return and refund policies and traditional complaint reporting services are challenged by the increasing involvement of customers. OBCs bring social networks closer together, including consumers, the brand and marketers (McAlexander et al., 2002), and had made generating and distributing negative electronic word of mouth (eWOM) easier (Ozuem et al., 2024). Prior to OBCs’ rise in popularity, communication regarding service failures and compensation would have been kept strictly between the customer and the operator handling their complaint, and the company’s efforts to recover the failures required customers to wait for compensation; compensation could be a refund, a discount on future purchases, a service upgrade, free products or services, or an apology and an acknowledgement of the failure (Kelley et al., 1993). However, OBCs are equipped with features including like, share, comment and picture uploading options, which give customers the option to tell the whole community about a failure in a delivered service or a faulty product they received. Customers may even go further and repeatedly report through OBCs if they do not receive satisfactory updates from the company, exposing the failure of a company’s recovery process in addition to their core product and service delivery. According to a global survey by Statista, 45% of customers would report a negative brand experience to a friend or family, and 22% would publish a comment of this experience on third-party sites (Navarro, 2024). Regarding waiting for a company’s response to a negative review or feedback, 34% of customers expected a response from the company within 24 hours and only 11% would expect to wait for 72 hours (Tighe, 2024). The immediate sharing and encountering of eWOM means that companies have to monitor the length of time they take to respond to customers and think about how the level and type of front-line communication they deliver through OBCs impacts the emotional reactions of the customer and the community observing the activity.