Service Recovery: Coalition Formation and Social Exclusion

We observe a paradoxical situation in the service failure and recovery literature. On the one side, the research provides ample evidence for the strategic relevance of complaint management, for example for fostering customer loyalty and firm profitability. On the other side, surveys show that customers experience complaint incidents as frustrating and are often downright enraged. For example, a survey among 1000 Austrian consumers finds that only one third of the respondents think that firms have a good complaint management in place (Statista 2016). In the course of the present project, we seek to analyze how the social dynamics in the event of a failure change, when there is in addition to the complainant and the service employee also a third person, who is part of the interaction; an often-encountered constellation in real-life situations. A behavioral phenomenon distinct to triadic (or more) relationships is coalitions and their formation. Coalitions refer to a temporary alliance among individuals to pursue a specific goal. The present project analyzes why in the event of a failure two people form a coalition, which consequences this has for the complainant, and how service employees should handle such problem incidents for providing a satisfying complaint handling for the failure experiencing customer. Coalitions are a pervasive phenomenon in social interactions and remain yet unexplored in service failure situations, which commonly challenge consumer-firm relationships. The analysis of coalitions thus presents a promising research endeavor for generating novel consumer insight that allows to better describe and understand the social dynamics in failure situations than is currently the case. The analysis of coalitions also presents a substantial step to expand the traditional focus from two to three people, which contributes to overcome a considerable limitation in the present state of research. Moreover, the expansion from two to three people is desirable since the three-people case provides the foundation for generalizations to group settings. This project therefore also addresses the question how firms should handle complaints, when more than three people are involved in the situation. To this end, special attention is given to social media platforms and channels, which recently became a salient communication tool for voicing complaints. In sum, the project is devoted to a basic research question in the field of service failure and recovery that has major implications on an applied level.