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Examining the trade-off between compensation and promptness in eWOM-triggered service recovery: A restorative justice perspective

Liu, Hongfei and Jayawardhena, Chanaka and Dibb, Sally and Ranaweera, Chatura (2019) 'Examining the trade-off between compensation and promptness in eWOM-triggered service recovery: A restorative justice perspective.' Tourism Management, 75. 381 - 392. ISSN 0261-5177

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Abstract

Our research examines the effectiveness of monetary compensation and the promptness of response during electronic word-of-mouth (eWOM)-triggered service recovery. Drawing upon restorative justice theories, we explore three main questions: whether the hotel’s response to negative online reviews are always beneficial; whether offering compensation or responding promptly is more efficient under different levels of service failure severity; and how the hotel’s response influences consumers’ future engagement through eWOM media. Experimental results reveal that making minimum online service recovery effort is only effective in fixing consumer attitudes for less severe service failures. Compensation is the optimal solution for less severe failures, while prompt response is optimal for more severe service failures. The hotel’s responsiveness to negative reviews and the service recovery outcome positively influence consumers’ future eWOM behaviours through the same online medium. Implications for hotels seeking cost-effective management of negative reviews and for online media owners are offered.

Item Type: Article
Uncontrolled Keywords: Service recovery, Electronic word-of-mouth (eWOM), Online reviews, Restorative justice, Compensation, Speed of response, Service failure severity, Media engagement
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Social Sciences > Essex Business School
Depositing User: Elements
Date Deposited: 21 Jun 2019 08:33
Last Modified: 17 Oct 2019 21:16
URI: http://repository.essex.ac.uk/id/eprint/24808

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