Sharing the Responsibility for Service Failure with Customers: The Effects of Informed Choice and Outcome Foreseeability on Customer Loyalty and Exit

Abstract

ABSTRACT Research on service management has been focused on a few strategies for retaining customer loyalty: improving service quality so that customers do not experience failure and recovering from failure, when it does occur. A third strategy is to protect against the ill effects of service failure by preemptive action. This is explored, in the research reported here, through an examination of the effects of giving customers an informed choice. Discovered is that an informed choice causes customers to share responsibility for a service failure and as a result stay more loyal and exit the service relationship less.