Overcompensation as a service recovery strategy: the fnancial aspect of customers’ extra efort

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Abstract

Compensation is one of the most important elements of service. Companies often pursue a strategy of overcompensation; however, there are contradictory results in the literature whether overcompensation has a positive or negative efect on post‑ complaint customer behaviour. In this paper, based on three studies, we prove that examining the amount of additional efort required of the customer in order to achieve service recovery can help us better explain outcomes of the service recov‑ ery. Our results clearly show that the degree of additional customer efort has sig‑ nifcant infuence both on satisfaction and on perceived fairness and it moderates the efect of the amount of compensation.