Hogreve - Recovery Time Zone

Question 1

Recovery time zone of tolerance & compensation expectations

Answer 1

Time span between complaint and resolution offered by the firm
-> recovery time influences compensation expectations
Expectations of customers as monetary amount that customers perceives as adequate redress for all costs related to service failure

Question 2

Framework of recovery time effects on compensation expectations

Answer 2

1 - compensation expectations increase with recovery time

2 - relationship strength moderates this effect -> relational customers have more understanding -> longer tolerance zone

3 - Anger mediates the effect -> longer recovery times increase anger, which positively influences compensation expectations

4 - Perceived betrayal mediates the effect for high-relational customers

• > longer tolerance zone but higher expectations afterwards
• > higher expectations come sooner for low-relational customers

5 - communication initiatives (explanations & status updates) decrease the impact of recovery time on compensation expectations
-> avoid „too much of a good thing“