Date of Award
Doctor of Philosophy
The number of people who spread their negative experiences after a service failure on online platforms such as social media has been increasing. In this situation, firms need to restore customers’ economic and social losses by offering appropriate service recoveries in order to make customers happy and be forgiven. As the service recoveries are offered online, the influence of virtual presence has to be considered in offering service recoveries. Social impact theory (SIT) explains how the presence of others affects an individual’s behavior through three social forces: source strength, immediacy, and size. This study suggests virtual observers’ expertise, online immediacy, and virtual audience size as the three social forces on social media platforms. Social impact is high due to an increase of any social forces. The aim of this research is to examine the effect of psychological and economic compensation on customers’ delight in social media contexts based on the three social forces of SIT. The current study seeks to investigate the mechanism through which customers forgive the firm to ultimately become loyal customers again. The results suggest that economic and psychological compensation are positively related to customers’ delight. In addition, the results show that economic compensation has a greater impact on customers’ delight when the social impact is low versus high. Also, psychological compensation has a greater impact on customers’ delight when the social impact is high versus low. The results also indicate that perceived reciprocity partially mediates the relationship between customers’ delight and forgiveness. Higher levels of customer delight lead to higher levels of perceived reciprocity, and ultimately higher levels of customer forgiveness. The results demonstrate that relationship strength does not moderate the mediation effect of perceived reciprocity on customer delight-forgiveness relationship. Finally, the results show that forgiveness is positively related to repurchase intention. The findings help managers to offer effective service recoveries on social media and understand the effectiveness of economic and psychological compensation even when customers are reluctant to engage in reparatory behaviors after experiencing a service failure.
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