Better him than me: social comparison theory and service recovery

Abstract

We conduct two studies to examine if, when, and why communication strategies using social comparisons can effectively restore emotional equilibrium after a service failure, and thus aid recovery efforts. In our first study, we find that after a service failure, like compensation, downward social comparisons reduce anger and improve post-purchase behavioral intentions (including exiting, complaining to management, engaging in negative word-of-mouth, and complaining to a third party). However, when two recovery tools, compensation and downward social comparisons are used together they do not have an additive effect. Additionally, we show that anger mediates the social comparison effect. In a second study, we further explore the social comparison effect and the financial compensation effect using complete and incomplete downward social comparisons and multiple levels of financial compensation. Our findings indicate that complete downward social comparisons are particularly effective at improving all four types of post-purchase behavioral intentions when financial compensation is non-existent or relatively low. Finally, we discuss implications for theory and practice.