Examining the Effects of Service Failure, Customer Compensation, and Fault on Customer Satisfaction with Salespeople

Abstract

Very little research has been done looking at the effects of salespeople’s actions on customer satisfaction with salespeople, their companies, and service encounters. This paper reports results of a role-playing experiment involving 272 individuals that was undertaken to examine these issues. Results indicate several important findings. First, services failure attributed to factors outside the control of salespeople did not affect customer satisfaction with salespeople. However, failures attributed to salespeople’s actions did have a negative effect on customer satisfaction with both salespeople and their companies. Salespeople offering customers compensation for service failure had no effect on customer satisfaction with the salespeople. Customer compensation did have a positive effect on satisfaction with the service encounter and the company. Implications are discussed.