This post is about understanding the co-creation effect: when does collaborating with customers provide a lift to service recovery? By Roggeveen, A., Tsiros, M. and Grewal, D. (2011)
Co-creation is the process of jointly producing a mutually valued outcome. This means that consumers can help shape or personalize the content of their experience, in other words, it can affect satisfaction of a recovery. A recovery is required when equity of a customer-company relationship is damaged. The research investigates the impact on equity for service delays outside the company’s control in the airline industry.
The first study demonstrates that using co-creation during severe and less severe delays yields different results. When consumers face a sever delay, co-creation improves the evaluation of the company, whereas less severe delay evaluations are not affected. Furthermore, the study demonstrates that co-creation works as good as compensating customers for severe delays. When faced with less severe delays, co-creation performs just as well or even better than compensating a customer.
The second study expands on the first study by expanding the knowledge on repurchase intentions, after co-creation recovery. The study demonstrates that recovery extends beyond the increased evaluations, it increases consumers repurchase intentions as well. This relationship is however mediated by equity, which is the difference between what consumers have received and what they expected to receive.
The third study looks at the perception of consumers of the recovery task. When consumers view the recovery strategy negatively, hence if the view it as akin to work, co-creation can harm evaluation. This is especially the case when consumers are asked to co-create during less severe delays.
The fourth and final study is the most interesting. The researches explore what happens when a company does not meet or exceeds the customers’ expectations after a recovery or compensation. As expected, companies that do not meet a customer request achieve lower evaluations. However, when a company exceeds customer expectations, the customer does not evaluate the company higher than when meeting customer requirements.
Especially the last study has large managerial implications. Consumers evaluate a business the same as when a company meets or exceeds the requirements set by the customer, which means that it is far more economical to only meet the necessary requirements. From this study we can therefore learn that using a co-created recovery for severe problems achieves good results for both customer evaluations and repurchase intentions. As noted by a manager: “if a guest perceives a failure to be just horrible, then they want to be more involved in rectifying the problem. If they perceive that it’s a minor inconvenience, then they don’t want so much input on it.”
Roggeveen, A., Tsiros, M. and Grewal, D. (2011). Understanding the co-creation effect: when does collaborating with customers provide a lift to service recovery?. Journal of the Academy of Marketing Science, 40(6), pp.771-790.
Heading picture: Travelsort.com [Accessed on 02-04-15] http://travelsort.com/blog/getting-united-to-pay-eu-compensation-for-a-flight-delay