The purpose of this thesis is to evaluate and analyse the attitude and behaviour of consumers of a certain age group towards service failures, service recovery and the elements that are included during the recovery process, especially focusing on compensation.
The data has been gathered with the help of in-depth interviews with five respondents. The author has constructed a semi-structured questionnaire and has met the respondents for face-to-face interviews to be able to collect as much information as possible. To facilitate the understanding of the thesis, the author presents relevant researches executed by other authors and compares and contrasts her findings with the results of those.
The findings of this research show the importance service recovery has among customers of the age group 19-28. The results show that the respondents can forgive service failures when the service recovery is implemented well and matches their own expectations. When service recovery is missing or does not correlate with the needs and wishes of the customers, the perception towards the firm is influenced negatively and the customers show a higher probability to switch the provider, look for alternatives or spread negative word-of-mouth. In relation to the context factor, it is shown that the Deutsche Bahn operates a two-class treatment towards its customers that leaves one part of the customer pleased with the service provider and the other half highly unsatisfied.
Previous research has pointed out certain phenomena which this thesis also addresses. The Service Recovery Paradox (McCollough, 2009) has been achieved but under uneconomic terms. This research also agrees with the findings that the existence of the Paradox is highly dependent on external factors (Magnini, 2007). In regard of the possible effects of overcompensation, the majority of the respondents’ answers contradict the assumption that offering too much compensation has a negative impact on the perception of the firm (Boshoff, 2012).