Optimizing service failure and damage control

Halbheer, D, Gartner, D, Gerstner, E and Koenigsberg, O (2018) Optimizing service failure and damage control. International Journal of Research in Marketing, 35 (1). pp. 100-115. ISSN 0167-8116 OPEN ACCESS

Abstract

Should a provider deliver a reliable service or should it allow for occasional service failures? This paper derives conditions under which randomizing service quality can benefit the provider and society. In addition to cost considerations, heterogeneity in customer damages from service failures allows the provider to generate profit from selling damage prevention services or offering compensation to high-damage customers. This strategy is viable even when reputation counts and markets are competitive.

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Item Type: Article
Subject Areas: Marketing
Additional Information: © 2017 Elsevier
Subjects: S > Service quality
S > Service industries
Date Deposited: 26 Jan 2018 09:49
Last Modified: 20 Sep 2019 08:23
URI: http://lbsresearch.london.edu/id/eprint/952
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