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Abstract
This research examines the implications of two critical areas in services marketing: suggestive selling and service recovery performed by frontline personnel. In this first chapter, I compare the short and long-term consequences of up-selling versus an alternative suggestive selling practice called down-selling which involves salespeople pro-actively guiding customers to low price or discounted products. Using theories of mental budgeting and disconfirmation of price expectations, I develop a model relating the two alternative suggestive selling strategies to customer value, product quality perceptions, satisfaction, and loyalty. The results from testing the model with over 2000 customers of a casual dining chain provide the first insights into the detrimental long-term effects of up-selling and the surprising short and long-term benefits of down-selling. The results suggest that prevailing fears regarding down-selling are misplaced and firms may in fact gain by limiting up-selling and institutionalizing down-selling. More profitable customer relationships may be produced by the promotion of moderately priced products and switching customers down to lower-priced products using suggestive selling strategies.The second chapter examines customer response to service failure and recovery efforts from a short and a long-term perspective across all four service outcome customer groups. The results show a non-linear post experience attitudinal relationship across the four outcome groups. Those who did not experience a service failure (control) exhibited the highest attitudinal measures. Contrary to the Service Recovery Paradox, those who had a satisfactory recovery exhibited lower attitudinal scores than the control. Non-complainers, who comprise a much larger percentage of the population than previously thought, exhibited considerably lower attitudinal measures than the satisfactory recovery group but exhibited slighter better attitudinal measures than the double deviation group. Essentially, those that concluded their experience satisfied (control and satisfactory recovery) exhibited higher attitudinal measures than those who concluded their experience dissatisfied (non-complainer and double deviation). The small differences within the satisfied and dissatisfied customer groups dissipated prior to their next service purchase. Therefore, future purchase behavior is simply determined by whether or not they concluded their experience satisfied. Finally, the return on investment of service recovery is approximately three times the revenue of the original experience.