Journal of Retailing and Consumer Services 20 (2013) 599 608

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Journal of Retailing and Consumer Services

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The inuence of empathy in complaint handling: Evidence of gratitudinal and transactional routes to loyalty
Franoise Simon n
HuManiS, Humans and Management in Society, EM Strasbourg Business School, University of Strasbourg, 61 avenue de la Fort Noire, 67085 Strasbourg Cedex, France

art ic l e i nf o
Article history: Received 9 February 2013 Received in revised form 27 April 2013 Accepted 12 May 2013 Available online 10 June 2013 Keywords: Complaint Gratitude Satisfaction Reciprocity Empathy Online

a b s t r a c t
While most studies on complaint handling are focused on performance outcomes, analysis of the processes that reinforce relationship quality is lacking. Building on the relationship marketing theory of reciprocal behaviours, this research proposes and tests a model of the effects of empathy as a particular relationship recovery investment. Addressing for the rst time the role of gratitude in a complainthandling context, this model assumes that both gratitude and transactional satisfaction mediate the inuence of empathy on consumers' trust and commitment. Data from a cross-industry survey of phone and online complaints conrmed the proposed model. & 2013 Elsevier Ltd. All rights reserved.

1. Introduction Experiencing a product or service failure is a highly probable event for customers (e.g., Orsingher et al., 2010). Although marketers may not be able to entirely eliminate failures, they can offer customers the opportunity to complain. Complaint handling in marketing literature is considered to be a critical stage of the relationship between a company and a customer, with poor recovery efforts leading consumers to eventually dissolve the buyerseller relationship and to purchase elsewhere (e.g., Schneider and Bowen, 1999). Reecting the managerial importance of complaint handling, a large body of research has emphasised the crucial role of transactional satisfaction, which refers to customer satisfaction with a complaint-handling outcome (see for meta-analysis Orsingher et al., 2010; Gelbrich and Roschk, 2011). According to this theoretical perspective, transactional satisfaction is assumed to be the main mediator between a companys recovery investment and post-complaint customer behaviour. While complainthandling research in a variety of contexts has found that transactional satisfaction positively inuences repurchase and word-ofmouth behaviour, few studies have analysed transactional satisfactions inuence on relationship quality. Drawing on the theory of trust and commitment as relationship mediators (Morgan and Hunt, 1994), infrequent studies have found that satisfaction is also

Tel.: +33 3 88 41 88 08. E-mail addresses: francoise.simon@uha.fr, francoise.simon@laposte.net

a signicant determinant of key relational variables, including trust and commitment (e.g., Tax et al., 1998; Weun et al., 2004; DeWitt et al., 2008). Together, these studies support a perspective of complaint handling as a tactical means of reinforcing customer relationships beyond simply the repurchase horizon. Integrating relationship marketing literature on reciprocity behaviours (e.g., Morales, 2005; Palmatier et al., 2009) with theoretical considerations of customer satisfaction with complaint handling, the purpose of this research is twofold. We rst propose that the inuence of recovery investment on trust and commitment is mediated by both gratitude and satisfaction derived from the complaint-handling process. To our knowledge, this study is the rst to address the role of gratitude in the context of complaint handling. While transactional satisfaction reects the fullment of consumer expectation in conrmation/disconrmation perspective (Oliver, 1980), gratitude is expected to serve as the affective basis for a complaining consumers reciprocal behaviour (Tsang and McCullough, 2004). Specically, as the short-term emotional appreciation for benets is recognised, gratitude inherently implies a desire to reciprocate that results in the enhanced effectiveness of relationship investment. As complaining customers are more emotionally involved in, and observant of, company response than they would be during a routine service encounter (Smith et al., 1999, p. 356), they are likely to develop a particular awareness for the actions taken to their benet during the complaint handling. Therefore, complaining customers are good candidates for a grateful response and the engagement of reciprocal behaviour. This suggests that gratitude can be an additional mediating variable regarding models of post-complaint behaviour.

0969-6989/$ - see front matter & 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jretconser.2013.05.003

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Second, we rely on the present model to investigate the effect of empathy as a particular relationship recovery investment. Limited research has formally examined the effect of empathy in the critical context of complaint handling, although certain studies have found empathy, or approximated measures, such as attentiveness or showing concern, to be manifestations of interactional justice (e.g., Tax et al., 1998; Sparks and McColl-Kennedy, 2001; Davidow, 2000, 2003). Many studies, contrastingly, have established the importance of empathic experience in ensuring successful frontline employeecustomer interaction (e.g., Drollinger et al., 2006; Giacobbe et al., 2006; Homburg et al., 2009) that in turn contributes to the perception of high-quality service (e.g., Parasuraman et al., 1988; Iglesias, 2009). Our study seeks to extend the recovery literature by addressing the lack of research on the specic impact of empathy. Furthermore, due to the intrinsically relational and benevolent nature of the empathy construct (e.g., McCullough et al., 2001), empathy bestowed by a customer service representative is likely to elicit feelings of gratitude from a customer. Therefore, complaintempathic interactions constitute an excellent setting for the investigation of how gratitude can convey the inuence of relational organisational responses on customer post-complaint behaviour. Empathy has been considered in the literature only with respect to face-to-face interactions. The aim of this study therefore is also to assess the content validity of the construct in an online recovery context. This issue deserves particular attention given the increasing reliance on electronic media in handling customer complaints. Furthermore, it is unclear whether empathy will still affect customer evaluation outside the ofine channel. In this research, we predict that the psychological mechanisms that underlie the inuence of empathy are intrinsically independent of the nature of the medium used to perform the interaction. This study makes four key contributions to existing research. We rst develop a valid and parsimonious measure of perceived empathy in the context of complaint handling. Second, we propose and empirically demonstrate a theoretical framework incorporating the effects of empathy in terms of gratitude and transactional satisfaction; these two variables are important antecedents of relational outcomes. Third, we empirically establish the validity of our model in the context of two distinct communication channels: telephone and email. Lastly, the results lead to actionable managerial recommendations. Our results suggest that customer gratitude emerging from complaint interactions can be relied on more effectively than transactional satisfaction with respect to triggering short-term repurchasing and strengthening the relationship commitment. Our data also suggest that customer service practitioners should properly develop an empathic posture, whatever the channel, to ensure high levels of gratitude as well as transactional satisfaction.

2. Theoretical background on empathy and gratitude 2.1. Empathy A certain degree of ambiguity exists concerning the content and scope of empathy in social psychology and marketing literature. Theoretical discussions on the empathy construct generally follow one of two traditions: dening empathy as either an emotional reaction to, or a cognitive understanding of, other peoples experiences (Preston and de Waal, 2002; Wieseke et al., 2012). Emotional empathy is considered to include facets such as empathic concern and emotional contagion. Empathic concern refers to the feelings of concern an individual experiences for the welfare of others, while emotional contagion occurs when an individual observing another has a parallel emotional experience

(e.g., McBane, 1995; Duan and Hill, 1996). Conversely, cognitive empathy is dened as the ability to understand another persons thoughts and feelings. It is also referred to as perspective taking (e.g., Pilling and Eroglu, 1994; McBane, 1995). Certain psychologists have refuted such a dichotomous view of the empathy construct by suggesting denitions that encompass both the affective and cognitive facets of empathy (e.g., Hoffman, 1984; Lazarus, 1991). Notably, Preston and de Waal (2002) proposed a denition of empathy that included processes related to perception-action behaviour. From this perspective, empathy is broadly viewed as the following: any process where the intended perception of the objects state generates a state in the subject that is more applicable to the objects state or situation than to the subjects own prior state or situation (Preston and de Waal, 2002, p. 4). Given the ambiguity in the conceptual denition of empathy, several operationalisations of this concept have been used in marketing literature. Following Davis (1983), certain studies in the marketing domain used a multidimensional operationalisation of the construct (e.g., McBane, 1995; Giacobbe et al., 2006; Homburg et al., 2009). Plank et al. (1996), however, developed a onedimensional scale of perceived empathy. While their scale contained both affective and cognitive indicators, a single factor model was found to be evident given the high correlation between the factors. A number of recent studies in marketing measured the empathy construct on a single scale (e.g., Escalas and Stern, 2003; Homburg and Stock, 2005, Mooradian et al., 2008). Drawing on the unied approach advocated by Hoffman and others (Hoffman, 1984; Lazarus, 1991), we further contend that empathy corresponds to a reexive construct, including embedded manifestations related to perspective taking, empathic concern and emotional contagion. Frontline employeecustomer interactions have been considered to be a fruitful area for the exploration of the effect of displayed empathy on marketing performance outcome. Results consistently showed that employee empathy is critical for understanding and satisfying customer needs (e.g., Aggarwal et al., 2005; Giacobbe et al., 2006; Drollinger et al., 2006). Accordingly, perceived empathy was identied as one of the ve dimensions of the SERVQUAL scale developed by Parasuraman et al. (1988) to measure perceived quality of service. In addition, certain researchers identied empathy as one of the psychological antecedents of satisfaction with complaint handling that needed to be measured properly (Miller et al., 2000). Remarkably, empathy was not formally addressed as a distinctive psychometric construct in the context of service recovery, even taking into consideration the obvious outcomes in terms of customer satisfaction. As outlined by Wieseke et al. (2012), prior research studies in service settings reveal considerable differences regarding the conceptualisation of empathy and the construct operationalisation. Empathy was suggested to some extent as being one possible manifestation of an interactional justice construct (e.g., Hocutt et al., 1997; Tax et al., 1998). Certain researchers used apology verbiage in vignette material (Roschk and Kaiser, 2012). Additionally, service recovery studies investigated related constructs as attentiveness (e.g., Davidow, 2003; Karatepe, 2006) or concern (Sparks and McCollKennedy, 2001), in which the empathy construct is apprehended through its empathic concern dimension to the exception of perspective-taking aspects. Moreover, the interactions under investigation were conned to face-to-face channels, disregarding other communication formats. Research is lacking as to the validity of the empathy construct, as well as its effectiveness when performed in an online context. 2.2. Gratitude Gratitude is an outcome of human interaction that provides an emotional basis for reciprocal behaviour. As stated by Fredrickson

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(2004, p. 150), gratitude is a positively valenced emotion that arises when an individual (beneciary) perceives that another person (benefactor) or source (e.g., God, luck, fate) has intentionally acted to improve the beneciarys well-being. Drawing on psychological literature concerning gratitude (Weiner, 1985; Becker, 1986; Fredrickson, 2004), the two following aspects of gratitude appear to be specically relevant to the purpose of this article: (1) gratitude is dependent on the recognition of a perceived effort exerted by another agent; and (2) gratitude tends to generate a sense of obligation to reciprocate. Psychological research has supported the theory that people who have been made to feel grateful by the actions of another tend to behave prosocially toward the benefactor (see for a review Tsang and McCullough, 2004). In addition, people are more likely to experience gratitude when they perceive that a favour is costly to the benefactor and given without regards to role-based obligations (Tsang, 2006). Despite the noticeable absence of marketing research concerning gratitude, a number of recent studies have investigated the role of feelings of gratitude on customer behaviour outside the context of complaint interaction (e.g., Morales, 2005; Palmatier et al. 2009; Kim and Lee, 2013). Relationship marketing investments, such as investment provided in the context of a shopping experience (e.g., a free cup of coffee, extra help, valuable information), was found to generate short-term feelings of gratitude that drive long-lasting performance outcomes, including intentions to repurchase or trust (Palmatier et al., 2009). Overall, these initial studies are consistent with the contention of researchers in psychology that gratitude represents the emotional core of reciprocity (Emmons, 2004).

route, satisfaction is expected to mediate the inuence of perceived empathy on relational outcomes. In the following sections, we formulate specic hypotheses regarding the abovementioned relationships. Fig. 1 depicts our conceptual framework. 3.1. Direct outcomes of empathy Perceived empathy reects the extent to which an individual assesses that his or her partner in communication shares his or her feelings by psychologically placing himself in the partners circumstance (Lazarus, 1991). Therefore, the relational process that consists of identifying a customers internal states and of understanding customer perspective might be interpreted by consumers as a form of intentional benevolence from a company representative. Feelings of gratitude are the expected affective response when a person receives benevolence from another (Palmatier et al., 2009). Accordingly, a customers recognition of effort by a customer service representative to understand emotionally and cognitively the customers circumstance during complaint handling that is, perceived empathy may cause the customer to attribute good motives to the representative and may lead the customer to have subsequent feelings of gratitude toward the company. We therefore posit the following: H1a. Perceived empathy has a positive inuence on customer gratitude. According to the conrmation/disconrmation perspective in the satisfaction literature (e.g., Oliver, 1980), customer transactional satisfaction is expected to develop when the individuals expectations regarding the episodic performance of a product or a service are met. Consistent with this perspective, the SERVQUAL model of Parasuraman et al. (1988) contends that expectations regarding perceived empathy as a particular dimension of service need to be fullled to achieve customer satisfaction. Given that the SERVQUAL model has been conrmed by numerous empirical replications, it offers a strong argument for considering perceived empathy as a signicant causal factor in transactional satisfaction. Moreover, in the context of service recovery, concern demonstrated on the part of the service provider, which is an important facet of empathy construct, was shown to strongly trigger customer reporting of

3. Model and hypothesis development The study introduces a model in which the inuence of perceived empathy in a complaint-handling interaction is fully conveyed by two distinct routes: gratitudinal or transactional. In the gratitudinal route, gratitude is assumed to mediate the inuence of empathy on critical relational outcomes of trust and commitment. In turn, trust and commitment predict repurchase intention. In the transactional

Fig. 1. The hypothesised model.

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transactional satisfaction (Sparks and McColl-Kennedy, 2001). Together, these results suggest that a higher level of empathy shown by a customer service representative will result in higher levels of customer satisfaction. We therefore posit the following: H1b. Perceived empathy has a positive inuence on transactional satisfaction. 3.2. Relational outcomes of gratitude Social psychology suggests that the affective state of gratitude serves as a moral motivator and increases benevolent behaviour toward a benefactor. In reciprocating anothers actions, individual efforts tend to focus on meeting the needs of the other. That is, feeling gratitude motivates the recipient to reward the giver and increases compliance with any subsequent requests from the giver (e.g., Goei and Boster, 2005; McCullough et al., 2001). In addition, we expect that gratitude is likely to increase customer compliance even when they are aware that their benefactor pursues commercial goals. Previous research has shown that such knowledge does not inhibit purchasing behaviour (Kang and Ridgway, 1996). Therefore, for customers who are experiencing feelings of gratitude due to a companys effort to maintain a relationship previously altered by some dissatisfaction, we expect that they are likely to act on their desires to repay the company by engaging in gratitude-based reciprocal behaviours (Palmatier et al., 2009). Such reciprocal behaviours will be pursued because they constitute appropriate responses given the expectations that consumers project concerning the company. Reciprocal behaviours are therefore expected to include commitment patterns reecting an enduring motivation to maintain a relationship with the target company (Morgan and Hunt, 1994). Thus, we posit the following: H2a. Gratitude commitment. positively inuences customer relationship

affects trust and loyalty. A careful examination of these later results suggests that transactional satisfaction explains repurchase intent or relationship commitment (Weun et al., 2004) to a lesser extent than trust (Kau and Elizabeth Wan-Yium, 2006; Kim et al., 2009). As satisfaction increases from meeting or exceeding the expectations of good complaint handling, it directly affects trust by strengthening the companys perceived reliability. However, transactional satisfaction can be insufcient in triggering increasing relationship commitment to the same extent. More so than trust, relationship commitment relies on an affective basis consisting of emotional attachment (Mohr et al., 1996; Kim et al., 2011). Similarly, it can be argued that gratitude emerging from complaint handling may have a stronger impact on relationship commitment than transactional satisfaction. Indeed, gratitude activates reciprocal behaviours from a relational affective appraisal of the interaction that matches the nature of relationship commitment more effectively than transactional satisfaction. We therefore posit the following: H3a. Transactional satisfaction positively inuences customer relationship commitment. H3b. Transactional satisfaction positively inuences customer trust. H3c. Transactional satisfaction will have a lesser inuence on relationship commitment than on trust. H3d. Transactional satisfaction will have a lesser inuence on relationship commitment than gratitude. 3.4. Outcomes of relational mediators We next consider the relationships between trust, commitment and repurchase intention. The conceptual model in this study replicates a classical relationship in which trust and commitment mediate the effects of relationship investments for instance, empathy on customer intention (Morgan and Hunt, 1994; DeWitt et al., 2008; Palmatier et al., 2009). We formally hypothesise these paths, although we test them empirically as a replication given that previous studies of complaint handling have already established them (e.g., Tax et al., 1998; Weun et al., 2004). We therefore posit the following: H4. Customer trust positively affects relationship commitment. H5. Relationship commitment positively affects repurchase intent. H6. Customer trust positively affects repurchase intent. 4. Research methodology 4.1. Data collection and sample Only companies with dedicated customer claim service support are the object of analysis in the present study, effectively eliminating small rms. This approach provides a higher level of internal validity due to the restriction of extraneous differences caused by heterogeneity among organisations. In particular, this choice will help to obtain data homogeneity regarding two organisational aspects of complaint handling: the customers direct and subsequently easier access to a company employee who possesses the capacity to handle the complaint and the professionalisation of this type of representative. We chose to study two main communication channels in the customer service context: phone and online channels. A survey approach was chosen to examine naturally occurring responses among customers who had recently experienced a service or product failure and a recovery encounter. Our research

According to psychological research, gratitude is assumed to have a signicant positive effect on an individuals evaluation of the trustworthiness of a benefactor that results in higher levels of trust (Dunn and Schweitzer, 2005). More generally, gratitude for benets received is assumed to increase a receivers positive emotional perceptions of the giver (Algoe et al., 2008). Thus, if gratitude induces positive emotional responses regarding the benefactor, it also should improve perception of that persons trustworthiness. Consistently, increased levels of gratitude have found to boost judgments of trust in a consumer context (Palmatier et al., 2009). We therefore posit the following: H2b. Gratitude positively inuences customer trust. 3.3. Relational outcomes of transactional satisfaction Given that complaint handling constitutes a critical stage of the relationship between a company and a customer, we believe that it is of primary importance to stress the direct links between transactional satisfaction and the chief relational mediators of loyalty as trust and relationship commitment. In support of this reasoning, loyalty, as measured immediately after a complaint, was found to depend more on transactional satisfaction than overall satisfaction that has accumulated over time (Homburg and Frst, 2005). As noted by Orsingher et al. (2010), only infrequent studies in recovery literature have examined the relational consequences of satisfaction. The inaugural research from Tax et al. (1998) addressed this gap by showing the negative effects of dissatisfaction with complaint handling on trust and commitment. Subsequent studies (e.g., Kau and Loh, 2006; Weun et al., 2004; Kim et al., 2009) conrmed that transactional satisfaction strongly

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design permitted a large variety of sector activities to be represented. This aspect of the research design ensured external validity across organisations in distinct industries. Data were collected from a sample of 148 undergraduate business students enroled in a research methods course. The research was presented as a scientic study of consumer satisfaction from a general perspective. Hence, the nature of the research model and the detailed research topic were not described. We collected data for our study in two steps. In a rst step, students were asked to report any dissatisfaction they had experienced as consumers during one six-week period. At the end of the period, students were asked to name the implicated companies. After the related customer services were examined by a research supervisor, they were found in their vast majority to have a dedicated customer service accessible via both phone and online channels. Companies that did not meet this criterion were eliminated. The remaining companies were randomly assigned to either the customer services phone or online channel. In a second step, students were asked to submit a complaint against these companies. Students were constrained to respect the customer service channel that had previously been specied for each company. Immediately after performing their rst interaction with the companys customer service, students were instructed to complete a series of scales designed to assess their perceptions of the complaint handling. This immediate report had the advantage of reducing the biases from memory lapses common in selfreports of service recovery (Smith et al., 1999). First interaction with customer service refers to either the rst phone conversation when considering the phone channel or the reception of the rst electronic response from a customer service representative when considering the online channel. In the latter case, we made an exception for automatic messages conrming only the complaint reception. In the absence of a response from a customer service representative after three separate calls over two-minute each or after a period of 15 days, respectively for phone and online channels, the complaint was described as unanswered. Due to difculties with the scheduling of students courses, some phone calls that had been planned for the end of the semester could not be performed, resulting in a lower number of interactions for the phone channel than the electronic channel. In total, 148 students completed the survey: 64 males (43%) and 84 females (57%). They were between 21 and 29 years old. They submitted an average of 3.05 complaints each, resulting in 451 submitted complaints. Customer service response rates were of 88.6% and 76.1%, respectively, for telephone and online channels. In total, 365 complaints were answered, subject to acceptable delays: 155 by phone and 210 online. With regard to the nature of the failures, respondents mentioned the following types of dissatisfactions: employees difculty in resolving problems and attending to consumers (34.3%), lack of product quality (29.2%), delays or service breakdowns (15.7%), product information and website design inadequacies (12.2%), environmental or consumer health issues insufciently addressed by company policies (5.8%) or other causes (2.8%). The sectors under investigation included nancial services (17.4%), convenience goods (16.5%), telephone/Internet (14.9%), retail (11.6%), transportation (10.5%), automotive (10.2%), health products and services (6.9%), housing (4.1%) and others (8%). 4.2. Measures The participants responded to a series of multi-item Likert measures on a nine-point scale ranging from completely disagree (1) to completely agree (9) to capture the constructs studied. All of the items appear in the Appendix. To measure perceived empathy with respect to the complaint encounter, we created a new scale because of the lack of existing scales related to a rms

complaint-handling context. Following standard psychometric scale development procedures (Gerbing and Anderson, 1988), we developed our scale based on a literature review. The empathy measure consists of ve items generated from previous research. The items cover such issues as cognitive ability, taking the perspective of a customer, or feeling and expressing an affective concern regarding a customers situation. Three items reect empathic perspective taking and were taken from empathy scales created by Plank et al. (1996), Homburg and Stock (2005) and Basil et al. (2008). The other two items refer to the expression of empathic concern and are derived from Bagozzi and Moores (1994) and Giacobbe et al. (2006) empathy scales. The other scales used in this research have been used in prior studies that report on their reliability and validity. Items whose loadings were less than .6 were systematically removed. Customers gratitude was assessed using a four-item measure developed by Goei and Boster (2005). Both the scales of trust and relationship commitment were originally used by Morgan and Hunt (1994) and then adapted by Adjei et al. (2010). Five of the seven items of their adapted trust scale were used. As for relationship commitment, the construct was assessed using their adapted measure with its rst item removed by us. Finally, the constructs of repurchase intent and transactional satisfaction were measured with scales from Maxham and Netemeyer (2003).

5. Results 5.1. Measurement model We evaluated the psychometric properties of the constructs by conducting conrmatory factor analysis (CFA) with AMOS 19.0 (Arbuckle, 2010). The t indexes indicated that the measurement model produced adequate t to the data, with 2 (260) 715.974 (p o .001), comparative t index (CFI) .965, incremental t index (IFI) .965, TuckerLewis index (TLI) .960 and root mean square error of approximation (RMSEA) .068. All factor loadings, which are reported in the Appendix, were also signicant (p o .001) in support of convergent validity. Cronbachs alphas were .90 or above, demonstrating good reliability. In addition, we conrmed discriminant validity, as the average variance extracted exceeded the square of correlations between constructs (Fornell and Larcker, 1981). We list the descriptive statistics and correlations in Table 1. 5.2. Structural model The hypothesised model, as depicted in Fig. 1, was estimated to assess path and explained variance estimates. The hypothesised structural model yielded a good t, with 2 (266) 735.969 (p o .001), CFI .964, IFI .964, TuckerLewis index, TLI .960 and RMSEA .069. As Table 2 shows, all paths were signicant at p o .001. They support all of the hypotheses from H1 to H6, with
Table 1 Means, standard deviations, average variances extracted and correlations. Constructs 1. Empathy 2. Gratitude 3. Transactional satisfaction 4. Relationship commitment 5. Trust 6. Repurchase intent Mean 5.42 3.77 5.57 2.51 5.72 5.04 SD 2.05 2.16 2.26 1.58 1.35 1.91 AVE .86 .92 .95 .80 .75 .87 1 .97 .70 .86 .50 .60 .52 2 3 4 5 6

.98 .66 .71 .58 .57

.95 .41 .95 .59 .53 .94 .45 .59 .70 .95

Correlations are reported below the diagonal; Cronbachs alphas are reported on the diagonal. p o .001 for all correlations. AVE average variance extracted.

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the exception of hypothesis H3a because transactional satisfaction was found to negatively affect relationship commitment. To validate this counter-intuitive result, we computed standardised total effects approximated from the bias-corrected bootstrapping method (e.g., Taylor et al., 2008) to assess the global inuence of transactional inuence on relationship commitment. The inuence remained negative but exhibited a weak amplitude (.17/.04, p o .01). The examination of mean values indicates that transaction satisfaction is notably higher than relationship commitment (5.6 versus 2.5) and is at a similar level as that of trust (5.6 versus 5.7). Thus, individuals experiencing high levels of transactional satisfaction form positive evaluations regarding company reliability. The episodic positive cognitive assessment reected by transactional satisfaction correlates with less motivation to maintain a close relationship with the brand. A possible explanation for this could be that customers who were previously poorly committed towards the implicated company are more likely to be favourably impressed by the relationship investments provided during the complaint handling because their expectations would have been lower than those of highly committed customers. Yet, in this case, transactional satisfaction is insufcient to change their initial brand commitment. Overall, the model explained 56% of the variance in transactional satisfaction, 49% in gratitude, 41% in trust, 55% in relationship commitment and 56% in repurchase intent. In summary, the hypothesised model depicted in Fig. 1 was primarily supported, and the model displayed a signicant ability to explain variance in the nal variable. 5.3. Mediation effects In addition to testing hypotheses (H1H6), we conducted posthoc analyses to gain additional insight into the mediating effects of gratitude, transactional satisfaction and empathy on the nal variable. To test for mediation, we compared our hypothesised model to three alternative models that included a direct effect path from the investigated mediator to repurchase intent (e.g., Holmbeck, 1997). The results of difference tests (see Table 3) revealed that the addition of the direct effect path did not signicantly improve model t over the hypothesised model. These results rst indicate that the respective effects of gratitude and transactional satisfaction on repurchase intent are fully mediated by trust and relationship commitment. Specically, the inuence on repurchase intent of each of the episodic mediators of empathy is completely mediated by trust and commitment accumulated over time-variables. Second, the results show that the effect of empathy on repurchase intent is fully mediated by both the gratitudinal and transactional chains of mediators, thus validating our view of two distinct routes conveying the inuence of this relationship investment. Building on the results from the mediation analysis, we did not nd any argument in favour of the revision of our hypothesised
Table 2 Hypotheses and path coefcients-standardised direct effect of the proposed model. Hypotheses H1a. Empathy-Gratitude H1b. Empathy-Transactional satisfaction H2a. Gratitude-Relationship commitment H2b. Gratitude-Trust H3a. Transactional satisfaction-Trust H3b. Transactional satisfaction-Relationship commitment H4. Trust-Relationship commitment H5. Relationship commitment-Repurchase intent H6. Trust-Repurchase intent All paths signicant at p o .001.

model. Given that several mediation effects are involved in our model, we used standardised total effects approximated from the bias-corrected bootstrapping method to assess the inuence of each predictor in the model (see Table 4). We rst investigated effects regarding the relative impact of transactional satisfaction and gratitude. The inuence of transactional satisfaction on trust is stronger than on relationship commitment (standardised effect comprised between .26/.47, p o .01versus .17/.04, p o .01), thus conrming H3c. The hypothesis H3d is also validated since transactional satisfaction inuences relationship commitment to a lesser extent than gratitude (.71/.84, p o .01). Together, these results conrm that post-complaint relationship commitment is primarily reinforced by feelings of gratitude and does not take
Table 3 Assessment of the mediation effects. Hypothesised model Nested model including a direct path between the antecedent and repurchase intent Gratitude Transactional satisfaction 735.76 (265) .964 .959 .070 .21 (1), p 4 .1 Empathy

Antecedent

2(df) CFI TLI RMSEA 2(df) test

735.97 (266) .964 .960 .069

734.22 (265) .964 .959 .070 1.75 (1), p 4 .1

733.65 (265) .964 .959 .070 2.32 (1), p 4 .1

Table 4 Standardised total effects approximated from the bias-corrected bootstrapping method. Dependent variables Independent variables Perceived empathy Trust Lower .50 bound Upper .61 bound Relationship commitment Lower .40 bound Upper .51 bound Repurchase intent Lower .39 bound Upper .49 bound Transactional satisfaction Gratitude Trust Relationship commitment

.26 .47

.25 .44

.00 .00

.00 .00

.17 .04

.71 .84

.15 . 30

.00 .00

.10 .24

.36 .49

.52 .67

.23 .39

All effects signicant at p o .01.

Standardised coefcients .70 .86 .70 .35 .37 .19 .23 .32 .53

t-Values 16.3 22.7 12.9 6.3 6.7 3.6 4.4 6.8 10.6

Hypothesis status Accepted Accepted Accepted Accepted Accepted Not accepted Accepted Accepted Accepted

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advantage of transactional satisfaction. In contrast, transactional satisfaction and gratitude contribute similarly to support postcomplaint trust. Second, we investigated the total effects contributing to repurchase intent. Among the cumulated over time-variables, the most important effect is due to trust (.52 and .67, p o .01), with relationship commitment exerting a more moderate inuence (.23 and .39; p o .01). With respect to episodic variables, empathy and gratitude exhibit noteworthy inuences on repurchase intent (.39/.49 and .36/.49, respectively; p o .01), while the total effects due to transactional satisfaction are modest but remain signicant (.10/.24, p o .01). Given that the measures for both the independent and the dependent variables come from the same source, common variance may have overstated the strength of the observed relationships between the constructs in our model. We controlled for the portion of common variance by re-estimating the structural model. The re-estimation included a directly measured singlesource rst-order factor added to the indicators of all the latent variables in the model (Podsakoff et al., 2003). To achieve the model convergence, we specied all loadings of the method factor as being of the same size, reecting the assumption that common variance affects all items equally (Rindeisch et al., 2008; Homburg et al., 2011). We found that the estimates of our structural model remained virtually unchanged after we introduced the method factor. The proportion of variance in each observed indicator (computed as the square of the item loadings) explained by its focal construct substantially exceeded the variance explained by the method factor. Collectively, this analysis suggests that method variance does not materially affect our conclusions. 5.4. Multi-group analysis: online versus ofine Our hypothesised model encompasses both online and ofine interactions, building on the assumption that empathy may exhibit construct and nomological equivalences across both channels. In support of this postulate, we rely on the social information processing theory of computer-mediated communication (Walther, 1992). This theory argues that communicators deploy whatever communication cue systems they have at their disposal when motivated to form impressions and develop relationships. When most non-verbal cues are unavailable, as is the case in text-based communications, users adapt their language and style, thereby adopting alternative cues for such purposes (Walther et al., 2005). We tested the factorial and structural equivalence of our model, as suggested by previous literature (Jreskog and Srbom, 1996; Steenkamp and Baumgartner, 1998; Cheung and Rensvold, 1999). We rst examined the t of an unconstrained baseline structural model using multi-group analysis in AMOS 19.0. The results suggested a satisfactory t with the data (2 1096.183; df 532; p o .01; CFI .958; IFI .958; TLI .952; RMSEA .054). Second, we examined a constrained model with factor loadings invariant across the two groups (measurement weights model). The results suggested that the t was also satisfactory (2 1121.108; df 551; CFI .957; TLI .957; IFI .953; RMSEA .053). To examine factorial invariance, we compared the measurement weights model with the baseline model by comparing the 2 difference (2 24.925; df 19; p 4 .1). The nonsignicant 2 test ensured the existence of factorial invariance, which allowed us to be condent in comparing path coefcients between the two groups. We then specied a constrained model with all paths and all factor loadings set to be equal between the two groups. We compared this structural weights model with the measurement weights model. The 2 difference (2 18.379; df 9; p o .05) was found to be statistically signicant. Therefore, based on modication indices tests

(Byrne et al., 1989), paths with signicant test statistics were released stepwise until the further removal of constraints failed to enhance model t. The resulting model included two parameters (trust-repurchase intent and relationship commitmentrepurchase intent) that were released to be different. This model produced the following t statistics: 2 1127.567; df 558; p o .01; CFI .958; IFI .958; TLI .952; RMSEA .054. In addition, the 2 difference test (2 6.459; df 7 and p 4 .1) was found not to be statistically signicant. This nal test conrmed the existence of structural invariance between telephone and email channels, with the exception of both paths relating trust and relationship commitment to repurchase intent. That is, our study shows that the inuence of perceived empathy may be conveyed in a similar manner in terms of communication efciency through phone and text-based channels as advanced by Walther (1992). Moreover, it is here suggested that such a congruent pattern can be achieved within a single interaction without extended communication time.

6. Discussion 6.1. Research issues This study demonstrates that the inuence of empathy on postcomplaint repurchase intent is fully conveyed by two different routes involving gratitude and transactional satisfaction. It advances academic knowledge regarding service recovery in several ways, including the importance of gratitude, the mediating role of trust and commitment, the differentiated nature of interactional input and channel invariance. First, this study supports the role of gratitude in understanding the effects of a rms relational investment in complaint handling, thus extending the research of Palmatier et al. (2009) in this specic context. One important nding is that the impact of gratitude on repurchasing is signicantly stronger than that of transactional satisfaction. This result outlines the modest role of transactional satisfaction regarding repurchase intent. Despite the suggestion of a limited inuence in previous recovery literature, our study establishes it without resorting to the use of overall satisfaction in the model that reects a cumulative satisfaction over time (e.g., Orsingher et al., 2010; Gelbrich and Roschk, 2011). Overall, the study notes that marketing research that neglects gratitude and focuses exclusively on satisfaction as a key variable may fail to capture the full effects of service recovery. Our results also suggest that the addition of gratitude to complaint-handling satisfaction models may be more effective than overall satisfaction in assessing the immediate effects of customer perception on repurchasing. Second, our study indicates that the effects of gratitude and transactional satisfaction themselves are fully mediated by trust and relationship commitment. To our knowledge, this study is the rst to estimate how key relational variables, such as trust and commitment, mediate episodic mediating variables. Although DeWitt et al. (2008) established that trust has a full mediating role between perceived justice and loyalty, they have not investigated the relationship commitment contribution. The approach used in this study reveals distinct mechanisms of relational mediation: whereas trust benets quite similarly from transactional satisfaction and gratitude, the role of gratitude unlike transactional satisfaction is crucial in reinforcing post-complaint commitment. This nding suggests that post-complaint commitment relies on a more affective basis than trust and is particularly sensitive to reciprocity appeals, at least in the immediate time following the complaint interaction. As a third theoretical contribution to recovery literature, we showed that perceived empathy leads to customer gratitude in

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addition to transactional satisfaction. We provided a valid scale to measure the construct in a complaint interaction context. The existence of a strong, signicant path between empathy and gratitude suggests that customers may interpret the empathy exhibited by a customer service representative as a form of benevolence revealing a relational extra effort beyond contractual or role-based obligations (e.g., Morales, 2005; Tsang, 2006). In that respect, the interactional aspects of complaint handling may be theoretically distinguished according to the extent to which they can be understood as satisfying discretionary investment versus mandatory relational requirements such as respect, courtesy or politeness, all three of which constitute the core of interactional justice (e.g., Bies and Moag, 1986; Karatepe, 2006). It is therefore expected that interactional discretionary inputs will contribute more strongly to gratitude than mandatory inputs. Additionally, our results suggest that empathy should not be included as a facet of the interactional justice construct, at least when considering models of which gratitude is a part. Lastly, the study revealed that both gratitudinal and transactional routes are not altered by the electronic versus telephonic nature of the channel, i.e., empathy can be supported by different channels other than face-to-face interactions. Thus, customers are able to recognise intention and personal affect when mediated by electronic devices, implying that customer service representatives can succeed in nding linguistic cues to express their empathic posture. The social information processing theory has postulated that extended time is a key determinant in whether computermediated communication achieves the same level of intimacy as face-to-face communication (e.g., Walther, 1995; Ramirez et al., 2007). However, given that the strength of the path between empathy and gratitude remain unchanged whatever the channel, our results suggest that customers needed no more interaction to compensate for the absence of non-verbal cues in perceiving empathy and deriving gratitude from it. A partial explanation of this result can be found in the expertise of service customer employees who are trained to write polished and meticulous responses whether the communication is in the form of a letter or an email. 6.2. Managerial issues While our research suggests that retailers should strive to offer customers empathic complaint handling to encourage feelings of gratitude, it also suggests avenues for affecting customer intent. First, it appears that being empathetic to a customer complaint is so critical that hiring and training processes should be focused on the ability of customer service representatives to be empathetic and practice empathetic behaviour in complaint-handling interactions. Previous research has clearly established that training programmes send a strong signal to employees regarding top managements commitment to required behaviours (Babakus et al., 2003). In addition, training can improve technical skills (Karatepe and Karadas, 2012) that will allow them to go beyond expected formal role requirements when handling empathic interactions. Managers should therefore help customer service representatives to clearly distinguish between empathy and classical role-based communication in the customer service support role. That is, empathy must be taught to customer service representatives as a more critical part of interactional performance that includes additional communication roles, such as expressing emotional contagion, whereas politeness, courtesy and a respectful posture should be presented as a preliminary level of interactional performance. Systematic training is required to help employees master cognitive and emotional facets of empathic behaviour, i.e., perspective taking and exhibiting emotional concern. Particular attention should be

devoted to the specic requirements necessary for expressing empathy online. Customer service employees must ensure that their emails or other electronic messages express their understanding and interest in the customers situation in a perceptible way, despite the propensity of email and other electronic messaging to be more concise and less engaging than face-to-face communication. Furthermore, customer service employees must be made aware and accept the necessity of extended interaction time, including multiple interactions, if appropriate, in electronic messaging. Second, our study takes a rm stand on the need to monitor customer gratitude as a key indicator of customer service performance in the same manner as monitoring customer satisfaction with complaint handling. Indeed, gratitude is a better trigger of repurchasing than transactional satisfaction. Measures of gratitude must be systematically included in customer satisfaction surveys that companies regularly issue. In addition, because gratitude pertains to short-term feelings, companies should give customers the opportunity to reciprocate soon after providing them with complaint-handling benets. For example, companies could contact complainants with a coupon offer. This offer would provide the complainant an opportunity to act on his or her feelings of gratitude and would most likely lead to an immediate repurchase. Furthermore, given that relationship commitment benets from post-complaint feelings of gratitude, managers should use this advantageous situation by presenting to customers renewed opportunities to join brand-oriented social communities or loyalty programs. Given that trust is signicantly increased by successful complaint handling, customers would be less concerned by privacy (Culnan and Armstrong, 1999) and more likely to selfdisclose when joining such communities or programs.

7. Limitations and future research Although this study expands upon our knowledge of complaint handling, it is tempered by some limitations. First, our study uses a cross-sectional survey method of data collection focusing on a single interaction with customer service representatives. Thus, the results neglect possible delayed complementary actions on companies behalf. A longitudinal approach would be necessary to investigate the extent to which feelings of gratitude remain predictors of repurchase intent over time. Second, the use of a student sample is a limitation. Compared to other customer segments, students may differently evaluate service recovery due to socio-demographic characteristics or the more limited scope of their consumption experiences (e.g., Orsingher et al., 2010). Although these features do not make students less appropriate for this study than any other customer group, the method raises concern about the generalisability of the effect sizes from this given segment. Third, the fact that the participants were asked to submit a complaint may be a limitation, even if their claims were duly motivated by dissatisfactions that actually emerged in the course of their everyday lives. Constrained complainers might be in a different emotional state than spontaneous complainers. Replications of the study with both spontaneous and constrained complainers would help to identify the boundary conditions for the generalisation of the model. Future research will need to consider additional variables to better understand how feelings of gratitude vary depending on the nature of the perceived properties of a companys investment. In this respect, the authors recommend studying other interactional inputs, such as politeness, courtesy or apology, because these constitute major aspects of how companies actually aim to manage the human aspect of complaint handling. Another question of interest is the extent to which other investment categories, apart from interactional inputs, are able to elicit gratitude in

F. Simon / Journal of Retailing and Consumer Services 20 (2013) 599 608 Table A1. Constructs (Scale Sources): Items Perceived empathy (items from respectively Bagozzi and Moore, 1994; Plank et al., 1996; Homburg and Stock, 2005; Basil et al., 2008; Giacobbe et al., 2006) My complaint caused the customer service representative to have feelings of concern for me. This customer service representative really understood my feelings. This customer service representative tried to adopt my perspective. This customer service representative put himself (herself) in my shoes. This customer service representative seemed to personally care about me a great deal. Customers gratitude (Goei and Boster, 2005) I feel grateful to this company I feel thankful to this company I feel appreciative toward this company. I feel a sense of gratitude to this company. Transactional satisfaction (Maxham and Netemeyer, 2003) In my opinion, the customer service provided a satisfactory resolution to my problem on this particular occasion. I am not satised with the customer services handling of this particular problem.(1) Regarding this particular event (my recent problem), I am satised with the customer service. Repurchase intent (adapted from Maxham and Netemeyer, 2003) I would be willing to purchase products or services from this company again. In the future, I intend to purchase products or services from this company. The likelihood that I would buy products or services from this company again is very high. Trust (Adjei et al., 2010) XYZ can be trusted completely. XYZ can be counted on to do what is right. XYZ is a company that I have great condence in. XYZ is perfectly honest and truthful. XYZ is always faithful Relationship commitment (Adjei et al., 2010) The relationship that I have with XYZ: is very important to me. is something I intend to maintain indenitely. is very much like being family. is something I really care about. deserves my maximum effort to maintain. Standardized loadings

607

t-Values

.90 .92 .97 .96 .89 .97 .98 .95 .93 .96 .98 .98 .94 .97 .89 .87 .85 .87 .89 .84

29.3 33.8 33.5 26.6

60.7 47.1 39.5

55.8 54.0 29.7 32.0

21.9 22.9 23.7 21.2

.90 .88 .85 .89 .95

23.0 23.0 25.1 29.2

(1) Item was reverse-coded. (2) All items were measured using nine-point scales anchored by 1 completely disagree and 9 completely agree, unless otherwise stated.

complaint handling. Therefore, research should also consider procedural and distributive service recovery investments and assess their different contributions to both the gratitudinal and transactional routes to loyalty.

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Acknowledgements We thank Dr. Laurent Grimal, Head of the Marketing Department at PEPS Faculty in Colmar, France, who encouraged this research.

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