Guest article by Dorottya Varga, finalist of the 2022 SERVSIG Best Dissertation Award.

The increasingly diverse and complex interactions through various offline and online channels require organizations to carefully manage the key actors at their frontline: employees and customers. While service organizations generally strive for smooth employee-customer interactions, several tensions remain leading to negative employee, customer and organizational outcomes. These trends inspired my dissertation entitled “Time to step up: a multi-perspective approach on understanding and managing tensions at the organizational frontline”. The dissertation identifies and investigates two major tensions at the organizational frontline: customer mistreatment and service failures. Specifically, the research explores from the employee perspective (1) how customer mistreatment affects employees (and bystander customers) and (2) whether reprimanding customers is a potential solution, and from a customer perspective, (3) how organizations should address service failures and customer complaints through a journey lens, and particularly (4) how organizations should handle online reviews through webcare.

Taking an integrated perspective, these tensions can be explained by a negative exchange spiral in employee-customer service interactions, where the outcome of one negative exchange is input for another (Groth and Grandey, 2012). 

From the employee perspective, we show that customer mistreatment has detrimental impact on employees’ emotional, cognitive, and behavioral resources in both the short and long term. Negative interactions with customers do not only impose psychological costs to employees but also real financial costs to organizations, for example, in terms of increased absences, counterproductive work behavior or turnover. Furthermore, customer mistreatment can spill over to bystander customers or other employees who observe the negative encounter, which can have an adverse impact on multiple emotional and cognitive outcomes creating additional spirals in other interactions. 

One way to break the spiral might be reprimanding customers as a reaction to customer mistreatment. Customer reprimand can be adapted to the type of customer mistreatment, and if carried out politely and under the right circumstances (i.e., considering linguistic style, severity, communication mode), can be an effective solution to break the negative interaction between the employee and the customer, as well as to stop the spillover effect on bystander customers, and in certain cases, on mistreating customers themselves. 

On the other side of the spiral, customer mistreatment is often a direct result of customer dissatisfaction, anger or rage, that usually stems from perceived service failures (i.e., poor organizational / frontline employee performance). Undetected service problems and ineffective complaint handling could cost organizations a lot. The most recent National Rage Study (CCMC 2020) shows that corporate America is risking almost 500 billion dollars in revenue by doing customer care the wrong way. Thus, recovering service failures and addressing customer complaints to break the spiral is of utmost importance for organizations to achieve high customer satisfaction and loyalty. 

Taking a dynamic approach, organizations can improve their responses to service failures and customer complaints throughout different phases in the customer experience by simultaneously designing the offline and online service recovery journey (i.e., pre-recovery, recovery and post-recovery) together with the regular customer journey. 

The increasing importance of online communication can cause negative customer reactions to reach hundreds or thousands of other consumers creating multiple additional spirals that may lead to online firestorms. Organizations might be able to break the negative online exchange spiral with customers, and additional spirals with virtually present others (VPOs) by applying effective webcare management taking into account webcare content (what?), design (how?), timing(when?), and source (who?).

Although, the negative exchange spiral is not new and has been highlighted by both research and practice, we need a better understanding of the true organizational cost of different tensions at the frontline and how service organizations can break the negative reciprocal employee-customer interactions. With the rise of new technologies, and the changes brought about by Covid-19, it is particularly interesting to examine this phenomenon in the digital era.

Dorottya Varga, Ph.D.
Senior Researcher
imec-SMIT, Vrije Universiteit Brussel

Customer Care Measurement and Consulting (CCMC) (2020). 2020 National Customer Rage Survey.
Groth & Grandey (2012). From bad to worse: Negative exchange spirals in employee–customer service interactions. Organizational Psychology Review 2(3): 208-233.

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