Organizational responses to consumer complaints: an approach to understanding the effectiveness of remedial accounts

Failures are common in business and lead to negative repercussions for organizations. However, through the use of explanations, firms can diminish the negative consequences of their failures. Unfortunately, researchers do not have a clear idea about why one type of explanation is better than another. The current study examined organizational explanations (including excuses, justifications, and apologies) to determine which components of these explanations work to make a difference in consumer satisfaction following a service or product failure. Results indicated that explanations that were considered believable, appropriate, considerate, and accepting of responsibility made a difference in the way consumers perceived organizations that failed them. Specifically, organizational communication that included these components were more likely to lead to an increased willingness to conduct business with an organization in the future, increased positive perceptions of company credibility, increased satisfaction with an organizational response, decreased perceptions of negativity about the failure episode, and decreased perceptions of company control over a failure than communication that did not include these components. Additionally, results showed that excuses, justifications, and apologies also functioned independently of believability, appropriateness, consideration, and responsibility to influence consumers' perceptions of their organizations. The presence of excuses led to lower perceptions of company control and higher perceptions of negativity about a failure episode. The presence of justifications led to lower perceptions of negativity and the presence of apologies led to increased perceptions of negativity. These results combined with the results from the hypotheses suggest that the hypothesized components of explanations and the form of explanations used in remedial responses both influence people's perceptions of organizations and organizational responses following complaints about a failure.