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Conservative Choice, Service Failure, and Customer Loyalty: Testing the Limits of Informed Choice

The Pennsylvania State University

Previous research has suggested that an informed choice maintains or increases loyalty as a result of causing customers to share the responsibility for service failures. The research, however, was only with risky choices— high payoff with high chance of service failure. For example, a table with a good view, but in demand and in a busy section, may have slow service. Does an informed choice maintain or increase loyalty when the alternative chosen is a conservative choice—low payoff with low chance of service failure? If the effect is because of empowerment alone, it should not extend to a conservative choice because the information indicated a low chance of failure. However, if the effect is also from a respect for disclosure the effect should extend because a failure outcome does not change the fact of disclosure. The studies, one in the lab and one in the field, test this suggestion.

Key Words: choice • service failure • foreseeability • empowerment • disclosure • loyalty

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