Discount reference moderates customers' reactions to discount frames after online service failure

Seyed Shahin Sharifi*, Hashem Aghazadeh

*Corresponding author for this work

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

This paper aims at investigating customers' reactions to discounts as service recovery offered in context of an online store. It argues that customers prefer dollar-off discounts to percentage-off discounts. The present research also argues that for discounts on price of one item out of several items, customers evaluate dollar-off discounts more positively (i.e., higher satisfaction and lower anger), while for discounts on the total price, customers react similarly to percentage-off and dollar-off discounts. Two online experiments confirm these arguments. This research discusses the importance of discount reference in online service recovery and represents effective service recovery regarding discount reference and discount frame as its practical implications.

Original languageEnglish
Pages (from-to)4074-4080
Number of pages7
JournalJournal of Business Research
Volume69
Issue number10
DOIs
Publication statusPublished - 1 Oct 2016
Externally publishedYes

Keywords

  • service recovery
  • discount frame
  • discount reference
  • satisfaction
  • anger

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