EFFICIENCY OF SERVICE RECOVERY COMPENSATION TYPE – A STUDY OF CROATIAN CONSUMERS

This paper examines the efficiency of different service recovery compensation types, namely monetary, quasi-monetary and non-monetary compensation. All compensation types had the same economic cost for the company. Manipulation was conducted with the use of hypothetical scenarios within the experimental design. Experimental manipulation was satisfactory as indicated by the linear regression results. ANOVA was used for the analysis of average differences among service recovery compensation types. Results have shown that consumers prefer monetary compensation (greatest efficiency) above the quasi-monetary and non-monetary compensation. There were no significant differences between quasi-monetary and non-monetary compensation types. In case of severe service failure managers should give consumers a monetary compensation as a way of restoring their satisfaction. In cases of milder service failures quasi-monetary or non-monetary compensation are equally efficient in restoring satisfaction.