A WSU doctoral student recently won the Best Student Paper Award for a paper that takes a new approach to assessing how customers feel about restaurant service failures.

Ismail Karabas, a Ph.D. candidate in the WSU Carson College of Business’s Department of Marketing and International Business, was the lead author of the paper he submitted to the March national Market Theory and Practice Conference. WSU associate professor Jeff Joireman and Ph.D. candidate Shinhye Kim co-authored the paper.

While the bulk of marketing research is on the interactions between the server and customer involved in a service failure, the paper focused on how third-party customers view these incidents.

“This paper is about a new direction in service failures,” Karabas said.

The hypothesis is that service failures cause third-party customers who witness the event to view the employee responsible and the restaurant negatively, and then to punish both accordingly.

“We are looking at the third-party reaction as the function of observing the interaction between the complaining customer and the service employee,” Karabas said. “We use the restaurant as the context.”

The study is broken down into three different experiments. The first experiment had 524 undergraduate business students imagine they were eating at a restaurant with friends when they hear an interaction. Each undergraduate was then given one of nine different scenarios where a customer complaint was either low, high or high-repeat, and the employee response which was either negative, neutral or positive.

In the first experiment, the researchers found the third-party customers’ desire to tip the employee decreased when the employee acted in a negative way toward the customer offering the complaint. The third-party customer’s desire for revenge towards the server increased as well, according to the paper.

“The way we measured revenge was on an established [five item] scale,” Karabas said. “Some of the items would read, ‘do you have a tendency to get even with this server [or] do you have a tendency to want to give out what this server deserved?’ ”

The public gravitation toward “negative tendency” is an element that can be found throughout the marketing research practices, Karabas said. This element was seen in the results of the first and second experiments of the study.

In the second experiment, Karabas and his colleagues found the majority of 423 undergraduate business students would also be less likely to recommend the restaurant when the employee engages a complaining customer negatively, according to the paper.

In the third and final experiment of the study, the hypothetical scenarios introduced to 398 participants from Amazon Mechanical Turk included the new element of a manager apologizing to the customer for the service failure, according to the paper.

With this variable, the researchers found that third-party customers would not see the restaurant as a whole as responsible for the incident, and therefore, the restaurant would be forgiven for the service failure. However, the observers would still punish the server responsible for the failure, according to a WSU News release.

Overall, the paper forms three practical conclusions. The first is that employees, no matter the situation, should never respond negatively toward a complaining customer, whether the complaint is warranted or not.

“What we find is when the server responds negatively, the third-party reaction is more negative,” Karabas said. “So what happens is the server gets less tips when the server responds negatively, regardless of what the customer says or does.”

If the customer is the guilty party or the one in the wrong, other customers will still look down upon an employee’s negative response, Karabas said. The response could include punishment of both the employee at fault and the establishment as a whole. This is due to negative tendency bias, which leads to negative responses and negative word-of-mouth from third party observers, according to the paper.

“[Companies need to] make sure to tell employees that under no circumstance is it a good idea to respond negatively,” Karabas said. “It not only has the obvious effect toward the company, but also it has significant negative effects toward the employees.”

The final conclusion the researchers made in the paper was that employees received no reward for a positive response to a customer complaint in relation to a neutral response. The positive response included an apology for an order which may be overdue, while the neutral response was something like “I put your order in, let me double-check,” Karabas said.

“This paper suggests you do not have to go around and always be positive and bend over backwards basically,” Karabas said. “There is also reason to stay neutral, because what we find is third-party observers do not differentiate their reactions between a neutral server response and a positive server response.”

The researchers submitted a final draft of the paper “How Third Party Observers Respond to Overheard Service Failures: Implications for Frontline Service Employees and the Firm” to a leading journal for publication. The paper is currently in the peer-review stage.