Guchait 2019

International Journal of Contemporary Hospitality Management
Examining stealing thunder as a new service recovery strategy: impact on

customer loyalty
Priyanko Guchait, Rachel Han, Xingyu Wang, JéAnna Abbott, Yetong Liu,
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Priyanko Guchait, Rachel Han, Xingyu Wang, JéAnna Abbott, Yetong Liu, (2019) "Examining stealing
thunder as a new service recovery strategy: impact on customer loyalty", International Journal of
Contemporary Hospitality Management, https://doi.org/10.1108/IJCHM-02-2018-0127
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Impact on
Examining stealing thunder as a customer
new service recovery strategy: loyalty
impact on customer loyalty

Priyanko Guchait, Rachel Han, Xingyu Wang, JéAnna Abbott
and Yetong Liu Received 8 February 2018
Conrad N. Hilton College of Hotel and Restaurant Management, Revised 20 June 2018
University of Houston, Houston, Texas, USA 26 September 2018
Accepted 2 October 2018
Abstract
Purpose – This paper aims to examine how stealing thunder, apology and compensation influence
customer loyalty in a service failure context, and how trust mediates these relationships.
Design/methodology/approach – The study adopted a scenario-based between-group experimental
design involving 300 customers.
Findings – The results indicated that stealing thunder, apology and compensation have a joint effect on
customer loyalty. Specifically, this study found a significant positive impact of stealing thunder on loyalty; a
two-way interaction effect of compensation and stealing thunder on loyalty; and a three-way interaction effect
on loyalty. Additionally, trust mediated the relationship between service recovery attributes (stealing thunder,
apology and compensation) and customer loyalty.
Originality/value – This study introduces a new service recovery method called Stealing Thunder, which
is commonly used in the fields of law and communication and is the first to assess stealing thunder as a
proactive/preemptive strategy to handle service failures and its impact on customer loyalty. The study found
that when stealing thunder was present, compensation had no influence on customer loyalty. Moreover, when
stealing thunder was present, compensation had no impact on loyalty when apology was not present.
However, compensation had a significant effect on loyalty when stealing thunder and apology were not
present. This study finds the value of including proactive/preemptive strategies (stealing thunder) along with
regular service recovery strategies (e.g. apology and compensation) in the service recovery process. Results
show that service recoveries that include stealing thunder help service failure recovery significantly by
increasing customer’s trust.
Keywords Customer loyalty, Service recovery, Stealing thunder
Paper type Research paper
Introduction
As service is human-related, zero-defect service is unrealistic (Mattila, 1999; Namkung
and Jang, 2010), and service failure is inevitable (Dabholkar and Spaid, 2012). When a
service failure occurs, customers get upset and also lose trust in the organization (Basso
and Pizzutti, 2016), which consequently leads to customer defection and dissatisfaction,
as well as negative word of mouth. (Kim and Jang, 2014). Dissatisfied customers also
complain privately through negative word of mouth to family and friends (Bradley and
Sparks, 2015). Moreover, the rise of electronic word of mouth channels has greatly
increased customers’ opportunity to publicly express their complaints (Bradley and
Sparks, 2015). Such negative online reviews can attract wide audiences, are perceived International Journal of
as credible and play a critical role in affecting views and purchasing behaviors of Contemporary Hospitality
Management
customers (Sparks and Browning, 2010). Therefore, service recovery plays an © Emerald Publishing Limited
0959-6119
DOI 10.1108/IJCHM-02-2018-0127
IJCHM important role in changing customers’ attitudes and behaviors toward service
providers.
Service recovery is the strategic action a service provider takes to cope with the service
failure and convert a previously dissatisfied customer into a loyal customer (Lin et al., 2011).
It can be beneficial for a restaurant in many ways. Appropriate service recovery is the key to
changing the customer’s attitude (Ha and Jang, 2009). An effective service recovery strategy
is likely to increase customer trust toward the restaurant (DeWitt et al., 2008). Furthermore,
restaurants may gain more loyalty and favorable customer ratings from successful service
recovery, resulting in restaurants becoming more popular (Mattila, 1999). Most importantly,
effective service recoveries after a failure can have significant impact on firm performance.
An organization’s ability to produce repeat purchase has a critical monetary significance
(Silber et al., 2009). The cost of retaining a customer is about 20 per cent of the cost of
earning a new customer, and an increase of 5 per cent in returning customers can produce an
increase of 25 to 125 per cent in firm profitability (Kotler et al., 2006).
Researchers have studied different types of service recovery, such as making an apology,
taking initiative, speedy recovery, providing compensation and using managerial
intervention (Hoffman et al., 1995; Van Vaerenbergh et al., 2012). Various service recoveries
can have different influences on a customer’s repurchase intentions, word of mouth (WOM)
and satisfaction (Gelbrich and Roschk, 2011). Silber et al. (2009) argued that outcomes of a
specific type of service recovery may vary based on whether the recovery action was
preferred by the customer. Compensation could increase repurchase intentions and
customer satisfaction (Grewal et al., 2008; Smith et al., 1999). A speedy recovery could also
result in higher customer satisfaction. Dabholkar and Spaid (2012) suggested that the more
immediate problem resolution the restaurant provided, the higher the customer satisfaction.
Smith et al. (1999) demonstrated that an apology could have a positive impact on customer
satisfaction. Van Vaerenbergh et al. (2012) also found that customers who received process
recovery communication reported higher satisfaction, positive word of mouth, and
repurchase intentions.
Stealing thunder
Stealing thunder, commonly seen in legal and political cases, is a strategy for people who
made a mistake to report it to the public before other people or the media expose the problem
(Arpan and Roskos-Ewoldsen, 2005). Wigley (2011) reported it as a way to be the first to
report the negative or damaging information about oneself. Lee (2016) indicated that
stealing thunder by an organization means that the organization brings the mistake to light
to show the public about the negative, potentially damaging information. Previous research
based in communication, law, and crisis management has found that the notion of stealing
thunder creates several benefits. Arpan and Pompper (2003) indicated that an organization
would get positive reaction from consumers after the organization revealed potential
negative information. Arpan and Roskos-Ewoldsen (2005) demonstrated that the defendants
could get more positive decisions or lighter adjudication during jury trials when they took
the initiative to report the mistake. Claeys et al. (2013) demonstrated that when an
organization uses stealing thunder, it can restore their reputation.
Research gaps and contributions

Despite significant advances in both the stealing thunder and service recovery
research, several research gaps still needs to be filled. First, stealing thunder is widely
used in the context of law and public communications. No research to date in the
hospitality industry has investigated stealing thunder, specifically its influence on
customer behavioral intentions (e.g. loyalty, positive WOM, negative WOM and Impact on
repurchase intentions), as a service recovery strategy. To better understand how customer
service recovery strategies influence customer behavioral intentions, this study uses
the justice/fairness theory as the theoretical framework (Tax and Brown, 1998; Wirtz
loyalty
and Matilla, 2004). Perceptions of fairness have been found to influence customers’
post-recovery reactions (Tax and Brown, 1998). Customers assess procedural,
distributive and interactional fairness when service providers try to regain customer
satisfaction through service recoveries (Choi and Choi, 2014; Wirtz and Mattila, 2004).
Researchers have mostly used these three dimensions of fairness to justify the
effectiveness of service recoveries. However, scholars have also applied a fourth
dimension called informational fairness (Colquitt, 2001; Cranage and Mattila, 2005). For
the first time, this study argues that stealing thunder would be effective in restoring
customer perceptions of procedural and informational fairness.
Second, research in organizational fairness shows that the fairness dimensions are
interconnected (Wirtz and Mattila, 2004). Scholars have identified compensation as a

service recovery strategy that can enhance customer perceptions of distributive fairness;
speed of recovery has been linked to customer perceptions of procedural fairness; and
apology has been strongly linked to customer perceptions of interactional fairness
(Smith et al., 1999; Tax and Brown, 1998; Mattila, 2001). Examining the three-way
interaction effect of these forms of fairness, Wirtz and Mattila (2004) identified that
compensation is effective only when the service recovery process is delayed or when an
apology is not present. Therefore, investigating the influences of service recovery
strategies in a holistic way becomes critical (Ok et al., 2005). However, there is no
research demonstrating how initiating the communication of a mistake by the service
provider (i.e. stealing thunder) will interact with apology and compensation to impact
customer loyalty. First, the current research investigates how stealing thunder affects
customer loyalty. Second, the study examines how stealing thunder impacts the
relationship between compensation and loyalty (i.e. two-way interaction effect of
stealing thunder and compensation). It is argued that when stealing thunder is present,
compensation will not impact customer loyalty. Third, the study investigates the three-
way interaction effect of stealing thunder, compensation and apology on customer
loyalty. It is argued that when stealing thunder is present, compensation does not
influence loyalty when apology is present. This study finds the importance of including
proactive/preemptive strategies (stealing thunder) along with regular service recovery
strategies (e.g. apology and compensation) in the service recovery process.
Finally, research suggests that trust could be an effective mediator between
service recovery strategies and customer behavioral intentions. Scholars have
demonstrated that service failure impacts customer trust (Weun et al., 2004). And
customer perceptions of trust have been found to influence customer loyalty,
attitudes, and behavioral intentions (Dewitt et al., 2008; Kim et al., 2009). However,
hospitality scholars have not empirically tested the relationship between stealing
thunder, a service recovery strategy and trust. Nor has anyone examined the
mediating effect of trust between stealing thunder and customer loyalty. Although
previous research has examined the influence of overall fairness perception on trust,
and the relative influence of interactional, procedural, and distributive fairness on
trust, no research has examined the interaction effect of the fairness dimensions on
trust. Overall, this study examines the mediating effect of trust between the three-
way interaction effect of stealing thunder (procedural fairness and informational
IJCHM fairness), apology (interactional fairness) and compensation (distributive fairness) on
customer loyalty.
Literature review and hypothesis development

Service failure and service recovery
Service failure has been widely studied and been defined as service quality below customers’
expectation (Augusto de Matos et al., 2009; Hwang and Ok, 2013). Hoffman et al. (1995) noted
three categories of service failure:
employee response to service delivery system failure (e.g. defective products, service
delays, facility problems and unavailability of products);
employee response to implicit/explicit customer request (e.g. seating problems and
not cooked to order); and
unsolicited and unprompted employee actions (e.g. wrong order and mischarged).
Scholars have noted that service failures can be caused by service providers, customers and
third parties (e.g. other customers) (Song, 2005). From the customers’ perspective, service
failure can cause an imbalance of injustice evaluation (Ok et al., 2007), such as dissatisfaction
(Choi and Choi, 2014; Weber and Sparks, 2010), switching intentions, and negative word of
mouth (Zhang et al., 2017; Namkung and Jang, 2010). From the service providers’
perspective, service failures can lead to decreased customer satisfaction and unwillingness
to repeat patronage (Kim and Jang, 2014), consequently leading to the collapse of the
organization (Ok et al., 2007).
Research has examined various service recovery strategies to cope with service failures.
Customers assess fairness of recoveries along the three fairness dimensions: procedural,
interactional, and distributive (Ok et al., 2005). Different aspects of the service recovery
process drive the three fairness dimensions (Choi and Choi, 2014). Distributive fairness
refers to the perceived outcome. Smith et al. (1999) suggested that the monetary
compensation (e.g. a free meal, a discount) has been found to be a service recovery strategy
that enhances customer perceptions of distributive fairness. Interactional fairness emphases
on interactions with customers during the service recoveries. Perceived helpfulness, apology
and service professionals’ empathy in dealing with the recovery have been found to restore
customer perceptions of interactional fairness (Mattila, 2001). Procedural fairness focuses on
the policies, procedures and rules by which recovery decisions are made (Smith et al., 1999)
to cope with service failures (Mattila, 2001). Quick service recoveries have been found to
enhance customer perceptions of procedural fairness (Namkung and Jang, 2010; Hwang and
Ok, 2013; Choi and Choi, 2014). Scholars have noted the value of an appropriate service
recovery strategy on recovery outcomes (Harris et al., 2006). Customers are often dissatisfied
not because of the service failure itself but the failure to handle the service failure (Silber
et al., 2009; Hart et al., 1990). Scholars have showed that compensation does not necessarily
lead to a higher rating of service recovery effort, repeat patronage intentions or customer
satisfaction if the service recovery processes is not well implemented (e.g. a delayed
response without apology) (Wirtz and Mattila, 2004). Thus, scholars have argued that the
way in which service recovery is implemented (procedure) is more vital to the customer than
material outcomes (Guchait et al., 2012). The current paper proposes a new procedure that
can be adopted by service providers to enhance the service recovery process: stealing
thunder.
Stealing thunder Impact on
Stealing thunder, also called self-disclosure, exposes the failures of the mistake maker before customer
external or internal stakeholders report the failure (Williams et al., 1993). Stealing thunder
offers positive outcomes for mistake makers, such as significantly increasing trust and
loyalty
minimizing the severity of the mistake (Claeys et al., 2013). The most common use of stealing
thunder in public communication is for crisis management. Wigley (2011) explained that
politicians and celebrities experience fewer negative judgments after using stealing thunder,
based on two studies of scandals of two politicians (Eliot Spitzer and David Paterson) and
two celebrities (Tiger Woods and David Letterman). The results of these studies indicated
that:
most articles focused on the person who was not the first one to expose the scandal
publicly (Eliot Spitzer and Tiger Woods);
there were significant differences in the headline frames; and
articles used more negative and intense words on Spitzer’s and Woods’ scandals
compared to Paterson’s and Letterman’s scandals.
Dolnik et al. (2003) argued that stealing thunder is the most appropriate approach for
defendants, and that after attorneys successfully used stealing thunder to persuade mock
jurors, the defendants were rated less guilty, perceived more credible and received lighter
sentences compared to when other forms of defense were used.
Arpan and Roskos-Ewoldsen (2005) designed a study of stealing thunder by creating
scenarios in which Pepsi products tend to make people ill and using two mock newspaper
articles. The difference between each scenario was the party who took the initiative to report
the incident, Pepsi Company, or the Centers for Disease Control and Prevention. The study
indicated that when organizations use stealing thunder as a recovery strategy, it results in
increased respondent perceptions of the organization’s trustworthiness and credibility,
increased purchase intentions and lowered perceptions of crisis severity. Wigley (2011)
studied stealing thunder using reality news and suggested that stealing thunder could be a
way of fast responsiveness, which leads to fewer negative comments.
Procedural fairness refers to the methods the organization uses to deal with the problems
arising during service delivery with regard to process control, timing/speed, accessibility,
delay and flexibility to adapt to the consumer’s recovery needs (Leticia Santos-Vijande et al.,
2013). Scholars have studied the relationship between determinants of procedural fairness
and service recovery outcomes (Smith et al., 1999). They have found a positive relationship
between procedural fairness and consumer satisfaction with complaint handling (Karatepe,
2006; Leticia Santos-Vijande et al., 2013). Choi and Choi (2014) showed that perceived
procedural fairness positively influences customer affection, which results in increased
positive word of mouth and customer loyalty. One of the main factors of customer
perceptions of procedural fairness is the speed by which service failures are corrected (Tax
et al., 1998). Wirtz and Mattila (2004) associated response speed with service recovery
satisfaction, repurchase intent and word of mouth.
Informational fairness refers to the truthfulness and adequacy of information explaining
the causes of a negative event (Colquitt et al., 2001). It focuses on the fairness of the
justifications and clarifications presented about decisions, and about the reasons behind
service failures (Ambrose et al., 2007). Offering information that is adequate, specific and
relevant to a decision enhances people’s perception of fairness (Folger and Cropanzano,
1998). Using this logic, Mattila and Cranage (2005) argued that customers are more likely to
perceive informational fairness following a service failure if they were offered an informed
IJCHM choice in a service setting. In a service failure context, informational fairness has been linked
with recovery satisfaction (Nikbin et al., 2013).
The current study argues that stealing thunder is effective in restoring customers’
perceptions of procedural fairness and informational fairness, which would have an impact
on customer loyalty. Customer loyalty involves positive word of mouth and repurchase
intentions (Tanford, 2013). Word of mouth (WOM) has been defined as “informal, person-to-
person communication between a perceived noncommercial communicator and a receiver
regarding a brand, a product, an organization, or a service” (Harrison-Walker, 2001, p. 63).
Word of mouth can be positive (encouraging brand choice) or negative (discouraging brand
choice) (East et al., 2008). Scholars have noted the importance of studying both positive and
negative word of mouth (Zhang et al., 2017). Chevalier and Mayzlin (2006) suggested that in
either case, word of mouth can have an impact on organizational performance and positive
or negative relationships with customers. East et al. (2008) compared the impact of positive
word of mouth and negative word of mouth on brand purchase probability, and found that
the impact of positive word of mouth is generally greater than the impact of negative word
of mouth. The current study used positive WOM as a component of customer loyalty.
Positive WOM has been extensively studied by researchers (Brown et al., 2005; Gremlar
et al., 2001; Jeong and Jang, 2011; Molinari et al., 2008). Customers are more likely to engage
in positive WOM when they are satisfied with the service recovery (De Matos and Rossi,
2008). Repurchase intentions involve customer behaviors that indicate a drive to continue a
relationship with a service provider (Choi and Choi, 2014). When customers experience
satisfactory service recovery, they are more likely to be loyal to a service provider (e.g.
through repatronage) (Söderlund, 2006).
Few studies in the service recovery literature have examined whether customers’
service recovery evaluations would differ if the customer identifies the service failure
first versus if the service provider identifies it first and takes the initiative to report the
failure to the customer before the customer has identified the failure – stealing thunder.
Most studies in the recovery literature have focused on recoveries following a
complaint from the customer. Yet, most unhappy customers do not complain or voice
their dissatisfaction (DeWitt et al., 2008). They simply do not return. Moreover, several
hospitality scholars have noted the importance of proactive behavior in the service
recovery process. Proactive behavior involves behavioral initiative aimed at improving
the current work circumstances in general or creating new ones (de Jong and de Ruyter,
2004). It involves challenging the status quo of the operational aspects of the service
delivery process (Morrison and Phelps, 1999). Employees who anticipate service
problems, or quickly detect problems as they occur, are more likely to convert
dissatisfied customers to a state of satisfaction (Hart et al., 1990). Schweikhart et al.
(1993) argued that when employees identify a minor defect of the service product before
the customer identifies the problem, and then take actions to solve the problem,
customers are likely to be more satisfied than if no failure occurred. Spontaneous
employee initiatives have been shown to lead to high levels of satisfaction and customer
delight (Wels-Lips et al., 1998). Scholars have also noted the value of preemptive
strategies to alleviate the effects of service failure on customers’ behavioral intentions,
lessening the need for subsequent recovery strategies such as apologies or
compensation (Cranage and Sujan, 2004). Preemptive strategy refers to a strategy used
before a potential failure to offset the negative effects of service failure (Cranage and
Mattila, 2005). Based on previous research, the current study argues that stealing
thunder is a proactive behavior or a preemptive strategy that can improve customer
perceptions of procedural fairness. In addition, as stealing thunder involves
transparent communication and truthfulness of information, it is likely to restore Impact on
customer perceptions of informational fairness. Thus, stealing thunder is likely to customer
increase customer perceptions of procedural and informational fairness, consequently
affecting customer loyalty. The following hypothesis is proposed:
loyalty
H1. Stealing thunder will positively affect customer loyalty. When stealing thunder is
present, customer loyalty will be higher than when stealing thunder is not present.
Previous research in organizational fairness has noted the interrelation among different
fairness dimensions (Wirtz and Mattila, 2004). The interaction effect between distributive
and procedural fairness is a strong conclusion in previous literature, since people tend to
create an overall sense of fairness using both information about the procedures and
outcomes (Cropanzano and Folger, 1991). In a services context, Sparks and McColl-Kennedy
(2001) found that the impact of compensation (determinant of distributive fairness) on
service recovery satisfaction depends upon the perceived adherence to organizational rules
(determinant of procedural fairness). In another study in the context of services, Wirtz and
Mattila (2004) found a three-way interaction effect of compensation, response speed
(a determinant of procedural fairness) and apology (a determinant of interactional fairness).
Overall, their findings suggested that compensation may not increase consumer satisfaction
with service recovery in circumstances where the recovery process was implemented well
(e.g. an apology along with an immediate recovery). Along similar lines, Tax et al. (1998)
found that poor interpersonal treatment reduced the positive effect of compensation.
Previous studies have identified that compensation is a critical strategy to implement when
service failure occurs (Fu et al., 2015). In fact, monetary compensation has been one of the
most common practices used to recover service failure (Davidow, 2003). However, studies
identified that giving compensation to customers does not always bring desirable outcomes
(Roschk and Gelbrich, 2014; Fu et al., 2015). Cranage and Mattila (2005) argued that by
joining preemptive strategy and service recovery strategies (e.g. compensation, apology),
customers are likely to appreciate and respect the service organization for their disclosure
and drive to satisfy customers. Based on previous studies, the impact of stealing thunder (as
a preemptive/proactive service recovery strategy) cannot be examined in isolation.
Thus, this study proposes the two-way interaction effect of stealing thunder and
compensation. Based on previous studies (Wirtz and Mattila, 2004), it is argued that when
stealing thunder is present (i.e. when service recovery processes are well-implemented by
using preemptive strategies), compensation will not impact customer loyalty. Along similar
lines, the study also proposes a three-way interaction effect of stealing thunder (procedural
and informational fairness), compensation (distributive fairness) and apology (interactional
fairness), on customer loyalty. Researchers have argued that when preemptive strategies are
used in service recovery processes, there may not be a need for traditional service recoveries
such as apology and compensation (Cranage and Sujan, 2004). Based on previous research, it
is argued that when stealing thunder is present, compensation will not impact loyalty when
apology is not present. However, when both stealing thunder and apology are not present,
compensation will impact loyalty. The following hypotheses are proposed:
H2. Stealing thunder and compensation will have a two-way interaction effect on
customer loyalty. (a) When stealing thunder is not present, compensation will result
in significantly higher customer loyalty. (b) However, when stealing thunder is
present, compensation will not result in significantly higher customer loyalty.
IJCHM H3. Stealing thunder, apology, and compensation will have a three-way interaction
effect on customer loyalty. (a) When stealing thunder is not present, compensation
will result in significantly higher customer loyalty when apology is not present. (b)
However, when stealing thunder is present, compensation will not result in
significantly higher customer loyalty when apology is not present.
The mediating effect of trust

Trust has been defined as “a willingness to rely on an exchange partner in whom one has
confidence” (Moorman et al., 1993, p. 315). Trust results from the exchange partner’s
reliability (Morgan and Hunt, 1994). Mayer et al. (1995, p. 712) defined trust as “the
willingness of a party to be vulnerable to the actions of another party based on the
expectation that the other party will perform a particular action important to the trustor
irrespective of the ability to monitor or control that other party.” As service failure may
break customer trust and make the customer feel betrayed (Basso and Pizzutti, 2016), trust is
an integral part of the relationship between customers and organizations (Han and Ryu,
2012). Trust following service recovery has been found to have a significant positive impact
on customer satisfaction, word of mouth, customer loyalty and revisit intention (Ok et al.,
2005; Kim et al., 2009; Seto-Pamies, 2012).
Scholars have studied trust as a mediator between perceived fairness and various
organizational outcomes. In a study involving employees, Aryee et al. (2002) found that
trust in an organization mediated the relationship between distributive, procedural and
interactional fairness and work attitudes of job satisfaction, turnover intentions and
organizational commitment. In a study of service customers, DeWitt et al. (2008)
discovered the mediating effect of trust between perceived fairness and customer
loyalty. Trust is strengthened when exchange partners interact in ways that
demonstrate their care for the needs and benefits of others (Holmes and Rempel, 1989).
Cognitive appraisal theory is adopted to justify the mediating effect of trust between
fairness perception and behavioral intentions (e.g. customer loyalty). Cognitive
appraisal is “a process through which a person evaluates whether a particular
encounter with the environment is relevant to his or her well-being” (Folkman et al.,
1986, p. 992). In a service failure and recovery context, when service providers
demonstrate trustworthiness through responsible recovery efforts, it leads to increased
favorable evaluation/appraisal of service providers (OK et al., 2005). Researchers have
suggested that a customer’s trust will mediate the relationship between service
recovery and overall customer satisfaction and behavioral intentions (DeWitt et al.,
2008; Ok et al., 2005). Thus, there is evidence in the literature that service recoveries
increase perceptions of fairness, fairness perceptions increase trust and trust increases
customer loyalty. Building on previous research, we propose that trust will mediate the
three-way interaction effect of stealing thunder (procedural and informational fairness),
apology (interactional fairness) and compensation (distributive fairness) on customer
loyalty (Figure 1). The following hypothesis is proposed:
H4. Trust will mediate the moderating effect of stealing thunder, apology and
compensation on customer loyalty.
Stealing Impact on
Apology
Thunder customer
loyalty
H2
H1
H3
Compensaon Loyalty
Trust
H4
Notes: H1: Main effect of Stealing Thunder on Loyalty; H2: Two-way

Figure 1.
interaction effect of Stealing Thunder and Compensation on Loyalty;

H3: Three-way interaction effect of Stealing Thunder, Compensation and Conceptual diagram
of the research
Apology on Loyalty; H4: Moderated-mediation effect
Methodology
Experimental design
To test these hypotheses, we conducted a 2 (stealing thunder: stealing thunder or no stealing
thunder) by 2 (apology: apology or no apology) by 2 (compensation: compensation or no
compensation), between-subjects factorial design study (Figure 1). Additionally, we used
gender as a covariate for our main study. Previous research identified that gender plays a
significant role in consumers’ reaction toward a service recovery process. Specifically,
multiple studies demonstrate that males and females react differently to service failures and
recovery processes (Mattila et al., 2009; McColl-Kennedy et al., 2003). According to Mattila
et al. (2009), giving compensation after a service failure to males was effective, while
compensation alone to females was not effective. Therefore, in this study, to avoid these
gender effects, we used gender as a covariate.
A pilot test was done to ensure that our manipulations were effective. Eight
scenarios were randomly given to 30 participants using convenience sampling. The
manipulation check and scale items were measured on a scale of 1 (strongly disagree) to
7 (strongly agree). Overall, the results indicated that our manipulations did work as
intended. Along with a pilot test, focus group interviews were conducted. The first
purpose of conducting the focus group interviews was to verify the realism of the
scenarios. The second purpose was to make sure that the scale items were relevant and
context-specific. Three focus-group interviews were conducted with subject-matter
experts (researchers), hospitality managers and customers. The interview with each
group lasted 30 to 45 min. Respondents confirmed that the scenarios were realistic.
Some minor modifications to the questionnaire were made based on verbal comments
by the respondents.
Sample
A scenario-based survey was conducted through Amazon Mechanical Turk (Mturk) over
two weeks, from which we collected a random sample of three hundred subjects living in the
USA. Usable responses from a total of 244 participants were used to analyze the results.
Approximately half (53.7 per cent) of the subjects were male. The age range of the majority
of the subjects was 25 to 34 years old (33.6 per cent). Majority of the subjects (62.3 per cent)
IJCHM Demographic Frequency (%)
Gender
Male 131 (53.7)
Female 113 (46.3)
Age
18-24 57 (23.4)
25-34 82 (33.6)
35-44 52 (21.3)
45-54 32 (13.1)
55-64 15 (6.1)
65-74 6 (2.5)
Degree
Less than high school 21 (8.6)
High school graduate 59 (24.2)
Bachelor degree 107 (43.9)

Master degree 53 (21.7)
Doctorate degree 4 (1.6)
Ethnic
White 152 (62.3)
Black or African American 36 (14.8)
American Indian or Alaska Native 2 (0.8)
Asian 28 (11.5)
Native Hawaiian or Pacific Islander 1 (0.4)
Hispanic 22 (9.0)
Other 3 (1.2)
Employment status
Employed full time 118 (48.4)
Employed part time 77 (31.6)
Unemployed looking for work 15 (6.1)
Unemployed not looking for work 2 (0.8)
Retired 5 (2.0)
Student 16 (6.6)
Disabled 11 (4.5)
Income
Less than $19,999 77 (31.6)
$20,000 - $39,999 84 (34.4)
$40,000 - $59,999 40 (16.4)
$60,000 - $79,999 25 (10.2)
$80,000 or More 18 (7.4)
Frequency of eating out
Daily 13 (5.3)
4-6 times a week 66 (27.0)
2-3 times a week 90 (36.9)
Table I. Once a week 70 (28.7)
Demographics Never 5 (2.0)
were White. A significant percentage of the subjects (36.9 per cent) eat out about two to three
times a week, while 27 per cent of the subjects eat out four to six times a week. Table I shows
the exact demographic data.
Procedure Impact on
Respondents were randomly allocated to one of the eight scenario conditions (see Appendix). customer
On average, each condition had 30 respondents. Each participant was asked to imagine a
particular scenario and answer questions on trust and loyalty, followed by realism check
loyalty
questions, manipulation check questions and demographic questions. The completion of the
survey was anonymous and voluntary.
Measures
Realism was measured with two items from Dabholkar and Spaid (2012, p. 1431):
(1) “It was easy imagining myself in the scenario situation”; and
(2) “The scenario situation was realistic.”
The items were measured on a seven-point, Likert-type scale ranging from 1 (strongly
disagree) to 7 (strongly agree).

Manipulation checks for the eight experimental conditions were developed as
dichotomous items. These items forced respondents to select one of the two choices (Yes/No)
to describe each of the eight treatments (Dabholkar and Spaid, 2012). Previous research
studies have used single-item manipulation check items (Cranage and Mattila, 2005). Thus,
three manipulation check items were used:
(1) “The server took the initiative to inform about their mistake” (Stealing Thunder)
(Yes/No);
(2) “The server apologized for the mistake” (Apology) (Yes/No); and
(3) “The server gave me compensation for the mistake” (Compensation) (Yes/No).
In this study, customers’ level of trust and loyalty were measured on a 7-point Likert scale
ranging from 1 (strongly disagree) to 7 (strongly agree). Measurement items were either
used directly or adapted to measure the constructs. This approach has been used in previous
research (Choi and Choi, 2014; Kim et al., 2009). See Scales items for variables for the details
of the measurements:
(1) Trust:
This restaurant is sufficiently qualified to meet my requirements efficiently.
This restaurant seems to have an adequate knowledge about the services
consumers need to be satisfied.
Overall, this restaurant is reliable.
(2) Loyalty:
I will say positive things about the restaurant to other people.
I will recommend to friends and relatives that they use the services of this
restaurant.
I will recommend this restaurant if someone ask me for information.
I intend to switch to a competitor of this restaurant.
I will not acquire services of this restaurant anymore in the future.
I would not visit this restaurant again.
Customers’ trust (toward the restaurant) scale was measured with three items based on the
scenario, which was adapted from Vázquez-Casielles et al. (2010) and Kim et al. (2009).
IJCHM Reliability was found to be 0.91. Customer’s loyalty (toward the restaurant) scale was
measured with six items based on the scenario, which was adapted from Tanford (2013) and
Choi and Choi (2014). Reliability was found to be 0.95.
Although items were adapted from validated scales, additional validation was conducted
before finalizing the scale items. Content validity was established through focus-group
interviews (Vogt et al., 2004). Focus-group interviews were conducted with subject-matter
experts, hospitality managers and customers who confirmed the scale items matched the
definition of the constructs and were relevant to the context of the current study. Moreover,
construct validity was established adopting the nested-model suggested by Anderson and
Gerbing (1988).
Results
Realism checks
Realism was measured with two items. Participants were asked about whether they could
imagine themselves in such a situation. The mean was 6.09 (on a seven-point scale). The
second item asked about the realism of the scenario. The mean was 6.03 (on a seven-point
scale). This provides strong evidence that the respondents considered the scenarios realistic.
Manipulation checks
To verify whether three experimental conditions were perceived as intended, we conducted
Chi-square tests. Similar to the pretest results, the result of the manipulation check questions
indicate that participants did perceive the three conditions as we anticipated. When stealing
thunder was not present, 95.0 per cent correctly responded to the manipulation check
question, and when there stealing thunder was present, 96.0 per cent responded correctly
( x 2 = 205.68, p < 0.01). For the apology condition, when apology was not present, 98.2 per
cent of participants answered correctly, and when apology was not present 97.0 per cent
responded correctly ( x 2 = 220.43, p < 0.01). Finally, for compensation treatment, 97.5 per
cent of participants answered correctly for the no-compensation condition and 95.9 per cent
answered correctly for the compensation condition ( x 2 = 213.11, p < 0.01). Therefore, all
three experimental manipulations in the scenario worked as intended.
Effects of experimental treatments

To test H1, H2 and H3, we subjected customer loyalty to a 2 (stealing thunder: stealing
thunder or no stealing thunder) by 2 (apology: apology or no apology) by 2 (compensation:
compensation or no compensation), between-subject ANCOVA while controlling for gender
as a covariate.
First, as we predicted, the ANCOVA result revealed a significant main effect of stealing
thunder on customer loyalty (F(1,243) = 29.44, p < 0.01, H1 supported). When stealing
thunder was present, customer loyalty was significantly higher than when stealing thunder
was not present (Mst-thu = 5.13 vs. Mnost-thu = 4.40). Second, the interaction between
stealing thunder and compensation (F(1,243) = 40.80, p < 0.01, H2) was significant. As we
predicted in H2, when stealing thunder is not present, customer loyalty is higher when
compensation is given to customers compared to when compensation is not given (Mnost-
comp = 5.34 vs Mnost-nocomp = 3.50, p < 0.01, H2a supported). However, when stealing
thunder is present, compensation did not influence customer loyalty (Mst-comp = 5.26 vs
Mst-nocom p = 5.00, p = 0.21, H2b supported).
Most importantly, the result demonstrated a significant three-way interaction effect on
customer loyalty (F(1,243) = 21.48, p < 0.01, H3) (Table II). The post hoc test indicates that
when stealing thunder and apology are not present, compensation will significantly
Source SS df MS F
Impact on
customer
Corrected model 250.81 8.00 31.35 31.41* loyalty
Intercept 518.63 1.00 518.63 519.59*
Gender 1.34 1.00 1.34 1.34
Stealing thunder 29.38 1.00 29.38 29.44*
Apology 83.32 1.00 83.32 83.48*
Compensation 73.71 1.00 73.71 73.85*
Stealing thunder apology 2.05 1.00 2.05 2.05
Stealing thunder Compensation 40.71 1.00 40.71 40.79*
Apology Compensation 4.28 1.00 4.28 4.29*
Stealing thunder Apology Compensation 21.44 1.00 21.44 21.48*
Error 234.57 235.00 1.00
Total 6047.78 244.00
Corrected total 485.38 243.00 Table II.
ANCOVA Results on
Note: *p < 0.05 loyalty
influence customer loyalty. Specifically, when service providers do not proactively use
stealing thunder and do not offer an apology, compensation will increase customers’ loyalty
(Mnost-noapo-comp = 5.11 vs Mnost-noapo-nocomp = 4.61; p = < 0.01; H3a supported)
(Table III). However, when stealing thunder is present without an apology, giving customers
compensation will not influence customer loyalty. When an employee reports his or her
mistake first without an apology, giving the customer compensation will not lead to higher
loyalty (Mst-noapo-comp = 4.54 vs Mst-noapo-nocomp = 4.61; p = 0.82; H3b supported)
(Figure 2). The results indicate that when service providers use preemptive/proactive
strategies like stealing thunder, there may not be a need to offer conventional service
recoveries such as apology or compensation.
Moderated mediation test

To test hypothesis H4, we used PROCESS bootstrapping method (Hayes, 2013) to
conduct a moderated mediation effect on customers’ loyalty behavior. We used model
11 to test the mediation effect of trust between the interaction effect of stealing thunder,
apology and compensation, and the dependent variable, loyalty. The interaction of
stealing thunder, apology and compensation significantly predicted trust (B = 2.12,
SE = 0.54, [CI95]: [1.15, 3.29]), and trust predicted customer loyalty (B = 0.86, SE = 0.03,
[CI95]: [0.80, 0.91]). The bootstrapping analysis demonstrates that the three-way
Scenario Stealing thunder Apology Compensation Loyalty Trust

Mean (SD) Mean (SD)
1 Yes Yes Yes 5.89 (0.84) 6.03 (0.55)

2 Yes Yes No 5.24 (0.77) 5.29 (0.90)
3 Yes No Yes 4.54 (1.63) 4.33 (1.35)
4 Yes No No 4.61 (1.37) 4.58 (1.75)
5 No Yes Yes 5.57 (0.59) 5.86 (0.70)
6 No Yes No 4.53 (0.86) 4.24 (0.79)
7 No No Yes 5.11 (0.67) 5.04 (0.79) Table III.
8 No No No 2.27 (0.99) 2.19 (0.90) Descriptive statistics
IJCHM With No Apology
6
Loyalty
3
1
Figure 2. No Yes
Moderated-mediated Compensaon
effect on loyalty
No Stealing Thunder Yes Stealing Thunder
interaction effect on customer loyalty is mediated by trust (index = 1.90, [CI95]: [0.88,
2.72]; H4 supported).
Discussion and conclusions

Conclusions
First, this study introduced the concept of stealing thunder to the hospitality industry,
especially in the restaurant industry. This study presented stealing thunder as a new service
recovery strategy. Second, this study examined the effect of stealing thunder (a determinant
of procedural and informational fairness) on customer loyalty. The most crucial finding of
this study is that stealing thunder can increase customer loyalty. Third, this study examined
the two-way interaction effect of stealing thunder and compensation (determinant of
distributive fairness). Fourth, this study examined the interaction effect of stealing thunder
along with compensation and apology (determinant of interactional fairness) on customer
loyalty. Finally, this study provided evidence that trust plays an important role in the
service recovery process. Trust was found to be a mediator between service recovery
strategies (e.g. stealing thunder, apology and compensation) and customer loyalty.
Theoretical implications
First, while previous research noted the positive impact of stealing thunder in the areas of
law and public communications, this paper demonstrated the positive impact of stealing
thunder in the hospitality industry. Therefore, this study opens a new line of research in the
hospitality industry. Moreover, by linking the concept of stealing thunder in a new
discipline and context, this study increases the validity and generalizability of the concept.
Second, the findings have strong implications for hospitality research, as a new predictor
(i.e. stealing thunder) is identified that can affect customer loyalty. This finding is in line
with the results of previous research. Arpan and Pompper (2003) argued that stealing
thunder could increase credibility, which could lead to the ease of tension. Third, results
indicated that when stealing thunder is used as a proactive/preemptive strategy in the
service recovery process, compensation does not increase customer loyalty. However, when
stealing thunder is not present in the service recovery process, compensation can increase
customer loyalty. The finding is in line with previous research (Wirtz and Mattila, 2004),
which suggests that when recovery efforts are well executed/implemented, compensation
does not impact customer loyalty.
Fourth, the significant three-way interaction on customer loyalty implies that stealing Impact on
thunder, apology and compensation jointly influence customer loyalty. Specifically, the customer
study found that when stealing thunder is used proactively in the service recovery process,
compensation does not impact customer loyalty in the absence of an apology. However,
loyalty
when both stealing thunder and apology are absent during service recoveries, it is crucial for
service providers to offer compensation to increase customer loyalty. In other words,
stealing thunder can be an effective preemptive/proactive service recovery strategy when
service providers are unable to provide monetary compensation. For example, when
monetary compensation is too costly for service providers to offer or when customers are
suffering psychological loss (Roschk and Gelbrich, 2014), stealing thunder can be used as a
service recovery approach. Therefore, service providers may choose not to offer apology and
compensation when they use stealing thunder proactively in the service recovery process.
This finding is in line with previous research on preemptive service recovery strategies
(Cranage and Sujan, 2004). With the result of this study, we can predict that restaurants
using stealing thunder will gain more customer loyalty.

Finally, this study includes trust in the nomological network that explains the
underlying mechanism linking service recovery strategies and customer loyalty. When
service failure occurs, customers lose trust toward the service provider (Basso and Pizzutti,
2016). Service providers can regain customer’s trust by using appropriate service recovery
strategies (Ok et al., 2005).
Practical implications
The findings also have strong implications for practitioners. First, when service failure
occurs, the restaurant can use stealing thunder as the first response (proactive/preemptive
strategy) to show its competency, credibility and high service standard toward
the customer. The server could be the first one to report the failure to the customer to ease
the negative effect of the service failure. Managers can incorporate stealing thunder as a
strategy in employee training for service delivery and recovery. Second, when service
providers use stealing thunder as a proactive/preemptive strategy, they may choose not to
offer compensation. However, when service providers choose not to use stealing thunder or
forget to use this strategy proactively, compensation should be provided to influence
customer loyalty. Third, it is highly recommended for restaurants to use a combination of a
proactive/preemptive strategy like stealing thunder and traditional service recoveries like
apology and compensation to soothe the customer and increase customer loyalty. Based on
the research on respect for openness and disclosure (Pennebaker, 1995), using stealing
thunder sends a message to the customers that the service provider is being transparent,
and the consumer feels respected for the disclosure, leading to loyalty. In addition, when
service providers chose to offer apology and compensation post-recovery, it can enhance
customer loyalty. Finally, this study demonstrated that service providers can use stealing
thunder as a proactive/preemptive service recovery strategy to regain customer’s trust
following a service failure.
Limitations and future research

There current study has some limitations. First, this study did not consider how
controllability, failure type, and severity of service failures can impact the proposed
relationships. Researchers have noted that failure types and failure severity can impact
outcomes of recovery efforts (Israeli et al., 2017). Future studies need to examine how such
factors can influence the relationships examined in this study. Seconsd, the scenarios
adopted in the current study were set in the casual-dining restaurant, which means the
IJCHM result may apply only to casual-dining restaurants. Future studies could expand the
scenario to different contexts, such as fine-dining restaurant, fast-food restaurant, hotels and
banks. Third, this study used positive WOM as one of the dimensions of the outcome
variable: customer loyalty. Positive WOM has been studied as an outcome of recovery
efforts in prior research (Brown et al., 2005). However, researchers have noted the value of
studying both positive and negative word of mouth (Zhang et al., 2017). Therefore, it is
recommended that future research studying stealing thunder examine its impact on
negative word-mouth as well. Fourth, this study did not consider the influence of others
(e.g. other people in the dining party, other customers etc.) at the service encounter.
Scholars have noted that the presence of others at the service encounter has the
potential to affect positively or negatively a customer’s evaluation of the service (Grove
and Fisk, 1997). Therefore, future studies focusing on stealing thunder should examine
the effect of others on customer evaluations of service recovery efforts. Finally, the
current study used just one indicator of procedural justice (stealing thunder),
interactional justice (apology) and distributive justice (compensation), which may have
oversimplified the research design. Therefore, future research should consider using
multiple indicators for each justice dimension (e.g. stealing thunder and speed of
recovery as indicators of procedural justice).
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Appendix. Written scenario

It was Saturday, you and your friend have decided to go out for dinner at a casual dining restaurant.
When you walked in, the hostess greeted you, took the menus and seated you. The server then came and
introduced himself and asked what you would like to drink. After the server served your drinks, he took
your orders. You ordered a Filet Mignon steak, and your friend ordered a Sautéed Shrimp with Lemon.
Scenario 1: Stealing thunder – Apology – Compensation

After a while, the server came and said: “Our chef made a mistake about your order. We
made the shrimp for you instead of the steak.”
Later, the server served you the steak with an apology: “I do apologize for the mistake.”
After finishing the meal, the server came with the dessert and said: “We would like to
offer you a free dessert because of our mistake.”
After paying for your meal, you and your friend left the restaurant.
Scenario 2: Stealing thunder – Apology – No compensation
After finishing the meal, the server came with your check.
Scenario 3: Stealing thunder – No apology – Compensation
Later, the server served you the steak without an apology.
Scenario 4: Stealing thunder – No apology – No compensation
Scenario 5: No stealing thunder – Apology – Compensation
After a while, your meal was served, however, you found out that your meal was shrimp
instead of the steak. You complained to the server: “I ordered the steak, but this is a
shrimp, it’s not what I ordered.”
IJCHM Later, the server served you the steak with an apology: “I do apologize for the mistake.”
Scenario 6: No stealing thunder – Apology – No compensation
Scenario 7: No stealing thunder – No apology – Compensation
Scenario 8: No stealing thunder – No apology – No compensation
Corresponding author
Xingyu Wang can be contacted at: wxy.maxime@gmail.com
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International Journal of Contemporary Hospitality Management

Examining stealing thunder as a new service recovery strategy: impact on

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impact on customer loyalty

Research gaps and contributions

interconnected (Wirtz and Mattila, 2004). Scholars have identiﬁed compensation as a

Literature review and hypothesis development

The mediating eﬀect of trust

Notes: H1: Main effect of Stealing Thunder on Loyalty; H2: Two-way

interaction effect of Stealing Thunder and Compensation on Loyalty;

Bachelor degree 107 (43.9)

disagree) to 7 (strongly agree).

Eﬀects of experimental treatments

Note: *p < 0.05 loyalty

Moderated mediation test

Scenario Stealing thunder Apology Compensation Loyalty Trust

1 Yes Yes Yes 5.89 (0.84) 6.03 (0.55)

Discussion and conclusions

using stealing thunder will gain more customer loyalty.

Limitations and future research

Appendix. Written scenario

Scenario 1: Stealing thunder – Apology – Compensation

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