The effects of harm directions and service recovery strategies on customer forgiveness and negative word-of-mouth intentions

• We examine consumer forgiveness in direct and indirect service failure contexts.
• Directly affected consumers have lower intentions to forgive.
• Compensation and hybrid recovery strategies positively affect forgiveness.

This study aims to investigate the direction of harm and the role of service recovery strategies on customer positive (i.e., forgiveness) and negative (i.e., word-of-mouth) intentions. We found that customer intentions are stronger among those who are directly affected by the service failure than indirectly affected customers. Further, we assess the role of service recovery in customer intentions after the service failure. The study findings contribute to the development of theory on the “other customers” effect by comparing the consequences of service failure directed at the focal customer and other customers and provide solutions to practitioners to reduce this damaging effect.