Socially responsible cocreation in service recovery: the role of pride in prosocial compensation

Purpose This study explores the incorporation of prosocial compensation in service recoveries by allowing customers to cocreate the process through compensation choice, explains the underlying mechanism driving these results and identifies a boundary condition for these effects. Design/methodology/approach Three scenario-based experimental studies are conducted to test the proposed hypotheses. Findings Incorporating cocreation in a service recovery featuring prosocial compensation can outperform purely financial compensation (i.e. monetary-only) if the customer is given a choice. Moreover, pride is higher for customers who choose prosocial compensation (i.e. donations) as part of a service recovery. These findings are contingent on the firm’s reputation, namely, its corporate social responsibility (CSR) authenticity, such that companies with high (vs low) CSR authenticity perceptions benefit more in terms of enhanced pride given cocreated prosocial recoveries. Research limitations/implications Drawing on service-dominant logic and social exchange theory, the findings of this research suggest that incorporating prosocial compensation, an element of CSR, as part of a cocreated service recovery strategy can enhance pride and repurchase intent. Practical implications This research demonstrates instances where prosocial compensation can outperform monetary-only compensation, leading to higher repurchase intent, highlighting conditions for this to occur and offering prescriptions for managers to implement these strategies in service recoveries. Social implications Cocreating service recoveries with prosocial compensation, like donations, boosts customer pride and strengthens relationships. Firms with authentic CSR perceptions benefit most, addressing customers’ emotional and economic needs while enhancing community goodwill. Originality/value This work uniquely explores the effect of cocreated recoveries using prosocial compensation on pride and repurchase intent.