Handle with care! Service contract termination as a service delivery task

Purpose Profitability considerations lead service providers to terminate contracts with low-value customers. However, customers targeted by contract terminations often take revenge through negative word-of-mouth (NWOM). Presently, it is unclear how termination initiatives prevent this harmful side effect. The purpose of study compare the effectiveness common for reducing NWOM whose are being cancelled. results provide guidance minimizing downside termination. Design/methodology/approach This distinguishes between in practice (preannouncement, explanation, financial compensation, apology and support finding an alternative provider). Drawing on a multi-industry survey 245 who have experienced real life, authors estimate regression models link perceived NWOM. Findings All else equal, only preannouncement effective reduce also shows that right choice depends context Making preannouncement, offering explanation providing more when these actions aligned contextual factors relationship duration competitive intensity. Research limitations/implications needs address several aspects experience. key implication future research matters terms performed. Practical implications identifies most after general under consideration moderating roles Originality/value While related studies considered customer responses cancellation other customers’ contracts, contributes scarce literature undesirable (such as NWOM) their own contract. To best authors’ knowledge, first emerging stream accounts effects process- outcome-oriented account moderators effect NWOM, namely,