Open AccessLooking Backward To Costs And Forward To Rewards: The Influence Of Service Recovery And Relationship Structure On Customer Responses To Service Failure
Author(s) -
Manfred F. Maute
Publication year - 2011
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v1i7.3936
Subject(s) - service recovery , customer retention , business , service (business) , marketing , customer advocacy , loyalty business model , customer delight , customer satisfaction , customer relationship management , loyalty , customer to customer , service quality
Service failure research has failed to consider the potential for rewards to influence customer retention while overlooking the role that relationship structure plays in shaping customer responses to service failure. Using the investment model of ongoing relationships as a conceptual framework, this study investigates the effects of recovery strategies that manipulate past service failure costs and customer loyalty strategies that manipulate future relationship rewards on customer responses to a core service failure. Service recovery strategy and customer loyalty strategy were observed to increase relationship satisfaction and decrease customer defection. Beyond influencing service failure responses directly, relationship structure variables such as current relationship rewards, costs, and investments, and alternative relationship value mediated service recovery effects on customer defection.