Diagnosing the impact of retail bank customers’ perceived justice on their service recovery satisfaction and post-purchase behaviours: an empirical study in financial centre of middle east

Halil Nadiri

doi:10.1080/1331677x.2016.1164925

Abstract

The banking sector ranks among the top three sectors in terms of frequency of complaints. The purpose of this study is to assess the effects of perceived justice on recovery satisfaction and to examine the relationships between recovery satisfaction and customer relationship variables in the banking sector where there are lack of empirical studies. Empirical observations were made through questionnaires conducted with 178 retail bank customers in Dubai. The data are analysed through partial least squares (PLS) approach to path modelling to estimate the measurement and structural parameters. The results revealed that distributive justice (DJ), procedural justice (PJ) and interactional justice (IJ) had significant positive effects on service recovery satisfaction, while IJ has the strongest effect with respect to others. Also, service recovery satisfaction had a significant positive effect on trust. The structural model results also revealed that customers’ perceptions of trust had a significant positive effect on their WOM communication and repurchase intentions. The results of the study show that the service recovery satisfaction is a vital mediating variable between perceived justice of customers and customer relationship variables. Furthermore, the mediational role of trust between service recovery satisfaction and future intentions is extensive.

Highlights

In today’s highly competitive global environment service firms’ success depends on their capacity to consistently deliver satisfying consumption experiences (Karatepe, 2012; Patterson, Cowley, & Prasongsukarn, 2006)
The results revealed that distributive justice (DJ), procedural justice (PJ) and interactional justice (IJ) had significant positive effects on service recovery satisfaction, while IJ has the strongest effect with respect to others
This study aims to assess the effects of perceived justice on recovery satisfaction and to examine the relationships between recovery satisfaction and customer relationship variables in the banking sector

Summary

Introduction

In today’s highly competitive global environment service firms’ success depends on their capacity to consistently deliver satisfying consumption experiences (Karatepe, 2012; Patterson, Cowley, & Prasongsukarn, 2006). Achieving consistent and error-free services should be a goal in service businesses. Nadiri their best to meet customers’ expectations, they often fail to satisfy their customers, who tend to be more demanding and less loyal than ever before (Kim, Kim, & Kim, 2009). Intense competition makes customers more demanding and unlikely to forgive, so service recovery is more crucial than ever before (Nadiri, 2011). A service failure is defined as ‘any service-related mishaps or problems that occur during a consumer’s experience with the firm’ From a managerial point of view, achieving fair handling of customer complaints is a matter of profitable management (Chebat & Slusarczyk, 2005)

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