Abstract
This current study purposes to identify the relationships between service recovery strategies, service recovery satisfaction, and both dimensions of customer loyalty in regard to Internet providers using the partial least squares (PLS-SEM) approach on a sample of 430 internet customers in Egypt.This study contributes insights into how seven service recovery strategies affected customer loyalty with its both attitudinal and behavioral dimensions directly and indirectly via service recovery satisfaction. These insights are helpful for service managers faced with service failure and academicians interested in how service providers respond to service failures and customer dissatisfaction in the B2C context.The results of this study show that some SR strategies positively influence both service recovery satisfaction and customer loyalty toward internet providers. Furthermore, service recovery satisfaction positively influencing the customer loyalty. In addition, SRS plays a mediating role in the relationship between SR strategies and customer loyalty. The results highlight that internet service providers should implement SR strategies quickly and with an empathetic manner to satisfy customers and to encourage customer's loyalty. Finally, some implications and further research directions were presented.
Highlights
Service marketing literature confirms that the firm's profitability is mostly determined by the loyalty of their customers (Komunda & Osarenkhoe, 2012), where Reichheld and Sasser (1990) illustrate that the improvement in customer retention by 5% can lead to an increase in profits ranging from 25% to 85%
Service recovery has considered a strategic element for service firms in the competitive marketplace (Yaya, Marimon, & Casadesus, 2013), and it has been identified as a key issue in the literature of both service marketing and service quality (Ashill, Carruthers, & Krisjanous, 2005; Michel, Bowen, and Johnston, 2009; Cheung & To, 2016), especially that the service failure is not completely avoidable due to the intangible nature of service (Jung & Seock, 2017)
This paper builds on the Service Recovery (SR) strategies proposed by Liao (2007) and we have considered two more strategies from other studies because they seem appropriate to the nature of this study based on the related literature in the eastern communities and our pilot study
Summary
Service marketing literature confirms that the firm's profitability is mostly determined by the loyalty of their customers (Komunda & Osarenkhoe, 2012), where Reichheld and Sasser (1990) illustrate that the improvement in customer retention by 5% can lead to an increase in profits ranging from 25% to 85%. The leading companies in business today have become aware of the importance of customer loyalty as it considered one of the best intangible assets for any service firm and it represents a necessity to remain in the competitive market (Cossío-Silva, Revilla-Camacho, Vega-Vázquez, & Palacios-Florencio, 2016; Yang & Chao, 2017 ) As well as, it is considered a strategic element for a long-term viability in the B2C context (Chen & Wang, 2016; Hsiao & Chen, 2016) and it plays an essential role in achieving more profits and firms' success (Kim, 2007) especially in the e-commerce context (Hsiao and Tang, 2016).
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