The Influence of Service Recovery Strategies on Resilience to Switching Intentions Among Customers of Commercial Banks in Tanzania: The Mediating Effect of Customer Loyalty

Abstract

This study’s primary objective is to investigate how customer loyalty can mediate the relationship between service recovery strategies and customer switching intentions. The logic behind it is that, in today’s uncertain business environments, measuring organizational success by emphasizing customer satisfaction alone is insufficient for creating customer resilience to switching intentions. This is because satisfied customers can switch to other brands, while dissatisfied customers can repurchase. This calls for other studies to look into other factors that can be considered for successfully managing customers. Given that service failure is inevitable, it is important to look at how service recovery strategies can be used to influence resilience to switching intentions through developing customer loyalty. The study adopted a cross-sectional design in which 502 customers from commercial banks were involved, and structural equation modelling (SEM) was used to analyse the data. The SEM results show that all dimensions of service recovery, including procedural justice, distributive justice and interactional justice, are significant determinants of customer loyalty. As well, customer loyalty was a significant predictor of switching intentions. Furthermore, customer loyalty is a significant mediator of the relationship between service recovery strategy and the resilience to switching intention among customers. Finally, this study has managerial and theoretical implications for the body of literature.