Service Recovery Strategies in Service Industry Affecting Consumer Forgiveness and Repurchase Intentions: Moderating Role of Online Brand Community Engagement
Keywords:Service recovery strategies, repurchase intentions, consumer forgiveness, apology, compensation, online brand community engagement
Purpose: This study investigated the impact of service recovery strategies;
namely apology (AP) and compensation (CP) on consumer forgiveness (CF)
as well as repurchase intention (RI). Online brand community engagement
(OBCE) was investigated as a moderator on the relationship between
recovery strategies and RI. Consumer forgiveness served as a mediator on the
relationship between service recovery strategies and RI.
Design and Methodology: A cross sectional study was designed. Data was
collected from faculty members and students of universities located in
Rawalpindi and Islamabad. The sample was selected by convenience
sampling; a questionnaire was sent to 1210 respondents. About 606
responses were received out of which the 426 usable responses were included
in the analysis. Data was analyzed by using AMOS and PROCESS.
Findings: The results have shown that the effect of apology on purchase
intention proved to be insignificant whereas the effect of compensation on
purchase intention was significant. The mediation role of consumer’s
forgiveness was also significant. The OBCE significantly moderated the
effect of CF on RI whereas its effect is insignificant for the direct
relationships of AP and CP with RI.
Implications: The findings provided useful insight for policymakers in
service sector organizations for planning. The purpose was to investigate how
service recovery strategies can influence the repurchase intention of
consumers in a service industry.
Ali, I., Gilal, R. G., & Shah, N. (2018). Impact of service recovery on repurchase intentions among customers of cellular industry of Pakistan. Journal of Grassroots, 51(2), 76-92.
Babin, B. J., Zhuang, W., & Borges, A. (2021). Managing service recovery experience: effects of the forgiveness for older consumers. Journal of Retailing and Consumer Services, 58, 102222.
Bakar, R. M., Hidayati, N., & Giffani, I. R. (2019). Apology and compensation strategy on customer forgiveness and negative word of mouth. Jurnal Manajemen dan Kewirausahaan, 21(1), 41-50.
Berry, J. W., & Worthington Jr, E. L. (2001). Forgivingness, relationship quality, stress while imagining relationship events, and physical and mental health. Journal of counseling psychology, 48(4), 447.
Cengiz, E., Er, B., & Kurtaran, A. (2007). The effects of failure recovery strategies on customer behaviours via complainants' perceptions of justice dimensions in banks. Banks & bank systems, (2, Iss. 3), 173-198.
Cropanzano, R., & Dasborough, M. T. (2015). Dynamic models of well-being: Implications of affective events theory for expanding current views on personality and climate. European Journal of Work and Organizational Psychology, 24(6), 844-847.
Forza, C. (2002). Survey research in operations management: a process‐based perspective. International Journal of Operations & Production Management, 22(2), 152-194.
Gorlier, T., & Michel, G. (2020). How special rewards in loyalty programs enrich consumer–brand relationships: The role of self‐expansion. Psychology & Marketing, 37(4), 588-603.
Harrison-Walker, L. J. (2019). The critical role of customer forgiveness in successful service recovery. Journal of Business Research, 95, 376-391.
Honora, A., Chih, W. H., & Wang, K. Y. (2022). Managing social media recovery: The important role of service recovery transparency in retaining customers. Journal of Retailing and Consumer Services, 64, 102814.
Hair, J. F., Gabriel, M., & Patel, V. (2014). AMOS covariance-based structural equation modeling (CB-SEM): Guidelines on its application as a marketing research tool. Brazilian Journal of Marketing, 13(2).
Jung, N. Y., & Seock, Y. K. (2017). Effect of service recovery on customers’ perceived justice, satisfaction, and word-of-mouth intentions on online shopping websites. Journal of Retailing and Consumer Services, 37, 23-30.
Jeong, M., & Lee, S. A. (2017). Do customers care about types of hotel service recovery efforts? An example of consumer-generated review sites. Journal of Hospitality and Tourism Technology, 8(1), 5-18.
Lafci, S., Göksu, K. K., & Avar, F. (2020). Customer Complaints Encountered in the Food Sector During the COVID-19 Period. In Annual Gsom emerging Markets Conference, 272-277.
Lee, S. Y., & Atkinson, L. (2019). Never easy to say “sorry”: Exploring the interplay of crisis involvement, brand image, and message appeal in developing effective corporate apologies. Public Relations Review, 45.
Li, X., Ma, B., & Bai, R. (2020). Do you respond sincerely? How sellers’ responses to online reviews affect customer relationship and repurchase intention. Frontiers of Business Research in China, 14(1), 1-13.
Li, Y., Yang, K., Chen, J., Gupta, S. and Ning, F. (2019), "Can an apology change after-crisis user attitude? The role of social media in online crisis management", Information Technology & People, 32(4), 802-827.
Liu, H., Jayawardhena, C., Dibb, S., & Ranaweera, C. (2019). Examining the trade-off between compensation and promptness in eWOM-triggered service recovery: A restorative justice perspective. Tourism Management, 75, 381-392.
Ma, K., Zhong, X., & Hou, G. (2020). Gaining satisfaction: the role of brand equity orientation and failure type in service recovery. European Journal of Marketing. 54(10), 2317-2342.
McAlexander, J. H., Schouten, J. W., & Koenig, H. F. (2002). Building brand community. Journal of Marketing, 66(1), 38-54.
Muhammad, L. (2019). Do service firm employee and customer relations matter for customer forgiveness in service recovery?. Asia Pacific Journal of Marketing and Logistics, 31(4), 1216-1232.
Ozuem, W., Ranfagni, S., Willis, M., Rovai, S., & Howell, K. (2021). Exploring customers' responses to online service failure and recovery strategies during Covid‐19 pandemic: An actor–network theory perspective. Psychology & Marketing, 38(9), 1440-1459.
Siu, N. Y.-M., Zhang, T. J.-F., & Yau, C.-Y. J. (2013). The Roles of Justice and Customer Satisfaction in Customer Retention: A Lesson from Service Recovery. Journal of Business Ethics, 114(4), 675–686.
Sciarelli, M., Nagm, A. A., Dakrory, M. I., Tani, M., & Khashan, M. A. (2017). The relationship between service recovery and patronage intentions: the mediating role of relationship quality. International Business Research, 10(8), 215-231.
Suhaily, L., & Soelasih, Y. (2017). What effects repurchase intention of online shopping. International Business Research, 10(12), 113-122.
Sudaryanto, S., Subagio, A., & Meliana, M. (2021). Does COVID-19 affect online experience towards repurchase intention? An empirical study in Indonesia. The Journal of Asian Finance, Economics and Business, 8(6), 1013-1023.
Tsarenko, Y., Strizhakova, Y., & Otnes, C. C. (2019). Reclaiming the future: Understanding customer forgiveness of service transgressions. Journal of Service Research, 22(2), 139-155.
Tang, X., Chang, E. C., Huang, X., & Zhang, M. (2018). Timing and compensation strategies in service recovery. Journal of Services Marketing, 32(6), 755–766.
Tyrväinen, O., & Karjaluoto, H. (2022). Online grocery shopping before and during the COVID-19 pandemic: A meta-analytical review. Telematics and Informatics, 71, 2022, 101839.
Umashankar, N., Ward, M. K., & Dahl, D. W. (2017). The benefit of becoming friends: Complaining after service failures leads customers with strong ties to increase loyalty. Journal of Marketing, 81(6), 79-98.
Van Vaerenbergh, Y., Varga, D., De Keyser, A., & Orsingher, C. (2019). The service recovery journey: Conceptualization, integration, and directions for future research. Journal of Service Research, 22(2), 103-119.
Wei, C., Liu, M. W., & Keh, H. T. (2020). The road to consumer forgiveness is paved with money or apology? The roles of empathy and power in service recovery. Journal of Business Research, 118, 321-334.
Weiss, H. M., & Cropanzano, R. (1996). Affective events theory. Research in organizational behavior, 18(1), 1-74.
Xie, B., Qi, Z., & Zu, E. (2020). Research on the effect of service recovery quality on customer repurchase intention in online shopping. Revista Argentina de Clínica Psicológica, 29(5), 96.
Yuan, D., Lin, Z., Filieri, R., Liu, R., & Zheng, M. (2020). Managing the product-harm crisis in the digital era: The role of consumer online brand community engagement. Journal of Business Research, 115, 38-47.