Leveraging service recovery strategies to reduce customer churn in an emerging market

Sourav Bikash Borah (), Srinivas Prakhya () and Amalesh Sharma ()
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Sourav Bikash Borah: Indian Institute of Management
Srinivas Prakhya: Indian Institute of Management
Amalesh Sharma: Texas A&M University

Journal of the Academy of Marketing Science, 2020, vol. 48, issue 5, No 4, 848-868

Abstract: Abstract Building on the properties of emerging markets, we investigate how a firm should align its service recovery strategies with different types of service failure to reduce customer churn in an emerging market. Using resource exchange theory and a multi-method approach, we show that the conventional wisdom related to service recovery needs to be reevaluated in emerging markets. Our results show that process failures lead to a higher likelihood of customer churn compared to outcome failures in emerging markets. Investigating service recovery mechanisms, we find that compensation is more effective in recovering from process failures than in recovering from outcome failures in emerging markets. Similarly, employee behavior has a stronger impact on mitigating the ill effects of process failures than those of outcome failures. The study contributes to the literature on service recovery and resource exchange theory and provides managerial insights for the effective management of customer churn due to service failures in emerging markets.

Keywords: Service recovery; Emerging markets; Type of failure; Multi-methods (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s11747-019-00634-0

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