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07-02-2019 | Original Empirical Research | Issue 5/2020

Journal of the Academy of Marketing Science 5/2020

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

Journal:
Journal of the Academy of Marketing Science > Issue 5/2020
Authors:
Sourav Bikash Borah, Srinivas Prakhya, Amalesh Sharma
Important notes

Electronic supplementary material

The online version of this article (https://​doi.​org/​10.​1007/​s11747-019-00634-0) contains supplementary material, which is available to authorized users.
Author order is alphabetical and all authors contributed equally to this research.
Rajendra Srivastava and V. Kumar served as Special Issue Guest Editors for this article.

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Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

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.

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