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Journal of the Academy of Marketing Science
Erschienen in: Journal of the Academy of Marketing Science 5/2020

07.02.2019 | Original Empirical Research

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

verfasst von: Sourav Bikash Borah, Srinivas Prakhya, Amalesh Sharma

Erschienen in: Journal of the Academy of Marketing Science | Ausgabe 5/2020

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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.
Vorheriger Artikel A theoretical model of the formation and dissolution of emerging market international marketing alliances
Nächster Artikel How nostalgic brand positioning shapes brand equity: differences between emerging and developed markets

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9
Details of the comments and the themes can be provided upon request. A snapshot of the comments is presented in the Web Appendix.
 
10
We conduct an additional robustness analysis with customer (dis)satisfaction as the dependent variable.
 
15
This type of setting may sometimes create sample selection bias. To check and mitigate this potential bias, we conduct a set of behavioral experiments and find that the results are sample selection bias resistant.
 
16
Note that in the context of our data, customers have faced failure for the first time. We note that the exposition and modeling of repeat failure and its impact on churn is an important future research avenue given the data availability. However, in the behavioral experiments, we explicitly control for same.
 
17
Note that the percentage composition of outcome and process failures is different, which may bias the results. We test the proposed relationships with the behavioral experiments to remove any potential issues with the field data.
 
18
In a separate analysis, we attempted to account for the endogeneity using the Latent Instrument Variables approach; however, this approach did not return any fruitful results.
 
20
We have presented our results to one of the firms in the hospitality industry, which has expressed a willingness to implement our findings. We are still in negotiation with that firm about a data-sharing agreement.
 
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Metadaten
Titel
Leveraging service recovery strategies to reduce customer churn in an emerging market
verfasst von
Sourav Bikash Borah
Srinivas Prakhya
Amalesh Sharma
Publikationsdatum
07.02.2019
Verlag
Springer US
Erschienen in
Journal of the Academy of Marketing Science / Ausgabe 5/2020
Print ISSN: 0092-0703
Elektronische ISSN: 1552-7824
DOI
https://doi.org/10.1007/s11747-019-00634-0

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