Loyalty and its Influence on Complaining Behavior and Service Recovery Satisfaction

Abstract

Considerable research in the customer complaining behavior (CCB) literature has been focused on the effect of a successful recovery on customer loyalty and retention. However, comparatively less is known about how loyalty, as an antecedent, moderates customer responses to both a service failure and subsequent service recovery. Based on two studies conducted with non-student samples, we find that loyal customers are more likely to air their complaint directly to the firm and less likely to engage in negative word-of-mouth in response to a service failure. Also, loyal customers express greater satisfaction with service recovery efforts compared to less loyal customers when redress is offered. These results indicate that customers who complain may be among a firm's most loyal customers and such customers are potentially more responsive to service recovery efforts. However, not attending to their complaints could result in the loss of one's loyal (and best) customers. Hence, managers need to seriously consider complementing their existing loyalty programs with formal complaint management systems.