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2.6 Service Failure/Recovery
Although offering error-free services is the ultimate goal for most service firms, service
failure is difficult to avoid because of increased interactions between service firms and
customers (Kelley and Davis, 1994; Kelley et al., 1993; Patterson et al., 2006). Effective
service recovery has been found to have a significant impact on customer judgment of
service providers and the overall service experience (McCollough et al., 2000). Despite a
growing body of literature on service failure and recovery (Babakus et al., 2003; Bitner et al.,
1990; Kelley and Davis, 1994), several areas for future research still require further
investigations. For example, while past research mainly adopted experimental design to
manipulate service failures, future studies can explore service failure issues from real cases
and situations. In addition, as SST failures happen frequently in service experiences, issues
such as how customers respond to SSTs failures, what constitutes a successful SST recovery,
and the different roles of employees and customers in the recovery process should be further
explored. Additional research is also needed in examining the impact of multiple service
failures on service experiences.
2.7 Customer Loyalty Management
As market competition intensifies with diminishing customer loyalty, firms are
exploring ways to increase customer retention (Reichheld and Teal, 2001). Researchers and
practitioners have identified relationship quality and switching barriers as determinants of
customer loyalty. A favorable perception of relationship quality leads to higher customer
loyalty (Hennig-Thurau et al., 2002), while switching barriers serve as a mean of locking in
customers (Colgate et al., 2007; Jones et al., 2000; Patterson and Smith, 2003; Wang, 2010).
Although there is a consensus that relationship quality is a multi-dimensional construct, past
studies have not reached an agreement on its sub-dimensions, which requires future
investigations. Future research should also investigate the roles individual differences and
culture variables play between relationship quality and customer loyalty. Furthermore,
another area for future research is to examine how individual differences affect the switching
barriers-customer retention relationships in different service contexts.