The effects of service recovery and relational selling behavior on trust, satisfaction, and loyalty

Abstract

Purpose The purpose of this paper is to investigate the relationship between service recovery and relational selling behavior on trust and satisfaction in the banking industry. Specifically, the mediating role of trust and satisfaction on the relationship between service recovery, relational selling behavior and loyalty is empirically examined. Design/methodology/approach Hypotheses are developed based on the literature review. The conceptual model is tested using SEM on survey data collected from 560 customers of 12 banks in Taiwan, including local banks and foreign banks. Findings The model test results indicate that the influences of service recovery and relational selling behavior on trust and satisfaction are both significant. In addition, the influences of trust and satisfaction on loyalty are significant. Practical implications For bank managers, it is crucial to have well programs to identify service failures and handle recoveries efficiently and effectively. Furthermore, bank managers should place a high value on increasing salesperson’s customer-oriented behaviors to discern potential problems that customer concerns and provide suitable solutions that customer needs. By creating these better customer experiences, greater trust, satisfaction and loyalty can be yielded. Originality/value This study aims to provide a superior understanding of the relationship between service recovery, relational selling behavior, trust, satisfaction and loyalty in the banking industry. The research findings can contribute to forming targeted strategies and gaining competitive advantages for bank managers.