Switching Barriers’ Influences on Service Recovery Evaluation in the Retail Banking Industry: Construct Development and Testing

Abstract

The main goal of the present research was to determine the influence of switching barriers on service recovery evaluation in order to explore ways in which banks can improve their recovery performance. The research develops and tests two scales that measure service recovery and switching barriers and uncovers the existence of a six-factor structure measuring service recovery (reversing bank mistakes, customer compensation, customer time and effort, treatment of customers, complaint handling time and power of bank employees to make decisions). The investigation also confirms the existence of a five-factor structure measuring switching barriers (organizational credibility, value congruency, relational value, difficulties of switching banks and lack of attractive banking alternatives). In addition, the study shows that the dimensions of organizational credibility, value congruency and relational value relate positively to service recovery evaluation, while the dimension concerning difficulties of switching banks is negatively related to service recovery evaluation.