Exploring Customer Loyalty Following Service Recovery

Abstract

Existing research shows that loyalty is a function of customer perceptions of trust following service recovery. The authors propose a cognitive appraisal model that portrays trust and emotions as key mediators in the relationship between perceived justice and customer loyalty. A structural equation model was used to test the conceptual model. The findings support the conjecture that emotions and trust have important mediating roles during the service recovery process. Furthermore, while existing research has focused primarily on negative emotion, the authors' model adopts a two-dimensional view of emotion (positive and negative emotions), and the results support the inclusion of both dimensions. Overall, the empirical support for the proposed model has important managerial implications for effective relationship management. By understanding the important mediating roles of trust and emotion, service employees can deliver more effective service recovery strategies and thereby enhance customer loyalty.