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The harmful consequences of failed recoveries in the banking industry

Ana B. Casado (Department of Marketing, Faculty of Economics, University of Alicante, Alicante, Spain)
Juan L. Nicolau (Department of Marketing, Faculty of Economics, University of Alicante, Alicante, Spain)
Francisco J. Mas (Department of Marketing, Faculty of Economics, University of Alicante, Alicante, Spain)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 1 February 2011

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Abstract

Purpose

This paper aims to examine which behaviour or set of behaviours customers are prone to follow in double deviation scenarios (i.e. consumption experiences in which customers face both the initial service failure and a failed service recovery), as well as how customers' perceptions of the problem and the firm's recovery efforts may influence these behaviours.

Design/methodology/approach

The paper uses multinomial logit models with random coefficients to test the proposed model.

Findings

Magnitude of service failure, explanations, apologies, perceived justice, anger and frustration felt by the customer, and satisfaction with the service recovery have significant and different effects on customers' choice of a type of response.

Research limitations/implications

Additional research should try to determine the effects of different variables and their potential interactions. Further work incorporating different subjects, service settings or additional combinations of complaining behaviours is needed to validate the results of this investigation.

Practical implications

This study highlights the importance of effective management of consumer responses to double deviations. Even when it is not possible to respond to customer complaints the first time, firms can learn from double deviations. Furthermore, new market entrants and competitors who want to capture consumer switchers should recognise what happened and try to avoid making the same mistakes.

Originality/value

This study is the first to examine the consequences of double deviations by considering the multi‐dimensional nature of complaint behaviour and the existence of simultaneous responses. This study is based on analyses of real service failures and recovery strategies and actual customer behaviour.

Keywords

Citation

Casado, A.B., Nicolau, J.L. and Mas, F.J. (2011), "The harmful consequences of failed recoveries in the banking industry", International Journal of Bank Marketing, Vol. 29 No. 1, pp. 32-49. https://doi.org/10.1108/02652321111101365

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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