Impact of complaint management process on customer loyalty

Abstract

Complaints are generally made by customers who are dissatisfied with the offer. However, it is important to note that only a fraction out of the dissatisfied customers complains and others simply will spread negative word of mouth. While service failures are inevitable, successful recovery after a service failure is something every organization can work on and it has also been identified as an important aspect of customer repurchase behavior. More importantly, it is suggested in the literature, that effective service recovery can even be better than delivering the service right in the first place in capturing loyalty. The current study using a sample of 371 respondents comprising 16-25-year-olds looks at the importance of the complaint handling process on customer repurchase behavior. Due to the nature of variables structural equation modeling was used to analyze the data, where PLS regression was used as the statistical tool. The study found out that ease of complaining; both physical and cognitive ease, is important for perceived complaint resolution satisfaction and brand image. Further, complaint satisfaction and brand image positively impact customer loyalty as mediators.