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Leveraging service recovery strategies to reduce customer churn in an emerging market

Author

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  • Sourav Bikash Borah

    (Indian Institute of Management)

  • Srinivas Prakhya

    (Indian Institute of Management)

  • Amalesh Sharma

    (Texas A&M University)

Abstract

Building on the properties of emerging markets, we investigate how a firm should align its service recovery strategies with different types of service failure to reduce customer churn in an emerging market. Using resource exchange theory and a multi-method approach, we show that the conventional wisdom related to service recovery needs to be reevaluated in emerging markets. Our results show that process failures lead to a higher likelihood of customer churn compared to outcome failures in emerging markets. Investigating service recovery mechanisms, we find that compensation is more effective in recovering from process failures than in recovering from outcome failures in emerging markets. Similarly, employee behavior has a stronger impact on mitigating the ill effects of process failures than those of outcome failures. The study contributes to the literature on service recovery and resource exchange theory and provides managerial insights for the effective management of customer churn due to service failures in emerging markets.

Suggested Citation

  • Sourav Bikash Borah & Srinivas Prakhya & Amalesh Sharma, 2020. "Leveraging service recovery strategies to reduce customer churn in an emerging market," Journal of the Academy of Marketing Science, Springer, vol. 48(5), pages 848-868, September.
    • Handle: RePEc:spr:joamsc:v:48:y:2020:i:5:d:10.1007_s11747-019-00634-0
    DOI: 10.1007/s11747-019-00634-0
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    Cited by:

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    3. Vijayakumar Bharathi S & Dhanya Pramod & Ramakrishnan Raman, 2022. "An Ensemble Model for Predicting Retail Banking Churn in the Youth Segment of Customers," Data, MDPI, vol. 7(5), pages 1-15, May.
    4. Vishal Shukla & Sanjeev Prashar & Bhartrihari Pandiya, 2022. "Is price a significant predictor of the churn behavior during the global pandemic? A predictive modeling on the telecom industry," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(4), pages 470-483, August.
    5. Muhammad Mazhar & Muhammad Amir Nadeem & Haider Ali Abbasi & Umaima Tariq & Amin Jan & Rao Abdul Hannan Jaffar, 2022. "Reparation for Service Failure Through Service Recovery: An Assessment of Consumer Behaviour in an Online Shopping Context," Business Management and Strategy, Macrothink Institute, vol. 13(1), pages 64-87, June.
    6. Anirban Adhikary & Krishna Sundar Diatha & Sourav Bikash Borah & Amalesh Sharma, 2021. "How does the adoption of digital payment technologies influence unorganized retailers’ performance? An investigation in an emerging market," Journal of the Academy of Marketing Science, Springer, vol. 49(5), pages 882-902, September.
    7. Lily (Xuehui) Gao & Evert Haan & Iguácel Melero-Polo & F. Javier Sese, 2023. "Winning your customers’ minds and hearts: Disentangling the effects of lock-in and affective customer experience on retention," Journal of the Academy of Marketing Science, Springer, vol. 51(2), pages 334-371, March.

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