Customer Perception of Time and Complaint Outcome during the Service Recovery Process

Abstract

Past research has not been conclusive regarding the impact of "time" on customer evaluation of service recovery efforts. This study aimed to determine the relative importance of 'customer time', 'complaint handling time' and 'complaint outcome' as they influenced the evaluation of banks service recovery efforts in a South American country, Chile. To address these objectives, two studies were undertaken in the context of an exploratory sequential mixed methods design employing focused interviews and a survey. The first component of the design consisted of 25 focused interviews of Chilean customers of the retail banking industry. Hycner's (1999) 11 step process was used to analyse the qualitative data. The second component of the design consisted of a questionnaire that was administered to 360 Chilean customers who were entering or exiting a bank. A three-way factorial MANOVA was performed to examine the differences across the dependent variables. Results showed that the time invested by customers looking for a solution to the complaint and the time taken by banks to solve the complaint were equally important in the minds of the customers. The results of this research signal how banks may be able to develop and implement service marketing strategies to increase the evaluation of service recovery efforts. In short, banks could improve this evaluation by reducing customer time and complaint handling time. This paper provides an empirical analysis of two different types of time: customer time and complaint handling time. It also links these two types of time with complaint outcomes.