Assessing the Antecedents of Service Recovery Evaluation and their Impact on Repurchase Behaviour

Abstract

The aim of this paper is to analyse the influence of compensation, promptness and employee behaviour on customers' evaluation regarding the way companies handle customers' complaints and on their repurchase behavior. A survey was conducted based on a cross sectional random sample of customers belonging to two Chilean cities. Using Structural Equation Modelling (SEM) it was found that the best significant structure among the latent variables examined is: Compensation and Employee Behavior --> Service Recovery Evaluation --> Repurchase Behavior. It was also determined that compensation is the most important dimension for customers when evaluating service recovery efforts. The interrelationship between compensation and employee behavior was also found significant, meaning that customers are expecting both to be compensated, but at the same time to be treated well. The dimension of Promptness was not found significant in the final model, thus indicating that the issue of time pressure was not really relevant for Chilean customers.