Recover From Failure: Examining the Impact of Service Recovery Stages on Relationship Marketing Strategies

PURPOSE: Given the digital transformation of service businesses by providing online food services and the influence of online reviews on consumers’ purchasing decisions, this study examines how service recovery attributes in different stages influence relationship marketing strategies, i.e., relationship quality and customer loyalty after service failure. This study is built upon a revised service recovery cycle model by accounting for three stages and their corresponding attributes; whereon a conceptual stage model of service recovery is proposed. This conceptual stage model incorporates stages of service recovery, their respective attributes, and how they influence relationship marketing strategies. DESIGN/METHODOLOGY/APPROACH: An online marketing company was employed for data collection in 2019, which resulted in 301 valid responses. A Structural Equation Model (SEM) was conducted with all the data to test the relationships between the constructs. The individual measurement model was tested using the Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA). A structural model was estimated using AMOS to test all the hypotheses. FINDINGS: The findings demonstrate that the attributes (i.e., response speed, compensation) paired with the first two stages of service recovery can significantly influence consumer loyalty in a positive state. The findings also manifest the intermediary role that relationship quality has played in the association of service recovery and consumer loyalty, which implies that the food delivery businesses could attain a more comprehended relationship quality with consumers through active and timely compensatory service recovery consumer loyalty to the food businesses. ORIGINALITY/VALUE: This study examines how these different stages of the service recovery cycle influence the decision-making of relationship marketing strategies (i.e., relationship quality, customer loyalty) on the prerequisite of service failure. This study aspires to expand the service recovery research by objectifying a conceptual stage model of service recovery, incorporating stages’ recovery attributes and how these recovery attributes reciprocally influence relationship quality and customer loyalty.