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

  • Sourav Bikash BorahEmail author
  • Srinivas Prakhya
  • Amalesh Sharma
Original Empirical Research

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.

Keywords

Service recovery Emerging markets Type of failure Multi-methods 

Notes

Acknowledgements

The authors would like to thank the special issue Guest Editors and the anonymous reviewers for their guidance and support in the review process. We are also grateful to the dissertation advisory committee of Sourav Bikash Borah at Indian Institute of Management, Bangalore for providing feedback in an earlier version of the manuscript. The authors would like to thank Naufel Vilcassim, Rajan Vardarajan, Jagdish Sheth, and Constantine Katsikeas for their insightful guidance at various stages during the development of the paper.

Supplementary material

11747_2019_634_MOESM1_ESM.docx (37 kb)
ESM 1 (DOCX 37 kb)

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Copyright information

© Academy of Marketing Science 2019

Authors and Affiliations

  • Sourav Bikash Borah
    • 1
    Email author
  • Srinivas Prakhya
    • 2
  • Amalesh Sharma
    • 3
  1. 1.Indian Institute of ManagementAhmedabadIndia
  2. 2.Indian Institute of ManagementBangaloreIndia
  3. 3.Mays Business SchoolTexas A&M UniversityCollege StationUSA

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