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The effects of relationship length on customer profitability after a service recovery

Author

Listed:
  • Mathieu Béal

    (Univ Grenoble Alpes ComUE)

  • William Sabadie

    (University Jean Moulin Lyon3)

  • Yany Grégoire

    (HEC Montréal)

Abstract

Relationship length and its implications for service recovery have rarely been quantified in terms of cross-buying and customer profitability. Based on a sample of 935 customers in the retail banking sector, the current research provides two core contributions. First, the results reveal that change in cross-buying is a crucial mediator to capture how service recovery contributes to a change in customer profitability. Second, this research contributes to the ongoing debate regarding the role of relationship variables on customers’ reactions to service recovery by investigating the moderating role of relationship length. From the use of archival data, the results show that when customers are dissatisfied with a recovery, a favorable protective effect arises, prompting an increased change in cross-buying. However, as the relationship gets longer, the positive effect of a successful service recovery on change in cross-buying keeps decreasing. The theoretical and managerial implications of these findings are discussed.

Suggested Citation

  • Mathieu Béal & William Sabadie & Yany Grégoire, 2019. "The effects of relationship length on customer profitability after a service recovery," Marketing Letters, Springer, vol. 30(3), pages 293-305, December.
    • Handle: RePEc:kap:mktlet:v:30:y:2019:i:3:d:10.1007_s11002-019-09505-8
    DOI: 10.1007/s11002-019-09505-8
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    References listed on IDEAS

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    Cited by:

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    2. Fu, Xiaorong & Pang, Jing & Gursoy, Dogan, 2022. "Effects of online commercial friendships on customer revenge following a service failure," Journal of Business Research, Elsevier, vol. 153(C), pages 102-114.
    3. Béal, Mathieu & Suri, Anshu & Nguyen, Nguyen & Grégoire, Yany & Sénécal, Sylvain, 2022. "Is service recovery of equal importance for private vs public complainers?," Journal of Business Research, Elsevier, vol. 153(C), pages 392-400.
    4. Lee, Myounggu & Cho, Jihoon & Kim, Youngju & Kim, Hye-Jin, 2023. "Impact of movie-watching on cross-selling revenue in shopping malls: Implications for post-pandemic recovery," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    5. Arsenovic, Jasenko & De Keyser, Arne & Edvardsson, Bo & Tronvoll, Bård & Gruber, Thorsten, 2021. "Justice (is not the same) for all: The role of relationship activity for post-recovery outcomes," Journal of Business Research, Elsevier, vol. 134(C), pages 342-351.

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