Do service firm employee and customer relations matter for customer forgiveness in service recovery?

• Published in: Asia Pacific journal of marketing and logistics 2019-09, Vol.31 (4), p.1216-1232
• Main Author: Muhammad, Lakhi
• Format: Article
• Language: English
• Subjects: Banking industry; Banks; Customer relations; Customer services; Employees; Failure; Researchers; Social capital; Social networks; Structural equation modeling; Studies
• ISSN: 1355-5855; 1758-4248
• DOI: 10.1108/APJML-09-2018-0355

Purpose Customer forgiveness is gaining importance in service recovery. This study debates that service firm employees and the customers’ relations are supportive resources for the customer while deciding for forgiveness. Accordingly, the purpose of this paper is to test the effects of structural, relational and cognitive social capital on customer forgiveness and thereof the effects of customer forgiveness on negative word of mouth and repatronage intentions. Design/methodology/approach Partial least squares–structural equation modeling was employed to test the hypothesized relations on usable data from 428 banking customers who registered their complaint recently. Findings Results show that structural, relational and cognitive social capital explained a unique variance in customer forgiveness with significant positive influence, whereas customer forgiveness has a significant positive effect on repatronage intentions and a significant negative influence on negative word of mouth. Originality/value Customer forgiveness is a convincing idea in service recovery. This study proposed and empirically verified that social capital in relations of service firm employee and customer relations is important for customer forgiveness to minimize negative word of mouth and enhance repatronage intentions.