Customers whose earlier encounters have been positive are likely to switch service providers after a bad experience, even if they say they are satisfied with how the service provider treated them following their complaints, new UNSW research has found.
Professor Murali Chandrashekaran and Senior Lecturer Dr Kristin Rotte, of the Faculty of Business's School of Marketing, have explored the transformation of customer satisfaction into loyalty. The research has been reported in the February issue of Journal of Marketing Research, published by the American Marketing Association and widely recognised as the best international marketing journal
"Our research identifies which customers are vulnerable to defection, despite having high levels of satisfaction. The study draws from two individual judgment models - the customers' satisfaction level and strength," says Professor Chandrashekaran.
The research involved two study environments, the first set in a business-to-business service context. The second phase examined customer decision-making after a failed service encounter in business-to-consumer markets.
"As many economies move towards competing on service components of the value offering, recovering from service failures has become profoundly important," says Professor Chandrashekaran.
"The results suggest that after a service failure, customers with prior positive experiences and high satisfaction levels were more likely to switch service providers when the opportunity arose."