Service recovery in consumer banking in China Dissertation - 1

Service recovery in consumer banking in China - Dissertation Example Moreover, the study also showed that the effectiveness of the same positively influenced the intention of the customers to stay with the banks (CUSTOMER LOYALTY). The importance of service recovery is usually taken into consideration when something in a service delivery goes wrong, Segelstrom and Howard (n.d.) discusses. Basically, the concept of service recovery is based on the fact that a company must take action to ensure that their customers or clients get the desired outcome notwithstanding the fact that the prior delivery has already failed. In addition thereto, it is through service recovery that the company in question rectifies their own processes in order to avoid the same mistake (Segelstrom and Howard n.d.). The importance of service recovery is usually the focus of researches within service management and service marketing (Bell and Zemke 1987; Bitner, Booms and Mohr 1994; Bitner, Booms and Tetreault 1990; Hart, Hesskett and Sasser Jr. 2000). According to the studies con ducted with respect to the said matter, service recovery is of paramount importance to the companies as the cost of attracting a new customer is significantly larger than retaining a new one (Bell and Zemke 1987; Hart, Heskett and Sasser Jr. 2000; Segelstorm and Howard n.d.). In addition thereto, researches conducted also pointed out that service failure and subsequent recovery positively affects the loyalty of the customers toward a certain company providing them with different kinds of services. The importance of service recovery was also discovered to be of paramount importance in financial institutions such as banks. In view of the same, this paper focuses on the analysis of service recovery and how it influences customer loyalty in banks.