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http://dx.doi.org/10.18807/jsrs.2016.6.3.057

A study on the influence of service recovery activities on churning commodities (Focus on the Cable-TV Industry)  

Kyung, Seung Hyun (Dept. of business administration, Chonnam National University)
Cheong, Ki Ju (Chonnam National University / Korea Customercenter Information Research Center)
Publication Information
Journal of Service Research and Studies / v.6, no.3, 2016 , pp. 57-78 More about this Journal
Abstract
The purpose of this research is to study how service recovery activities influence customers' commodity churning in the media telecommunication industry(CATV industry). Put it differently, we tried to identify this change of commodity churning rates by the stages of service failures, by which we intend to emphasize the importance of service recoveries. Korean media telecommunication market has already been saturated; customers tend to move to bigger major companies with better customer care increasingly. As once customers gone never returns, CRM functions are being reinforced over the time. We were able to have the following results. First, turning rates, for those experienced service failure, who were dissatisfied with service recovery activities are 2~5 times (monthly average turning rates are 1.3%) higher than those satisfied. Secondly, active service recovery activities at the customer's service request after experiencing service failure lowered churning rates significantly. The most effective timing is service recovery activities pre-recovery stage. Thirdly, reward activities after service recovery activities at the immediate recovery stage is more effective than service recovery at the arranged recovery schedule and reward activities after customer's expressing churning intension. The implications of this study are that firms should engage in service recovery activities at the time of identifying service failures, prior to customer's expressing churning intention, which means relatively lower ROI for the service recovery activities than the times of customers' expressing churning intention.
Keywords
Service Recovery; Service Recovery activities; Churning; telecommunication Industry; Service Recovery Framework;
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