Service Recovery Strategy Relationship to Cumulative Satisfaction and Loyalty: A Study on Bandung City Insurance Companies, Indonesia

Abstract

In so many service industries, there will always be possibility that consumer experiences dissatisfaction to quality of service given by company. Customer dissatisfaction can be reflecting from complain submitted at company, discuss this with others or even changes over to other service provider. If service failure generating dissatisfaction of consumer happened in corporate, hence company can perform service recovery to return satisfaction of consumer. Service recovery is believed not only can return satisfaction of consumer losing however also can maintain loyalty consumer to service provider. The study aim is to test whether service recovery strategy relationship to cumulative satisfaction and loyalty on the geographical perspective of Bandung city Insurance companies, Indonesia. Satisfaction with service recovery consisted of communication, empowerment, feedback, atonement, education, and tangibles. Research model applied in this research adaptation from research model Boshoff (2005). Sampling technique used convenience sampling, total sample in this research to 200 respondents from insurance company in Bandung which has experienced service recovery. Statistical test applies multiple regression method with supported by SPSS 16. After done statistical testing the hypothesis, the result that independent variable (satisfaction with service recovery) what can explain variable dependent (cumulative satisfaction) are communication, feedback, and education about the reasons of dissatisfaction, equal to 62.9%. While cumulative satisfaction can only explain loyalty equal to 47.5% only, mean there are still other factor influencing consumer loyalty after service recovery further satisfaction to service recovery applied by insurance company.