Banking service recovery and consumer loyalty: The mediating role of satisfaction

Abstract

This study aims to prove the effect of justice-based service recovery on satisfaction and its impact on loyalty. The related justices intended are distributive, procedural, and interactive. Also, proving satisfaction as mediated by the Sobel test becomes another purpose. Then, to achieve these purposes, this study employs banking customers in a few areas in West Java (Bandung and Cirebon Cities, as well as the Purwakarta Regency) as the population and samples them by snowball sampling. Fortunately, 230 collected responses exist; hence, the structural equation based on covariance is applicable to examine hypotheses. As a result, this study finds a positive tendency of distributive, procedural, and interactive justice on satisfaction, and distributive justice has a leading influence. A similar sign occurs in the association between satisfaction and loyalty. According to the mediating test, customer satisfaction can mediate the relationship between the three justices and loyalty. Based on these facts, this study recommends that banks compensate the users for the disappointing situation and handle their complaints by providing procedures and responsive and skilled staff to help. Importantly, banks should give the gift as a sign of appreciation for complaints. These actions can encourage banking users to share positive information with their friends, family, and workmates based on their experience.