Understanding the Role of Complaint Handling on Consumer Loyalty in Service Relationships

Abstract

The authors explore the role of 5 drivers of loyalty: customer usage level, service pricing, service quality, membership in the firm's loyalty program, and satisfaction with complaint handling. The effects of these drivers may differ for customers who complain versus those who do not complain, as well as for satisfied complainers versus dissatisfied complainers. Testing the proposed models with customers of a large airline, the authors found that satisfaction with complaint handling was key to consumer recommendation of the service to others. The results also underscore the importance of service quality and service pricing as determinants of customer loyalty.

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