The effects of relationship quality on customer retaliation
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The effects of relationship quality on customer retaliation Yany Gr´egoire · Robert J. Fisher
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Springer Science + Business Media, Inc. 2006
Abstract This research examines the effects of relationship quality (RQ) on customers’ desires to retaliate after service failures. We posit that the effects of RQ are contingent upon the attributions customers make about the firm’s controllability over a service failure. Two competing hypotheses are examined and reconciled. The “love is blind” hypothesis posits that when low controllability is inferred, high RQ customers experience a lesser desire for retaliation than low RQ customers. On the other hand, the “love becomes hate” hypothesis specifies that when high controllability is inferred, high RQ customers experience a greater desire for retaliation than low RQ customers. The hypotheses are tested with a surveybased design and a partial least squares (PLS) model that incorporates a multiplicative latent construct. Keywords Retaliation · Relationship quality · Controllability · Service failure · SEM · PLS · Complaint behaviors The effects of relationship quality on customer retaliation Customers who have a strong relationship with a service provider or retailer represent a key asset for service firms (Dowling and Uncles, 1997; Rigby et al., 2002). Research suggests that strong relationship customers are more profitable because they shop more regularly (De Wulf et al., 2001), spend more per visit (De Wulf et al., 2001), are willing to pay a premium on the products and services they buy (Dowling and Uncles, 1997), and cost less to serve (Rigby et al., 2002). Although recent research has challenged the profitability of investing in Y. Gr´egoire () Department of Marketing, Washington State University, P.O. Box 644730, Pullman, WA 99164-4730, USA e-mail: [email protected] R. J. Fisher Nabisco Professor of Marketing, Richard Ivey School of Business, University of Western Ontario, London, Ontario, Canada, N6G 1Y3 e-mail: [email protected] Springer
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Market Lett (2006) 17: 31–46
strong customer relationships (Reinartz and Kumar, 2000), relationship building remains a priority for many service firms (Rigby et al., 2002). Despite a growing interest in Customer Relationship Management (CRM), prior research has not examined the effects of relationship strength or quality when customers are confronted with service failures. Such an omission is surprising and calls for more attention from marketing and consumer researchers. Understanding how relationship affects the customers’ responses to service failures is important because service failures have the potential to transform valuable customers into “enemies,” a result that could have serious consequences for a firm’s reputation and long-term profitability. This research focuses on the effects of relationship upon customer retaliation, which is defined as a customer’s efforts to punish and make a service firm pay for the damages it has caused (cf. Skarlicki and Folger, 1997). Two rival explanations exist as to the effects of re
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