Service failure and customer defection in online shops in Iran: customer-based view

Providing high quality services in order to retain customers is one of the biggest concerns of online businesses today. Yet, service failure is an integral part of services, which largely concludes into customer defection. Thus, managers should be conscious about the service failure threat and have strong service recovery strategies in place, in order to win customers back after their occurrence. The online shop industry is experiencing its very early stages in Iran in a special form these years. Yet, there is not much knowledge available about this industry and particularly not about service failure and recovery. Therefore, online shops performance in accordance with service failure- recovery and their impact on Iranian online shopper has become the focus of this study. This thesis has been based on customer’s perspectives and their experiences in online shopping. Quantitative approach and e-questionnaire as data collection tool were used in the conduction of this study. The finding suggests that although online shops are severely breaching few fundamental business principles, customer defection and negative WOM are not happening in high rates. In addition, winning the Iranian customer back to normal state through service recovery is not quite the same as similar studies in other countries suggest.

Author: Boroumand, Leila

Source: Luleå University of Technology

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