UNDERSTANDING THE IMPACT OF SERVICE RECOVERY STRATEGIES TOWARDS SERVICE RECOVERY SATISFACTION AND CUSTOMER LOYALTY: A CASE OF INDIHOME INTERNET SERVICE PROVIDER

• Main Author: Fauzan Naufal Yusran, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/57206
• Institution: Institut Teknologi Bandung

Digital community era in Indonesia has grown since the last few years so that the competition between companies to fulfill customers’ needs has increased, especially in information technology and telecommunication. One of the needs is the internet. Internet is a tool that allows people to improve the quality of their life, such as education, work, entertainment, etc. which has been emerging as one of the most important tools of communication. To utilize this opportunity, companies are emerging in internet service providers industry, one of them is IndiHome. Despite an increasing number of internet provider users, in fact, IndiHome experienced service failure in serving their customers. IndiHome has been receiving many complaints from their customers, such as frequent lost or unstable internet connection and frequent network maintenance. Consequences that might occur if the problem is not solved could reduce customers’ perceptions of the quality of the service and the company, leading to negative word of mouth communication, reducing customer satisfaction, and destroying customer relationships and customer loyalty. Internet service providers should pay more attention to service recovery strategies that help to achieve service recovery satisfaction because of its significant impact on customer loyalty. Therefore this research aims to understand the impact of service recovery strategies that affect loyalty and service recovery satisfaction of IndiHome internet service provider customers, also the impact of service recovery satisfaction to customer loyalty. This research is using Structural Equation Modelling (SEM) method. Primary data is collected by an online platform called Google Form and processed by AMOS 23. The questionnaire consists of 10 sections which include introduction, permission form, demographic and behavioral questions, and the 23 questions about the six variables used in this research. The number of samples in this study is 230 respondents, which the requirements are the customers who experienced service failure at least once and already conveyed complaints to IndiHome internet service provider. The findings show that problem solving, explanation and follow up has no impact on customer loyalty but have a positive impact on service recovery satisfaction. Compensation is the only service recovery strategy that has a positive impact on both service recovery satisfaction and customer loyalty. The conclusion of this research is that IndiHome internet service providers should put more concern on their compensation strategy since it is the only one that has a positive impact on both service recovery satisfaction and customer loyalty and utilize the other strategy to gain back customer satisfaction after service failure occurs. The most important thing is obviously to not do any service failure again and if it happens, IndiHome internet service provider knows the service recovery strategies that have to be prioritized according to these research findings.