Service recovery and customer loyalty in the logistics industry: the role of justice perceptions and switching costs

Purpose This study delves into the intricate dynamics between the severity of service failures and the justice perceptions of B2B customers, with a specific focus on their impact on subsequent service recovery satisfaction. Furthermore, it explores the nuanced relationship between recovery satisfaction and repurchase intention while scrutinizing the influence of perceived switching costs on this interaction. Design/methodology/approach The study centers around the logistics service market, employing institutional customers of logistics services as the primary unit of analysis. The conceptual model is empirically tested using a dataset comprising responses from 196 participants, employing PLS-SEM as the analytical approach. Findings The study reveals a negative impact of service failure severity on justice perceptions, with distributive justice showing no influence on recovery satisfaction. However, procedural justice and interactional justice positively affect recovery satisfaction. Furthermore, a positive connection is identified between service recovery satisfaction and repurchase intention, with perceived switching costs acting as a negative moderator in this interaction. Research limitations/implications This research reaffirms the interplay between justice perceptions, recovery satisfaction and repurchase intention in B2B service settings. It underscores the influence of service failure severity on justice perceptions and establishes perceived switching cost as a moderator in the interaction between recovery satisfaction and repurchase intention. Practical implications The study underscores the imperative of careful and empathetic handling of distressed customers by personnel. Through effective recovery efforts and a well-calibrated combination of recovery mechanisms, service providers can instill a perception of higher switching costs in customers, acting as a deterrent to changing service providers. Originality/value This study is one of its kind which examines customer responses in the post-recovery phase of the service recovery journey, providing unique insights into the interaction between service failure severity, justice perceptions, recovery satisfaction, perceived switching costs and repurchase intention. Its contribution extends to the B2B services domain, particularly within the context of an emerging economy.