Service Recovery in Chatbot‐mediated Environments: Trust Dynamics and Customer Loyalty Intentions

Abstract Prior research has shown that customers’ perceptions of chatbots may be influenced by the situational context in which human–chatbot interactions take place. This research advances understanding of artificial intelligence (AI)‐enabled chatbot‐led service failure recovery (SFR) in the context of customer loyalty. Using a social constructivist philosophical perspective and an inductive approach, 52 in‐depth interviews were conducted to capture individuals’ perceptions of chatbot‐led interactions during a SFR process and how these perceptions impacted their trust in, and commitment to, brands. Utilizing commitment‐trust theory and trust transfer theory, we propose a framework that characterizes the relationships between a chatbot‐led SFR process and customer loyalty intentions. Based on the emergent data, customers’ evaluations of a service recovery journey led by chatbots can be grouped into four main outcomes: continued trust in, and commitment to, chatbot and brand; continued trust in, and commitment to, brand; discontinued trust in, and commitment to, chatbot; and discontinued trust in, and commitment to, chatbot and brand. Our findings extend current understanding of how consumers’ trust and commitment during chatbot‐led interactions during SFR evolve and highlight the dynamic relationship between consumers and the context of interactions. This study has theoretical and practical implications for developing and leveraging customers’ loyalty in AI‐enabled chatbot‐led SFR environments.