Structural Equation Modeling of E-Service Recovery Satisfaction and Customer Retention in the Airline Industry in Malaysia

Abstract

In the age of the internet, customer retention has become a crucial element in firms' survival. Losing customers to competitors in the e-context is a constant threat, as the potential for this loss is 'only a click away'. The current study suggests two new constructs, accumulative trust and digital commitment as customer determinants appropriate for the online context. This study aims to investigate the effect of three customer determinants (accumulative trust, customer perception of feedback and digital commitment) on customer retention, focusing on the role of e-service recovery satisfaction as a mediator in these relationships. The investigation is in the context of the Malaysian Airline industry in general. Quantitative methodology was adopted using a self-administered questionnaire as the tool for data collection. The unit of analysis was Malaysian passengers who travel with different local airlines and who faced service failures. Structural equation modelling (SEM) was employed to analyse the data. The findings confirmed that e-service recovery satisfaction has a mediating influence on the relationships between accumulative trust and digital commitment and customer retention.

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