Perspectives Service Failures and Customer Defection: a Closer Look at Online Shopping Experiences
Perspectives Service failures and customer defection: a closer look at online shopping experiences
Sohel Ahmad
Introduction
Although many companies have entered the world of e-commerce in the past few years, very few have been able to attain competitive advantage. In fact, a significant number of online companies have gone bankrupt ± a phenomenon often referred to in the popular press as the dotcom bust. Unrealistic expectations and use of the wrong business model have often been mentioned as the major reasons for these companies' failures (Budzynski, 2001). The present study, however, examines certain aspects of the online shopping experience from a consumer's perspective. Specifically, this study focuses on how consumers react to service failures and which initiatives by the online shop can enhance service recovery.
The author Sohel Ahmad is an Assistant Professor in the Department of Management, St Cloud State University, St Cloud, Minnesota, USA Keywords Shopping, Guarantees, Complaints, Customer loyalty, Online computing Abstract This study attempts to understand certain aspects of the online shopping experience from a consumer's perspective. In particular, this study investigates the interaction between service failure and online shops' readiness for service recovery and the resulting impact on customer defection. The findings of the present study suggest that some online shops have severely breached a few fundamental business principles, resulting in lost customers. Specifically, this study finds that failure to institute adequate complaint management and service recovery systems contributed to customer defection. Hence, service recovery and customer retention need to be given due importance during the service design phase, and appropriate management decisions have to be made upfront rather than after service failures occur when it may be too late. Electronic access The research register for this journal is available at
Sohel Ahmad
Introduction
Although many companies have entered the world of e-commerce in the past few years, very few have been able to attain competitive advantage. In fact, a significant number of online companies have gone bankrupt ± a phenomenon often referred to in the popular press as the dotcom bust. Unrealistic expectations and use of the wrong business model have often been mentioned as the major reasons for these companies' failures (Budzynski, 2001). The present study, however, examines certain aspects of the online shopping experience from a consumer's perspective. Specifically, this study focuses on how consumers react to service failures and which initiatives by the online shop can enhance service recovery.
The author Sohel Ahmad is an Assistant Professor in the Department of Management, St Cloud State University, St Cloud, Minnesota, USA Keywords Shopping, Guarantees, Complaints, Customer loyalty, Online computing Abstract This study attempts to understand certain aspects of the online shopping experience from a consumer's perspective. In particular, this study investigates the interaction between service failure and online shops' readiness for service recovery and the resulting impact on customer defection. The findings of the present study suggest that some online shops have severely breached a few fundamental business principles, resulting in lost customers. Specifically, this study finds that failure to institute adequate complaint management and service recovery systems contributed to customer defection. Hence, service recovery and customer retention need to be given due importance during the service design phase, and appropriate management decisions have to be made upfront rather than after service failures occur when it may be too late. Electronic access The research register for this journal is available at