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IJQSS
13,2
300
Received 21 July 2020
Revised 28 November 2020
17 January 2021
Accepted 26 March 2021
International Journal of Quality
and Service Sciences
Vol. 13 No. 2, 2021
pp. 300-320
© Emerald Publishing Limited
1756-669X
DOI 10.1108/IJQSS-07-2020-0115
Understanding the impact of the
relationship quality on customer
loyalty: the moderating effect of
online service recovery
Shu-Mei Tseng
Department of Hospitality Management, I-Shou University, Kaohsiung, Taiwan
Abstract
Purpose – The purpose of this study is to examine the impact of the relationship quality on customer
loyalty. The moderating role played by online service recovery in this study is further discussed.
Design/methodology/approach – A quantitative Web-based survey study was conducted to
statistically test these relationships among relationship quality, service recovery and customer loyalty. Data
collected from 183 respondents were taken for analysis through partial least squares.
Findings – The findings reveal that relationship quality has significant influence on customer loyalty, whereas
service recovery has moderated effect on the relationship between relationship quality and customer loyalty.
Research limitations/implications – The respondents of this study were recruited from online panels;
thus, a purposive sample could be a biased indication of the characteristics of the actual population. Therefore, it
is suggested that future researchers enroll subjects from a statistical population that accurately represents the
entire population and, in addition, that they collect more responses to increase the generalizability of the findings.
Practical implications – Because failures in service delivery are inevitable, recovery of such encounters
thus represents a significant challenge for service firms. Hence, this study proposes concrete suggestions for firms
to manage and operate e-commerce websites, as well as to enhance relationship quality and customer loyalty.
Originality/value – Service failures have been the bane of e-commerce, compelling customers to either
abandon transactions entirely or switch to a physical competitor. Many firms have realized the importance of
maintaining strong relationships with customers to enhance their loyalty. However, previous literature has a
few studies conducted on the relationships among service recovery, relationship quality and customer loyalty
in the e-commerce context. Therefore, it is meaningful to identify these relationships.
Keywords Service recovery, Customer loyalty, Service failures, Relationship quality
Paper type Research paper
1. Introduction
e-Commerce is distinct from offline retail in that the entire transaction is accomplished through
Web-enabled services. As the contact points between consumers and Web technologies have
increased, the service failures in e-commerce have grown proportionally (Das et al., 2019). The
failure of an e-commerce transaction will produce a negative spillover effect, causing consumers to
lose faith in the transactional process. Because of this spillover, e-commerce service failures may
adversely affect e-businesses in general because consumers may be reluctant to engage in future
online transactions as a consequence of earlier bad experiences (Sengupta et al., 2015). Moreover,
consumers can readily switch among e-commerce websites with the mere click of a mouse button.
For this reason, the majority of consumers, when confronted with e-commerce service failures, will
This research is supported by Ministry of Science and Technology, Taiwan, R.O.C. under Grant no.
MOST 106-2410-H-214-002-.
choose to simply forsake the transaction and terminate their relationship with the e-merchant (Tan Impact of the
et al., 2016). relationship
Service recovery is a topic of enduring interest in the service marketing literature (Chang et al.,
2012). Service recovery refers to the responses and activities conducted by service providers in
quality
dealing with service failures and handling customer complaints (Kelley and Davis, 1994; Bacile
et al., 2018). Customers’ responses to service failures are often negative, and when failures occur,
customers expect effective recovery efforts that meet their expectations (Maxham Iii and
Netemeyer, 2002a, 2002b; Luo and Mattila, 2020). Service recovery is a strategy that attempts to 301
rectify failures and clear the associated bad memories from the minds of customers. With regard to
the effect of recovery in offline service industry, many studies have been carried out to analyze the
effectiveness of service recovery strategies in different aspects such as satisfaction (Maxham Iii and
Netemeyer, 2002a, 2002b), justice (McQuilken et al., 2013) and repurchase intention (Huang and Lin,
2011). However, there is a different story in service failure and recovery in the online shopping
context (Gohary et al., 2016). Various incidents and issues are unique in the internet environment,
such that the circumstances surrounding an online service failure likely differ from the factors
typically at the root of offline service failures
Building strong customer relationships is a cornerstone of marketing because such
relationships improve firm profitability (Gelbrich et al., 2016; Paek et al., 2020). Therefore, it
is necessary for e-commerce retailers to maintain long-term relationships with their
customers (Lee and Wong, 2016). Palmatier et al. (2006) found that satisfaction and loyalty
toward the selling firm have proven to be key indicators of the health of interorganizational
relationships. Wang et al. (2011) suggest that service failure acts as one significant
motivator of customer switching behavior. In other words, customer loyalty toward a firm
depends at least in part on perceived service quality during the transaction experience,
where this sense of loyalty is likely to deteriorate subsequent to a service failure (Wang,
2008). Many B2C website owners thus have realized the importance of maintaining strong
relationships with customers to increase their loyalty (Kwon and Jang, 2012).
With this end in view, it should be meaningful to identify the relationships among service
recovery, relationship quality and customer loyalty in the e-commerce context (Ding and Lii, 2016;
Tajvidi et al., 2020). However, there have been few studies done on the relationships among these
(Bilgihan and Bujisic, 2015; Baliga et al., 2020; Huang and Ha, 2020). Many studies undertaken to
date have only covered the role of social support on relationship quality and social commerce (Hajli,
2014); the relationships among service failure, service recovery and loyalty (Chou, 2015; Bouranta
et al., 2019; Cheng et al., 2019; Lu et al., 2020); the influence of relationship quality on customer
loyalty (Choi et al., 2008; Lee and Wong, 2016; Rahman and Ramli, 2016; Zhang et al., 2016); and the
relationship between service recovery and reputation (Ozkan-Tektas and Basgoze, 2017). Therefore,
to bridge the aforementioned gaps in the literature, this study explores the relationships among
service recovery, relationship quality and customer loyalty in the e-commerce context. Ultimately,
specific recommendations are provided for e-commerce venders to manage and operate e-commerce
websites, as well as to enhance relationship quality and improve customer loyalty.
The remainder of the paper is organized as follows. In Section 2, the theoretical
underpinnings of the study and research hypotheses are proposed; in Section 3, the
methodology used in the study is outlined; in Section 4, the results are then presented; in
Section 5, the implications are discussed. Finally, Section 6 concludes by summarizing the
main findings and providing suggestions for future research.

2. Theoretical background and hypotheses development

To explore the relationships among service recovery, relationship quality and customer
loyalty in an e-commerce context, a questionnaire and statistical analytical techniques were
IJQSS used. Initially, the influence of relationship quality on customer loyalty was studied, after
13,2 which the moderating effects of service recovery on relationship quality and customer
loyalty were examined. The aim of this work is to provide specific suggestions for
enhancing customer loyalty. The research model is shown in Figure 1 with each concept and
research hypothesis elaborated below.

302 2.1 Electronic service failures

When an organization does not meet the customer’s expectations during a service encounter,
service failures occur (Kelley et al., 1993; Coye, 2004). Rao et al. (2011) defined service failure
as service performance that falls below a customer’s expectations. Service failure involves
activities that occur as a result of customer perceptions regarding initial service delivery
behavior falling below their expectations. Such failures can lead to lost customers (Zeithaml
et al., 1993; Bitner et al., 2000). Ha and Jang (2009) further stated that the more dissatisfied
customers become, the more likely they are to spread negative word of mouth regarding
their service experiences. The occurrence of a service failure during the process of service
delivery is very common and influences customers’ service experiences in many service
industries (Steyn et al., 2011).
The same rationale applies to e-commerce service failures. Tan et al. (2016) defined e-
commerce service failure as a negative event that occurs whenever the e-commerce website
is incapable of offering the necessary technological capabilities essential for a consumer to
accomplish his/her transactional activities and/or objectives. Because e-commerce
transactions rely on the Web-enabled interface as the focal point of contact between
consumers and e-merchants, Web technologies are indispensable in the provision of
customer-centric self-service applications, which support consumers in accomplishing a full
range of transactional activities (Xu et al., 2013). In addition, an e-commerce service
encounter depicts the entire transactional process that begins when a consumer visits a
website to query products or services to the moment when a product or service that matches
the consumer’s needs has been delivered to his/her satisfaction (Boyer et al., 2002). Holloway
and Beatty (2003) identified several types of service failures in online retailing: delivery
problems, website design problems, customer service problems, payment problems, security
problems and miscellaneous/others. Wang et al. (2011) indicated that electronic service
failure severity, interactional justice and perceived switching costs have a significant
influence on customer loyalty and that interactional justice can mitigate the negative
relationship between service failure severity and customer loyalty. Kuo et al. (2011)
investigated the service failures generated in the delivery of online auction services and
recovery strategies adopted to correct the failures and found that pricing failure, packaging
problems, size variations, mischarged and out of stock are perceived as critical failures,
where effective recovery can actually increase buyer repeat purchase intentions.

Service recovery

Figure 1. Relationship
Customer loyalty
Research model quality
2.2 Relationship quality Impact of the
DeWulf et al. (2001) defined relationship quality as customers’ perceived strength in their relationship
relationships with firms. Jackson (1985) identified three types of relationships, including
acquaintance, friend and partner, that a company can have with its customers. An
quality
acquaintance relationship exists when a customer is satisfied with the product or service a
company provides. A friendly relationship exists when the customer trusts that a company
provides differentiated value. A partner relationship exists when the customer is committed
to the company because it provides customized value. Thus, the strength of a relationship, 303
from weak to strong, moves from satisfaction to trust to commitment. Huang (2015) further
argued that relationship marketing investments enhance customer trust, commitment and
relationship satisfaction and, in turn, these relational mediators influence organizational
performance outcomes. In other words, if expectations are met, users will be satisfied and
confident. Satisfaction leads to the belief that the same quality of service will be delivered in
future. It reinforces user decisions to participate in the services being offered. Trust reduces
perceived risk and the transaction costs in the relationship, and thus positively influences
commitment (Sanchez-Franco et al., 2009; Sanchez-Franco and Rondan-Cataluña, 2010;
Dorai et al., 2021).
Relationship quality is considered to be an overall assessment of the strength of a
relationship (Garbarino and Johnson, 1999; Fernandes and Pinto, 2019; Dorai et al., 2021).
Although discussion regarding the conceptualization of relationship quality remains
unresolved, there is an agreement that relationship quality is a “higher-order construct
consisting of several distinct, although related dimensions,” and these different dimensions
must be combined to form an overall relationship quality measure (Walter et al., 2003; Cheng
et al., 2008; He et al., 2018). Grégoire et al. (2009) divided relationship quality into three
dimensions: trust, commitment and social benefits. Trust relates to customer confidence in
the reliability of the firm; commitment indicates the desire of customers to maintain their
relationship with firms; and social benefits refer to customer perceptions of a one-to-one
connection with a firm through personalized services. Hennig-Thurau et al. (2002), Alejandro
et al. (2011), Abdul-Rahman and Kamarulzaman (2012) and Dorai et al. (2021) stated that
satisfaction, trust and commitment should include constitutional elements of relationship
quality. Huang (2015) argued that trust and commitment should be considered to be two key
dimensions of customer relationship management (CRM) quality that play a central role in
building and maintaining successful relationships. He et al. (2018) examined the quality of
the relationship between tourists’ perceptions and their environmentally responsible
behavior. They divided relationship quality into two dimensions: tourist satisfaction and
environmental commitment. Similarly, people can have relationships with the e-commerce
websites. As such, this study suggested that customers actively react to the relationship
efforts put forth by e-commerce websites. An important construct identified in the
relationship used to help predict behavior is commitment (Davis et al., 2009, 2011).
Moreover, the important factors such as trust have been examined in the e-commerce
context (Srivastava and Chandra, 2018; Cheng et al., 2019; Mao et al., 2020). Therefore, this
study only examines two relationship quality dimensions: satisfaction and commitment.

2.3 Customer loyalty

Loyalty is a deeply held commitment to consistently rebuy a preferred product or to
repatronize a service in the future, resulting in repetitive consumption of the same brand
(Oliver, 1999; Nyadzayo and Khajehzadeh, 2016). Lin and Wang (2006) defined customer
loyalty as a customer’s favorable attitude toward an electronic/mobile vendor that results in
repeat buying behavior . The ability to develop and maintain customer loyalty or create
IJQSS long-term relationships with customers is the essential element by which to determine a
13,2 service firm’s success or failure (Curry and Gao, 2012; Latif et al., 2020).
Customer loyalty is a construct that measures the probability a customer will return and
is ready to engage in partnering activities such as referrals (Bowen and Shoemaker, 2003).
Literature considers the measurement of customer loyalty in two dimensions (Buttle and

Burton, 2002; Cater 
and Cater, 2010). Attitudinal loyalty is the level of the customer’s
304 psychological attachments and attitudinal advocacy vis-à-vis the supplier. It is reflected in
the form of willingness to recommend a service provider to other consumers or the
commitment to re-patronize a preferred service provider (Cheng et al., 2019). Behavioral
loyalty can be understood as the customer’s willingness to repurchase a product and to
continue a relationship with a service provider. It is reflected in the frequency at which a
customer chooses the same product or service compared to the total number of that specific
product or service consumed (Yao et al., 2019). That is, it is a customer’s commitment to
repatronize a retailer’s product or service consistently in the future, such as repeat purchases
from the same brand and providing positive word of mouth.
Relationship quality depends on the interaction between a firm and its customers and is
based on the assumption that users’ loyalty is initially determined by satisfaction and
commitment, which depend on their relationship (Sanchez-Franco et al., 2009; Ali
Abumalloh et al., 2020). Many studies have argued that satisfaction and commitment have a
significant relationship with loyalty (Lin and Wang, 2006; Rauyruen and Miller, 2007; Wang
and Liao, 2007; Lee and Wong, 2016). For example, Choi et al. (2008) agreed that customer
loyalty is directly and indirectly influenced by satisfaction in the m-commerce context. Ali
Abumalloh et al. (2020) stated that satisfaction has a positive effect on loyalty toward the
recommendation agent. Gwinner et al. (1998) argued that trust and commitment are crucial
in building and maintaining long-term relationships and enhancing customer loyalty.
Hennig-Thurau et al. (2002) found that satisfaction and commitment are both drivers of
loyalty. Customers who have high commitment to a product or service will buy more. In
other words, commitment leads to the behavioral dimension of loyalty (Rauyruen and Miller,
2007). Additional work finds that perceptions of commitment can lead to word-of-mouth
communication, an aspect of attitudinal loyalty, and can result in future purchase intentions,
an aspect of behavioral loyalty (Alejandro et al., 2011). Hur et al. (2013) indicated that
commitment is considered a key component in building customer loyalty. Zhang et al. (2016)
indicated that establishing and maintaining good relationships with consumers can
effectively improve customer loyalty. Tajvidi et al. (2020) revealed that the higher of
relationship quality that is established, the more positive the interaction will be with the
customer, which can therefore contribute to fostering brand loyalty. Relationship quality
has been positively linked to customer loyalty (Hennig-Thurau and Klee, 1997; Liu et al.,
2011; Abdul-Rahman and Kamarulzaman, 2012; Cheng et al., 2020). In line with this
reasoning, the following hypothesis is proposed:

H1. Relationship quality has a positive effect on customer loyalty.

2.4 Service recovery

Service recovery is the process by which service providers attempt to correct a service
failure (Kelley et al., 1993; Wang et al., 2011). Service recovery refers to the actions by a
service firm to make up for service failure (a case when a customer experiences an
unsatisfactory service) in an attempt to cause the customers to return to the firm and to be
satisfied (Choi et al., 2014; Bouranta et al., 2019). Chou (2015) defined service recovery as the
actions organizations take in response to a service failure or a process intended to handle
mistakes. During the recovery process, customers usually expect fair treatment when a Impact of the
company is making up for a loss that occurred during a service failure, which is the relationship
foundation of the justice theory (Das et al., 2019). Justice theories explain individual
responses to conflict situations. Because service failure and recovery comprise a conflict
quality
situation, justice theories represent a theoretical foundation for service recovery research
stream (Chang et al., 2012). According to justice theory, consumers assess fairness across
three dimensions: distributive, interactional and procedural justice (Smith et al., 1999; Cheng
et al., 2019). In the context of service failure and recovery, distributive justice refers to the 305
extent to which customers evaluate the fairness of service recovery outcomes. It may include
free meals, discounts, coupons or replacement in restaurant settings. Interactional justice
refers to the degree to which customers evaluate the fairness in a service representatives’
manners in the service recovery process. It includes interpersonal sensitivity, treating people
with dignity and respect, or providing appropriate explanations for the service failure.
Procedural justice refers to the fairness of service recovery procedures and policies. This
form of justice generally includes formal policies and structural considerations related to
service recovery, such as waiting time, responsiveness and flexibility during the recovery
process (McColl-Kennedy and Sparks, 2003).
The ultimate goal of service recovery is to pacify dissatisfied customers through
appropriate actions to reduce potential damage to customer relationships caused by service
failures. Thus, appropriate service recovery is a critical step for transforming dissatisfied
customers into satisfied customers and maintaining positive relationships with them (Cheng
et al., 2008). In other words, the immediate objective of service recovery efforts is to move
customers from a state of dissatisfaction to a state of satisfaction and, more importantly, to
develop strong relationships with customers (Lu et al., 2020). Maxham Iii (2001) investigated
the effects of different levels of service recovery on satisfaction and discovered that
moderate-to-high service recovery efforts significantly increase post-failure levels of
satisfaction. Homburg and Fürst (2005) explored how an organization’s complaint
management affects customer justice evaluations and, in turn, customer satisfaction and
loyalty. They found distributive, procedural and interpersonal justices have positive effects
on customer satisfaction. Ambrose et al. (2007) studied the relationship between justice and
attitudes and found that distributive, procedural and interpersonal forms of justice have
positive effects on overall satisfaction. Chang (2008) showed that when considering online
service recovery, providing choice of recovery options can positively lead to satisfaction
with recovery and overall satisfaction with a service provider. Gautam (2011) indicated that
distributive justice, procedural justice and interactional justice are positively related to
recovery satisfaction. They found the effect of distributive justice on recovery satisfaction to
be stronger than that of interactional justice, and subsequently, the effect of interactional
justice on recovery satisfaction found to be stronger than that of procedural justice.
Lin and Ding (2005) investigated consumers using an internet service provider service in
Taiwan and found that service recovery significantly and positively influences customer
satisfaction and trust. Tax et al. (1998) examined the influence of customers’ justice
evaluations on trust and commitment after a service complaint experience and found that
satisfaction with complaint handling mediates the relationship between justice (distributive,
procedural and interpersonal justice) and relationship quality (trust and commitment). Ha
and Jang (2009) noted that after a service failure has been successfully resolved, customers
may show an even stronger commitment to the firm than if no failure had occurred. Choi
et al. (2014) argued that complaints resolved effectively can restore customer satisfaction,
reinforce positive word-of-mouth advertising, improve customer trust and commitment,
forge customer relationships, increase purchase behavior, decrease acquisition expenses and
IJQSS eventually ensure customer patronage. Rashid et al. (2014) further stated that successful
13,2 service recovery can enhance customer perceptions of the quality of the service, lead to
positive word-of mouth communication, enhance customer satisfaction and build customer
relationships and customer loyalty. If companies cannot completely eliminate an online
service failure, then understanding the process and effectiveness of complaint handling and
service recovery can be of considerable value in improving customer satisfaction and
306 retention. Indeed, good service recovery can help a company turn a potentially negative
situation into a positive one (Gustafsson, 2009). That is, effective recovery not only can
restore customer satisfaction and commitment but also can lead to loyalty (Ding and Lii,
2016; Bouranta et al., 2019; Cheng et al., 2019). In line with this reasoning, the following
hypotheses is proposed:

H2. Service recovery has a significant influence on the relationship between the
relationship quality and customer loyalty.

3. Methodology
3.1 Sampling
To test the above hypotheses empirically, this study used a nonprobability sampling of
purposive sampling using one screening questions (Sedera et al., 2017; Hsieh, 2020). Eligible
participants were believed to be representative of the population of interest and were
expected to allow us to achieve the aims of this study (Churchill, 1999). To ensure that
participants were qualified, respondents were asked to indicate whether they have had
service failure experience with an online service firm. The questionnaire was distributed to
the target respondents via e-mail, or social networks, and the respondents clicked on the
website address, after which they were directed to the Web-based questionnaire. The
questionnaire was sent to the respondents on April 20, 2018, and 196 responses were
returned by May 4, 2018. Of these, 13 were invalid because the respondents had never
experienced any electronic service failures, leaving a total of 183 valid questionnaires.
Table 1 shows the demographic details of the sample, which includes data on the
respondents’ gender, age, occupation, marital status, education level and length of online
buying experience.

3.2 Measures instruments

Established scales from prior literature were used to measure the constructs identified in
Figure 1. With regard to relationship quality, it is defined here as the customers’ perceived
strength of their relationships with the e-commerce website, and the items comprise a global
construct made up of two facets of relationship quality, i.e. satisfaction and commitment (He
et al., 2018). Satisfaction refers to a positive emotional state perceived by customers in the
process and result of recovering a failed service. Commitment is the extent to which there is
an enduring desire to maintain a valued relationship with websites (Fullerton, 2005; Cater 

and Cater, 2010). As for service recovery, it is defined in this study as the actions taken by an
e-commerce website to address customer complaints regarding a perceived service failure
(Ha and Jang, 2009), where the related questionnaire items were further delineated into
distributive, interactional and procedural justice (Smith et al., 1999; Chang et al., 2012; Ding
and Lii, 2016). Distributive justice refers to the extent to which customers evaluate the
fairness of the online service recovery outcomes. Interactional justice refers to the degree to
which customers evaluate fairness in terms of the service representatives’ manners during
and after recovery of online service. Procedural justice refers to the degree of fairness that
 Percentage of respondents
Impact of the
relationship
Gender quality
Male 57.9
Female 42.1
Age
520 years old 7.1
21–30 years old 31.7
307
31–40 years old 21.8
41–50 years old 29.0
=51 years old 10.4
Occupation
Student 25.7
Government sector 26.2
Service industry 22.4
Manufacturing industry 9.3
High-tech industry 8.7
Other 7.7
Marital status
Single 46.4
Married 52.0
Other 1.6
Education level
High school and below 5.5
College 3.3
University 50.8
Master’s degree and above 40.4
Length of online buying experience
Less than 1 year 9.3 Table 1.
1–3 years 27.3 Demographic
4–6 years 21.9 characteristics of the
More than 7 years 41.5 respondents (n = 183)

customers perceive in terms of online service recovery processes and policies. With regard to
customer loyalty, it is defined in this study as the degree to which a customer develops a
favorable attitude toward the electronic vendor that results in repeat buying behavior (Lin
and Wang, 2006). To assess the level of customer loyalty toward the electronic vendor, the
attitudinal and behavioral components of loyalty are adopted for the purposes of this study
(Pritchard et al., 1999; Lin and Wang, 2006), where attitudinal loyalty is the level of a
customer’s psychological attachment and attitudinal advocacy vis-à-vis an electronic vendor.
Behavioral loyalty is a composite measure based on a customer’s purchasing frequency and
the amount of money spent at a store compared with the amount spent at other stores
(Huang, 2015).
For all scales, the respondents were asked to express their agreement with a given
statement using a seven-point, Likert-type scale (1 = “completely disagree”; 7 = “completely
agree”). The draft questionnaire was tested by scholars and experts, and this led to minor
modifications in the wording of some items. After ensuring that all items were clear, the
questionnaire was sent and then collected via e-mail. The final questionnaire items and
related references are presented in the questionnaire items and related references.
IJQSS 
Research variables/itemsRelationship quality (Alejandro, et al., 2011, Cater 
and Cater,
13,2 2010; Fullerton, 2005; He, et al., 2018; Hennig-Thurau, et al., 2002; Nyadzayo and
Khajehzadeh, 2016):
(1) Satisfaction
 SA1. Overall, I am satisfied with the service I received.
 SA2. I am satisfied with the way that the e-commerce website dealt with my problems.
308
 SA3. The e-commerce website response to my problems was better than
expected.
 SA4. I now have a more positive attitude toward the e-commerce website.

(2) Commitment
 CO1. I feel emotionally attached to the e-commerce website.
 CO2. The e-commerce website has a great deal of personal meaning for me.
 CO3. I feel a strong sense of identification with the e-commerce website.
 CO4. Even if I could, I would not leave this e-commerce website.

Service recovery (Chang et al., 2012; Ding and Lii, 2016; Ha and Jang, 2009; Smith et al.,
1999):
(1) Distributive justice
 DJ1. The e-commerce website has fairly compensated me when a problem occurred.
 DJ2. The outcome I received from the e-commerce website in response to the
problem has been adequate.
(2) Interactional justice
 IJ1. I feel the e-commerce website put a lot of positive energy into handling my
problem.
 IJ2. I feel the e-commerce website seemed to care about my problem
appropriately.
(3) Procedural justice
 PJ1. The e-commerce website was willing to satisfy my needs when handling
the complaint.
 PJ2. The e-commerce website solves my problem as fast as possible.
Customer loyalty (Huang, 2015; Lin and Wang, 2006; Pritchard, et al., 1999):
(1) Attitudinal loyalty
 AL1. My preference for this e-commerce website would not willingly change.
 AL2. It would be difficult to change my beliefs about this e-commerce website.
 AL3. Even if close friends recommended another e-commerce website, my
preference for this e commerce website would not change.
(2) Behavioral loyalty
 BL1. I will buy from this e-commerce website the next time I purchase the same
product/service.
 BL2. I intend to keep purchasing the same products/services from this e-
commerce website.
The research constructs were operationalized based on the related studies and a pilot test.
4. Results Impact of the
Partial least squares (PLS) aims to estimate parameters by minimizing the residual relationship
variances of all the dependent variables involved. As compared to covariance-based SEM
techniques, PLS is less stringent with distributional assumptions, measurement scale type
quality
and sample size requirements (Fornell and Cha, 1994; Chin, 1998). The minimal demands on
distributional assumptions and sample size made PLS an appropriate analysis technique for
this study.
309
4.1 Measurement model
Because of the fact that unidimensionality cannot be directly measured with PLS, but can be
assessed using an exploratory factor analysis (EFA), EFA was applied to establish whether
the measurement items converge to the corresponding constructs (factors), whether each
item loads with a high coefficient on only one factor and whether this factor is the same for
all items that are supposed to measure it. Customer loyalty, AL3, was therefore omitted
because of factor loadings that were below 0.7. The measurement model of this study
achieved good unidimensionality (Gefen and Straub, 2005).
This study initially specified a null model for the first-order latent variables, in which no
structural relationships were included. To assess the reliability of the measures, the
Cronbach’s alpha, composite scale reliability (CR) and average variance extracted (AVE)
were calculated. Table 2 shows that the Cronbach’s alpha exceeded 0.70 (Nunnally, 1978);
the CR exceeded 0.80 (Nunnally and Bernstein, 1994) and the AVE of all measures
compellingly exceeded the cut-off value of 0.50 (Chin, 1998). In addition, Table 3 shows that
the square root of the AVE exceeded the intercorrelations of the construct with the other
constructs in the model, in support of discriminant validity (Fornell and Larcker, 1981).
Additional support for discriminant validity comes through inspection of the cross-loadings,
if the loading of each indicator is higher for its designated construct than for any of the other
constructs, and each of the constructs loads highest with its own items, it can be inferred
that the models’ constructs differ sufficiently from one another (Chin, 1998; Urbach and
Ahlemann, 2010). As shown in Tables 2 and 3, the internal consistency reliability, indicator
reliability, convergent validity and discriminant validity were assured for all of our
measurement scales (Urbach and Ahlemann, 2010). In addition, the influence of common

Construct Items Loading CA CR AVE

Relationship quality
Satisfaction SA1 0.814 0.899 0.930 0.768
SA2 0.923
SA3 0.905
SA4 0.861
Commitment CO1 0.916 0.930 0.950 0.826
CO2 0.895
CO3 0.942
CO4 0.881
Customer loyalty
Attitudinal loyalty AL1 0.912 0.769 0.896 0.812 Table 2.
AL2 0.890
Behavioral loyalty BL1 0.936 0.860 0.935 0.877
Psychometric
BL2 0.937 properties in the null
model for the first-
Notes: CA = Cronbach’s alpha; CR = Composite reliability; AVE = Average variance extracted order constructs
IJQSS method variance is believed to be an important issue for this kind of data. The correlation
13,2 matrix (Table 2) does not indicate any highly correlated factors (the highest correlation is
r = 0.840), whereas evidence of common method bias should have resulted in extremely high
correlations (r > 0.900) (Pavlou et al., 2007). Therefore, common method bias is not a major
concern in this study.
In Table 4, this study includes the CR and AVE of the measures in the second-order
310 model; these also show that the CR is greater than 0.80 and that the AVE is greater than 0.5,
which provides evidence of reliable measures. As demonstrated in Table 2, the loadings of
the first-order latent variables on the second-order factors exceed 0.7, which indicates
support for the second-order model comprising relationship quality, service recovery and
customer loyalty.

4.2 Structural model

The structural model is aimed toward examining the relationship among a set of dependent
and independent constructs. A bootstrapping analysis with 5,000 samples and the original
183 cases was performed to examine the significance of the path coefficients.
Figure 2 shows the structural model results, omitting the influence of the interacting
moderator variables. R2 measures the relationship of a latent variable’s explained variance
to its total variance. Values of approximately 0.670 are considered substantial; values of

Relationship quality Customer loyalty

Construct Mean SD Satisfaction Commitment Attitudinal loyalty Behavioral loyalty

Relationship quality
Table 3. Satisfaction 4.947 1.095 0.877
Mean, SD and Commitment 3.889 1.378 0.560 0.909
Customer loyalty
intercorrelations of Attitudinal loyalty 4.221 1.251 0.290 0.477 0.901
the latent variables Behavioral loyalty 4.664 1.244 0.580 0.550 0.438 0.937
for the first-order
constructs Note: Square root of the AVE on the diagonal

Second-order model
Relationship quality Customer loyalty

CR 0.929 CR 0.860
AVE 0.621 AVE 0.607

Satisfaction 0.868*** Attitudinal loyalty 0.816***

Commitment 0.897*** Behavioral loyalty 0.877***
Table 4.
Assessing the Structural model
second-order model Customer loyalty
Relationship quality 0.647***
of relationship R2 0.418
quality, service Q2 (CV redundancy) 0.238
recovery and
customer loyalty Note: ***p < 0.001
around 0.333 are considered average; and values of around 0.190 are considered weak (Chin, Impact of the
1998). Figure 2 shows a moderate-level R2 of 0.418 for customer loyalty. Specifically, the relationship
exogenous variables explained 41.8% of the variation in the customer loyalty construct.
Another criterion for the predictive validity of the model is to apply the Q-square test (also
quality
known as the cross-validated redundancy index) developed by Stone (1974) and Geisser
(1975). To measure Q-square, a blindfolding procedure was performed. A Q-square value
larger than 0 means that the model has predictive relevance (Barroso et al., 2010). As can be
seen from Figure 2, it can be concluded that the proposed model had good predictability.
311
The path coefficient was found to be significant (beta = 0.647, p < 0.001), providing support
for H1. This means that the degree of relationship quality will have a positive effect on
customer loyalty.
Figure 3 shows the results of the structural model with the interaction effect. It presents
the results of the structural model with a moderator variable. Relationship quality had a
positive influence (beta = 0.745, p < 0.001) on customer loyalty. For the moderator
(interacting) variable, a statistically significant beta path coefficient was found. Service
recovery had a positive (beta = 0.252, p < 0.001) interacting effect with relationship quality
on customer loyalty. It is important to note that the strength and direction of the main path
coefficient cannot be adequately interpreted without also considering the influences of
interacting variables. However, as a basis of comparison, the (direct only) model explains
41.8% of the variance in customer loyalty. In contrast, by including the effects of the
interacting variables, a larger proportion of the respective variances in customer loyalty
(R2 = 0.514) is accounted for. Therefore, it could be concluded that the proposed model had
good predictability. The path coefficient was found to be significant (t-values for the path

Satisfaction Attitudinal loyalty

(R 2 = 0.755) 0.868 0.818 (R 2 = 0.666)
(37.465***) (20.170***)

Relationship quality Customer loyalty Figure 2.

(Q2 = 0.606) (R 2 =0.418; Q2 = 0.238)
0.647
Structural model
(13.302***)
0.877
result (without
Commitment 0.897 Behavioral loyalty
(R 2 = 0.804) (62.143***)
(60.304***)
(R 2 = 0.769)
interacting variable)

Interactional
Distributive justice Procedural justice
justice
(R 2 = 0.883) (R 2 = 0.894)
(R 2 = 0.870)

0.933 0.946
0.940 (50.076***) (102.186***)
(101.547***)

Service recovery
(Q2 = 0.799)
Satisfaction Attitudinal loyalty
(R 2 = 0.755) 0.868 0.829 (R 2 = 0.688)
(37.216***) (21.289***)
0.252
(3.386***)
(
Relationship quality Customer loyalty
(Q2 = 0.550) (R 2 =0.514; Q2 = 0.270)
0.745
Figure 3.
(12.283***)
0.866
Structural model
Commitment 0.897 Behavioral loyalty
(R 2 = 0.804) (62.306***)
(49.982***)
(R 2 = 0.749)
result
IJQSS coefficient was statistically significant at the a = 0.05 level), providing support for H2. This
13,2 means that the degree of service recovery has a positive moderating effect on the
relationship between relationship quality and customer loyalty.

5. Discussion
This study was aimed toward contributing to the customer loyalty literature by testing the
312 moderating effect of service recovery on the relationship between relationship quality and
customer loyalty. The empirical findings could advance the current understanding of the
complex links across relationship quality, service recovery and customer loyalty.

5.1 Theoretical implications

The results show that the level of relationship quality has a significantly positive influence
on customer loyalty (beta = 0.647, p < 0.001), and similar findings have been reported in
other studies (Zeithaml et al., 1996; Kim and Benbasat, 2003; Alejandro et al., 2011; Zhang
et al., 2016). This result has implications suggesting that relationship quality is important in
enhancing customer loyalty. Many studies have suggested that there is a negative link
between service failure severity and future customer relationships with that service
provider, as well as suggesting that customer perceptions of losses experienced during
transactions will reduce the duration of the customer relationship (Bejou and Palmer, 1998;
Buttle and Burton, 2002; Weun et al., 2004). Furthermore, if customers have a relatively
weak relationship with a service organization, they will be more likely to change their
behavior after experiencing service failure. On the contrary, once a strong relationship
between service organizations and customers is built, customers do not tend to shift their re-
patronage behavior, even in service failure situations (Ha and Jang, 2009).
The results show that service recovery has a significant influence on the relationship
between relationship quality and customer loyalty. This result has implications suggesting
that service recovery had a positive (beta = 0.252, p < 0.001) interactive effect with
relationship quality on customer loyalty. Similar findings have been reported in other
studies (Nikibin et al., 2010; Chou, 2015; Bougoure et al., 2016). Bougoure et al. (2016)
explained that if firms can handle service failures and complaints well, they can strengthen
the relationship between brands and consumers because service failure and complaint
management represent critical moments of truth in the relationship between brands and
consumers and offer opportunities for firms to communicate with customers. This research
thus suggests that effective service recovery not only corrects service failures but also
enhances customers’ perceptions of service quality, leads to positive word-of mouth
communication, builds and maintains strong relationships and ultimately leads to customer
satisfaction and loyalty (Chou, 2015; Bouranta et al., 2019). Therefore, e-commerce venders
should address service failures and develop service recovery policies to resolve customers’
inquiries and complaints and recover their satisfaction (Cheng et al., 2008).

5.2 Practical implications

According to the structural model results (without interacting variable), the level of
relationship quality has a significantly positive influence on customer loyalty (Figure 2.).
This result has implications suggesting that retaining customers has become an issue for
online retailers because it is more expensive for them to attract new customers as compared
to the brick-and-mortar stores (Luarn and Lin, 2003). It is thus suggested that e-commerce
venders should establish and maintain good relationships with consumers to effectively
improve customer loyalty (Ali Abumalloh et al., 2020). To establish and maintain good
relationships with consumers, e-commerce retailers should focus on increasing customer
satisfaction and commitment. Satisfaction is a customer’s overall or global judgment Impact of the
regarding the extent to which product or service performance matches expectations, and it is relationship
crucial to the survival of any business organization (Rashid et al., 2014; Pekovic and Rolland,
2020). Customer commitment is considered to be a key element in long term relationships
quality
(Morgan and Hunt, 1994; Kwon and Jang, 2012), and it is one of the main driving forces to
customer retention and commitment specifically related to future intention (Garbarino and
Johnson, 1999; Gustafsson et al., 2005; Yao et al., 2019). Therefore, it is suggested here that e-
commerce retailers should implement good CRM intended to build, develop and maintain 313
successful customer relationships overtime (Berry, 1995) through targeting the right
customer with the right product or service through the right channel at the right time (Swift,
2001). Furthermore, e-commerce retailers can manage the entire relationship between a firm
and its customers, with all its various contacts, interactive processes and communication
elements (Nyadzayo and Khajehzadeh, 2016), and they can offer solutions to customer
problems that have been designed into the service-delivery system rather than relying on
their relationship-building skills (Berry, 1995).
According to the structural model results, the level of service recovery has a significant
influence on the relationship between relationship quality and customer loyalty (Figure 3).
This result has implications suggesting that whenever an e-commerce website is incapable
of offering the necessary technological capabilities essential for consumers to accomplish
their transactional activities, the majority of consumers can readily switch among e-
commerce websites with the mere click of a mouse button. An in-depth appreciation of e-
commerce service failures is therefore necessary to stem the tide of customer loss (Tan et al.,
2016). Even if organizations cannot completely eliminate service failures, they can
implement service recovery efforts and effectively handle these failures in such a way as to
increase customers’ trust and possibly even enhance customer satisfaction and loyalty in the
future (Steyn et al., 2011; Lu et al., 2020). Moreover, some consumers are likely to complain
through online mechanics because of the ease of use and efficiency; at the same time, they
can avoid the embarrassment of in-person complaints. As a result, online service providers
may have more opportunities to resolve service failures and increase recovery satisfaction
(Sousa and Voss, 2009). Consequently, successful implementation of service recovery can
lead to a host of benefits, including reinforced positive word-of-mouth advertising and
increased purchasing (Kim et al., 2009; Choi et al., 2014). e-Commerce venders must develop
clear service failure and recovery procedures that are effectively communicated and shared
with all staff, particularly front line staff, given they are the face of the service and directly
interact with customers and therefore influence the both customer relationships and
customer loyalty (Bougoure et al., 2016).

6. Conclusion and future research directions

Because of the fact that customer loyalty is very important as it strongly impacts the profits
and long-term growth of a company (Curry and Gao, 2012), the objective of this study was
thus to assess the impact of relationship quality on customer loyalty by considering service
recovery. The results show that relationship quality is the major factor enhancing customer
loyalty and that service recovery has a significantly moderating effect on the relationship
between relationship quality and customer loyalty.
There are two main limitations of this study, as follows. First, while this research applied
a purposive sampling method and obtained an adequate number of respondents, the results
may include some bias. Therefore, it is suggested that future research should apply a
random sampling method to collect more responses and increase the generalizability of the
findings. Second, this study was used to investigate the relationships among relationship
IJQSS quality, service recovery and customer loyalty in a Chinese cultural context, subject to a
13,2 specific set of societal, cultural and linguistic attitudes and behaviors. Therefore, future
research could extend this study to other regions of the world.

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Further reading
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recovery satisfaction on consumer intentions to repurchase on the internet”, Internet Research,
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About the author

Shu-Mei Tseng is a Professor in the Department of Hospitality Management at I-Shou University,
Taiwan. She received her PhD in the Department of Industrial and Information Management at
National Cheng Kung University, Taiwan. Her works have been published in International Journal of
Production Economics, Journal of Knowledge Management, International Journal of Information
Management, Expert Systems with Applications, Journal of Enterprise Information Management,
Industrial Management and Data Systems, International Journal of Quality and Service Sciences,
Journal of Retailing and Consumer Services and Management Research News. Her current research
interests include knowledge management, supply chain management, information technology
management, customer relationship management and service quality. Shu-Mei Tseng can be
contacted at: y97576@isu.edu.tw

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