Research Paper
Year: 2021 | Month: January | Volume: 8 | Issue: 1 | Pages: 693-705
The Influence of Service Failure and Service Recovery towards Customer Loyalty of Firstmedia Service Users with Customer Trust as an Intervening Variable
Suci Pertiwi1, Arlina Nurbaity Lubis2, Yeni Absah3
1Postgraduate Students Department of Management,
Faculty of Economics and Business at University of Sumatera Utara, Indonesia.
2, 3Postgraduate Lecturer Department of Management,
Faculty of Economics and Business at University of Sumatera Utara, Indonesia.
Corresponding Author: Suci Pertiwi
ABSTRACT
In the current era of globalization, the internet is not only a secondary need for people in Indonesia, the internet network can simplify work and for entertainment. In Indonesia, there is an increase in the number of internet users, especially with the implementation of work from home from the government as a preventive measure for the spread of the Covid-19 outbreak. This of course creates quite high competition among internet service provider companies. Companies are required to continue to provide the best service and increase trust so that customers will be loyal later. It is known that customers will become loyal when they have compared expectations with what actually happened through service recovery for service failures offered so as to build consumer confidence in the company later. The purpose of this study was to analyze the effect of service failure and service recovery on customer loyalty of Firstmedia service users with customer trust as an intervening variable. This type of research is an associative study and the population in this study are customers of Firstmedia users in Medan City who have subscribed within the last 1 year, namely as many as 1382 respondents then determining the sample size using the Slovin formula with a sample size of 310 respondents. The sampling method used was purposive sampling. Data analysis was performed through PLS-SEM using the SmartPLS program. The results showed that service failure directly had a negative and significant effect on customer trust, service recovery and customer trust had a positive and significant effect on customer loyalty. Then, indirectly, service failure has a negative and significant effect on customer loyalty through customer trust and service recovery has a positive and significant effect on customer loyalty through customer trust.
Keywords: Service Failure, Service Recovery, Customer Loyalty, Customer Trust.
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