The Impact of Perceived Justice and Customer Trust on Customer Loyalty

Abstract

The purpose of this study is to investigate the relationship between the customer-perceived justice in service recovery, customer trust, and customer loyalty. Data was collected through a survey of 290 bank customers in India who had experienced at least two failed services. Covariance-based structural equation modeling was used to examine the collected data. The results revealed that distributive, procedural, and interactional justice all had a positive effect on customer loyalty. Customer trust partially mediated the relationship between interactional justice and customer loyalty, and it fully mediated the relationship between distributive justice and customer loyalty, as well as the relationship between procedural justice and customer loyalty. The indirect effect of perceived justice in service recovery through customer trust was a more potent predictor of customer loyalty than the direct effect of service recovery on customer loyalty. As a result, long-term relationships can be formed if trust is built between customers and service providers.