Complaints and recovery strategies : how to maintain a customer relationship and recommendation? The Case of Icelandair

Abstract

The vast airline industry is particularly exposed to customer complaints. Especially when facing unavoidable adverse impact from the environment along with customers experience and service failures, measured as cause of complaint. The benefits of airlines maintaining a positive relationship with customers have been brought to light. Nevertheless, the literature on customer relationship has, to more extent, focused on service failures rather than customer complaints based on experience. Therefore, this paper explores complaints and their main causes by applying the Theory of the Marketing Firm in four studies, to investigate the consumer-firm bilateral contingency and how customer complaints affect recommendations, measured as Net Promoter Score (NPS). The first study examined Icelandair's consumers attitude where the results showed complaining customers (compared to non-complaining customers) are significantly less willing to maintain a customer relationship and by a larger effect recommend the airline. The second study revealed 6% of customer comments were considered complaints on the airline’s Facebook page. In addition, by applying netnography it provided variation, types and examples. The third study consisted of interviews with eight complaining customers to gain a deeper understanding of the cause of the complaint and their insights towards their relationship to the airline. Finally, the fourth study used a choice-based conjoint analysis to understand the real share of preference on consumer-firm relationship, when exposed to common cause of complaints. The findings reveal problems due to customer service complaints and the importance of baggage problems in terms of customers‘ preference on maintaining a relationship with the airline. These results, among further insights can be used by airlines to understand what actions to take for increasing recommendations, what are the most common causes of complaints in general and their importance on customer relationship.Keywords: Theory of the Marketing Firm, Customer Complaints, Customer Relationship, Net Promoter Score, Bilateral Contingency