Perceived Justice and Customer Loyalty in the Situation of Beauty Service Failure

Abstract

The hair salons industry has seen many players coming into the market due to low entry barriers and thus it is getting harder to attract new customers in a highly competitive market. As a result, operators are competing more on delivering better services. Like other service businesses, hair salons understand the importance of maintaining high-quality customer service. Since it is nearly impossible to cater to all customer needs as they prefer, handling service failures effectively is considered to be vital. This study aims to examine the processes in which perceived justice of service recovery influences recovery satisfaction and thus this leads to customer loyalty. To achieve this purpose, an online survey was administered to 434 people who reside in the greater Seoul metropolitan area, South Korea, and have visited hair salons for hair care services. The results indicated that customers’ perceived service recovery justice affects satisfaction and finally contributes to customer loyalty, which reconfirms the finding of prior studies that appropriate compensation and the customer-service provider-relationship positively influence customers’ recovery satisfaction. This study also provides hair care service providers with directions on how to restore customers’ recovery justice following service failures.