HOW SUPPLIERS OF HI-TECH AND CRITICAL EQUIPMENT KEEP THEIR CUSTOMERS SATISFY AND LOYAL BY UTILIZING SERVICE INNOVATION AND SERVICE RECOVERY?: STUDY OF SERVICE FOR INDUSTRIAL CONTROL SYSTEMS (ICS) USERS IN INDONESIA.

Abstract

Purpose: The purpose of this research is how the suppliers implement the long-term marketing strategies for ICS (Industrial Control System) users where do not have a Service Contract with suppliers.

Background:  In case of emergencies, ICS users still rely on suppliers for technical assistance. Sometimes technical assistance doesn't meet to the expectations of ICS users. A customer’s buying behavior is influenced by their experiences and psychological factors.  If customers have a negative customer experience, they will share this experience with friends, other company and connections which effects on Satisfaction and even Loyalty. The negative impressions that users have received will affect the buying process as well as buying decision for future. This study is proposed from the interaction of Service Recovery and Service Innovation and examines Customer Satisfaction and Loyalty. It also examines the effect of Customer Satisfaction on Loyalty.

Design/Methodology/Approach: This study uses quantitative method with saturated sampling and involved 88   who did not have a service contract. It was not easy to get a response from those maintenance managers (unit of analysis) who took 3 months to collect a sample of data. The assistance from suppliers was also very helpful in accelerating and collecting the questionnaires. The data were analyzed using SPSS and WarpPLS /SEM.

Finding: Furthermore, Service Recovery and Service Innovation positively influencing the Customer Satisfaction. In addition, Customer Satisfaction plays a mediating role in the relationship between Service recovery and Service Innovation    to Customer loyalty.

Practical Implications: The results highlight that ICS suppliers should implement Service Recovery quickly and with an empathetic manner to satisfy Customers and to encourage Customer's Loyalty. This is one of a new study on the ICS business provided by a supplier in Indonesia. It also reinforces the important of Service Recovery for other suppliers whom supply equipment and services of hi-tech and critical equipment.

Originality/Value: By considering that research in B2B is very rarely carried out by other researchers, especially in Indonesia, it is time to encourage other researchers to look at researching the phenomenon that has occurred in Indonesia where many stated-owned company in energy sectors do not have contracts in order to protect production facilities. This study also is relevant issues for the competitiveness of suppliers, willing to increase their performance, especially for Indonesia local supplier which have implemented concept of Customer Satisfaction and Loyalty together.