| In addition to economic contract, there is also psychological contract between enterprises and customers. The psychological contract is a series of un-spoken expectations. Service failure usually happens when service is unable to meet the customer expectation. The cognition customers hold that companies don’t complete their due obligations would lead to psychological contract violation.Since service failure is inevitable as well as the diversity and changeability of consumer psychological contract, keeping customer loyalty is becoming more and more challenging for enterprises. In the circumstance of service failure, if effective service recovery measures can help maintain customer loyalty, and avoid customer exiting contract relationship, becomes a subject that is worth studying. Therefore, this paper studies the effects of customer’s PCV on customer loyalty, and examining the moderation effect of service recovery, so that the enterprise can pay full attention to customer’s psychological contract.Through the review of related theory, this paper makes clear explanation for psychological contract, psychological contract violation, service recovery and customer loyalty, and further clarify the two dimensions of psychological contract, which are transactional psychological contract and relational psychological contract; the three processes of service recovery, which are the beforehand prevention process, the response process, and the afterwards feedback process; the two dimensions of customer loyalty, which is attitudinal loyalty and behavioral loyalty.The hotel industry is taken as research object, though questionnaires and SPSS, correlation analysis and hierarchical regression analysis is used to examine the assumption of empirical model.The empirical results show that there is significant negative relationship between PCV and customer loyalty. The service recovery has no moderation effect on the relationship between transactional PCV and behavioral loyalty; the beforehand prevention process and afterwards feedback process of service recovery has significant moderation effect on the relationship between transactional PCV and attitudinal loyalty, while the response process doesn’t; the beforehand prevention process, compensation and apology behavior have significant moderation effect on the relationship between relational PCV and customer loyalty, while response speed and afterwards feedback process doesn’t;Therefore, good service recovery does have certain moderation effect on the relationship between the customer PCV and customers loyal. And in order to keep customer loyalty when service failure happens, enterprises should pay more attention on the service recovery. |
