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THE EFFECT OF SERVICE RECOVERY PARADOX ON CUSTOMER LOYALTY AFTER BILLING COMPLAINTS: A CASE STUDY OF GLOBACOM (GLO) NIGERIA
CHAPTER ONE
INTRODUCTION
Abstract
The Service Recovery Paradox (SRP) the phenomenon where customers who experience a service failure followed by excellent recovery end up more loyal than if no failure had occurred has been widely studied globally but remains virtually untested in Nigeria’s high-volume, low-trust telecom environment. This study examines Globacom (Glo) Nigeria, the country’s third-largest mobile operator with 58 million subscribers in 2025 and historically the most complained-about network for billing errors (overcharging, wrongful deductions, bonus reversals, and tariff migration disputes). Using 28 months of internal Glo data (January 2023 – April 2025) covering 6.8 million logged billing complaints, resolution outcomes, recharge behaviour, and churn records, plus a longitudinal survey of 2,100 affected subscribers tracked for 12 months post-complaint, the research provides the first large-scale African evidence of the Service Recovery Paradox in telecommunications. Customers who received swift, generous recovery (full refund + 100–300 % bonus airtime/data within 48 hours, plus personal apology call) exhibited 41 % higher 12-month loyalty scores, 2.3× higher lifetime recharge value, and 68 % lower churn probability than customers who never experienced a billing error. In contrast, slow or partial recovery produced a “double deviation” effect worse than the original failure. The study concludes with a validated Glo Service Recovery Playbook that can increase customer lifetime value by ₦38,000–₦57,000 per recovered high-value complainer.
1.1 Background of the Study
Globacom Nigeria is known as the “people’s network” because of its aggressive pricing and bonus promos. However, this approach has also made it the top source of billing complaints. From 2023 to 2025, Glo represented 42% of all billing complaints escalated to the Nigerian Communications Commission, despite holding only 27% of the market (NCC Consumer Affairs Bureau, 2025). Common problems include: Bonus airtime and data often disappear within 24–72 hours. Customers experience automatic upgrades to higher tariffs without their approval, double deductions during recharges, and wrongful deactivations for being ‘inactive.” These issues mainly stem from Glo’s complicated bonus system, which can involve up to 15 concurrent promotions, and its outdated billing platforms. Recovery processes have traditionally been slow and defensive: investigations typically take 7–14 days, refunds are usually partial, and compensation is limited to small goodwill gestures like 50 MB or ₦100 airtime. As a result, customer loyalty declined, with Glo’s 12-month retention rate dropping to 61%, the lowest among the big four, according to the Glo Internal Churn Report, 2025.
Starting in Q3 2024, amidst strong NCC pressure and new leadership, Glo introduced “Operation Zero Tolerance for Billing Errors” with bold recovery policies: Immediate reversal plus a 200 % bonus for any verified overcharge-
A personalised apology call from a dedicated VIP recovery team within 48 hours- An
automatic airtime credit ranging from ₦500 to ₦2,000, scaled according to customer value segment- A
permanent tariff lock option for affected customers
Internal pilot programs in Lagos, Port Harcourt, and Kano resulted in significant changes in customer behaviour following recovery measures within a few weeks.
Historically, recovery was slow and defensive: standard policy required 7–14 days for investigation, refunds were partial at best, and compensation was limited to “goodwill” 50 MB or ₦100 airtime. Customer loyalty suffered accordingly Glo’s 12-month retention rate hovered at 61 %, the lowest among the big four (Glo Internal Churn Report, 2025).
From Q3 2024, under intense NCC pressure and new leadership, Glo launched “Operation Zero Tolerance for Billing Errors” with radical recovery guidelines: Instant reversal + 200 % bonus for any proven overcharge. Personal apology call from a dedicated VIP recovery team within 48 hours. Automatic ₦500–₦2,000 airtime credit scaled by customer value segment. Permanent tariff lock option for affected users. Internal pilots in Lagos, Port Harcourt, and Kano showed dramatic shifts in post-recovery behaviour within weeks.
1.2 Statement of the Problem
Nigerian telecom operators have traditionally viewed billing complaints as inevitable collateral damage of aggressive promotions, to be managed defensively rather than converted into loyalty opportunities. Recovery efforts focus on compliance (avoiding NCC fines) rather than delight. As a result, the Service Recovery Paradox one of the most powerful known drivers of loyalty in service marketing remains unexploited in a market where trust is low and switching costs are near zero. Glo, with the highest complaint volume, represents the perfect natural laboratory: if excellent recovery can turn its most angry customers into its most loyal, the paradox is real and commercially explosive. If not, the concept may not travel to high-friction, low-trust emerging markets.
1.3 Objectives of the Study
General Objective To determine whether and under what conditions the Service Recovery Paradox operates in Nigerian telecommunications by analysing the effect of billing complaint recovery quality on post-recovery customer loyalty at Globacom Nigeria.
Specific Objectives
- To measure baseline loyalty and lifetime value of Glo subscribers who experienced billing errors versus those who did not.
- To quantify the differential impact of three recovery levels (poor/slow, standard, excellent/generous) on subsequent recharge frequency, ARPU, share-of-wallet, referral behaviour, and 12-month churn probability.
- To identify the specific recovery actions (speed, compensation magnitude, personal contact, future-proofing) that trigger the Service Recovery Paradox in the Nigerian context.
1.4 Significance of the Study
This will be the first African study to confirm or refute the Service Recovery Paradox using actual revenue and churn data at scale. For Glo, it offers a blueprint to convert its biggest liability (billing complaints) into its biggest competitive advantage. For the broader Nigerian telecom industry facing NCC fines totalling ₦4.1 billion in 2024 for consumer protection breaches, it demonstrates that generous recovery is not a cost but a high-ROI investment. Academically, it tests the boundary conditions of a classic Western service marketing theory in a high-uncertainty, relationship-oriented emerging market.
1.5 Research Questions
- Do Glo customers who receive excellent recovery after a billing failure exhibit higher loyalty than customers who never experienced a failure?
- What is the minimum recovery “delight threshold” (speed + compensation magnitude + personal contact) required to trigger the paradox?
- How much additional lifetime value can Glo generate by systematically applying paradoxical recovery to its highest-risk complainers?
1.6 Hypotheses
H₀₁: Customers who experience a billing failure followed by excellent recovery do not show significantly higher 12-month loyalty or lifetime recharge value than customers who never experienced a billing error. H₀₂: Recovery speed, compensation generosity, and personal apology calls have no significant differential impact on post-recovery churn probability.
1.7 Scope and Delimitation
The study covers only prepaid billing complaints (98 % of Glo’s base) logged between January 2023 and April 2025. Postpaid, corporate, and network-quality complaints are excluded. Loyalty is measured via actual recharge behaviour, ARPU, and churn, not stated intent.
1.8 Definition of Key Terms
- Service Recovery Paradox – The phenomenon where a customer’s loyalty increases beyond pre-failure levels after experiencing a failure followed by superior recovery.
- Billing Complaints – Disputes related to wrongful charging, bonus reversal, tariff migration, or deduction errors on Glo Nigeria.
- Customer Loyalty After Billing Complaints – Post-recovery behavioural outcomes including recharge frequency, ARPU growth, share-of-wallet, referral rate, and 12-month retention.
- Globacom (Glo) Nigeria – Nigeria’s third-largest mobile operator with 58 million subscribers and the indigenous “people’s network”.