Service Failure and Recovery

Service Failures

Even with the best  service organizations, failures can just happen – they may be due to the service not available when promised, it may be delivered late or too slowly (some times too fast??), the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. All these types of service failures bring about negative experiences. If left unfixed they can result in customers leaving, telling others about the negative experiences or even challenging through consumer courts. Research has shown that resolving the problems effectively has a strong impact on the customer satisfaction, loyalty, and bottom-line performance. Customers who experience service failures, but are ultimately satisfied based on recovery efforts by the firm, will be more loyal.

The Recovery Paradox.

It is suggested that customers who are dissatisfied, but experience a high level of excellent service recovery, may be more satisfied and more likely to repurchase than are those who are satisfied at the first place. For example, a hotel customer who arrives & finds there is no room available. In an effort to recover, the front-desk person immediately upgrades this guest to a better room at the same price. The customer is so thrilled with this compensation that he is extremely satisfied with this experience, is even more impressed with the hotel than he was never before, and vows to be loyal into future. The logical, but not very rational, conclusion is that  companies should plan to disappoint customers so they can recover &gain even greater loyalty from them as a result. This idea is known to be as Recovery Paradox. The recovery paradox is more complex than it seem. First of all it is expensive to fix mistakes and would appear ridiculous to encourage service failure-as reliability is the most important aspect of service quality. According to a research it is observed that a customer weight their recent experiences heavily in their decision to buy again. If the experience is negative, overall feelings about the company will decrease and repurchase intentions will also reduce. If the recovery effort is absolutely superlative then the negative impression can be overcome.

There is a recent study which shows no support to recovery paradox. It shows the overall satisfaction was consistently lower for those customers who had experienced a service failure than for those who had experienced no failure, no matter what the recovery effort is. The explanation for why no recovery paradox is suggested by the magnitude of the service failure in this study it is-a three hour airplane flight delay. This type of failure may be too much to be overcome by any recovery effort. Considering mixed opinions on if recovery paradox exists it is safe to say “doing it right the first time” is the best and safest strategy. When a failure does occur then every effort at superior recovery should be made. In cases where the failure can be fully overcome the failure is less critical, or the recovery effort is clearly superlative, it may be possible to observe evidence of the recovery paradox.

How Customers Respond to Service Failure

If customers initiate action following service failure, the action can be various types. A dissatisfied customer can choose complaint on the spot to the service provider, giving the company the opportunity to respond immediately. This is often the best-case scenario for the company it has the second chance right at that movement to satisfy the customer, keep his or her business in the future, and potentially avoids any negative word of mouth.

Some customer chooses not to complaint directly to the provider but rather spread negative word of the mouth about the company to friend, relatives, and coworkers. This negative word of mouth can be extremely detrimental because it can reinforce the customer’s feeling of negativism and spread that negative impression to other as well. Further, the company has no chance to recover unless the negative word of mouth is accompanied by a complaint directly to the company.

When there is a failure, customer can respond in a variety of ways. It is assumed that following are the failure, dissatisfaction at some levels will occur for the customer. In fact, research suggest that variety of negative emotion can occur following service failure, including such feeling as anger, discontent, disappointment, self-pity and anxiety. Many customers are very passive about their dissatisfaction, simply saying or doing nothing, take action or not, at some point the customer will decide weather to stay with that provider or switch to a competitor.

Service Recovery Strategy

When the company fails to stand for its promises made to the customer on the basis they build expectation, it’s to be said that there is service failure. When the service failure occurs, there can be again severe ramification. Customer is considered to be the bread and butter, hence retaining them is the biggest challenge, and however service failure acts as an obstacle to it. In such failures,

  • The customer wants what they were promised.
  • Customer wants personal attention
  • Customer wants a decent apology
  • Customers want that they should not be made to feel that they are the cause of the problem. (Though in many cases they are responsible for nuisance)

There are again five steps involved in order to deal with service failure. They are mentioned as below

  1. Acknowledgement and apology for the fact.
  2. Listening to the customers.
  3. Avoid defending the company and offer a rational explanation.
  4. Offer some extra benefits
  5. Have a proper follow up and make sure no mistakes this time, so that he can easily forget about the service failure and is retained.

A customer expects three shorts of fairness in case of service recovery. They are mentioned as below.

  1. Interaction fairness: when there is service failure, first the company is supposed to acknowledge the customer. Due to this the customer might dissatisfied, but he still expects fairness and courtesy in the language and tone used by the addresser.
  2. Procedure fairness: to know in detail about the incidence of service failure or to avail the compensation. There should be simplicity in procedure, which is involved. Service failure and complexity in procedure both together might result in a disaster as far as customer is concern.
  3. Outcome fairness: now when the company realizes that there is service failure they should end up compensating, arranging for some alternative mode of transporting or complies with the customer condition. The outcome should be taken by considering the customer, his needs and the company’s policy.

Credit: Services Marketing-MGU KTM

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