LESSON 1: INTRODUCTION TO SERVICE FAILURE

A service failure, simply defined, is service performance that fails to meet a customer's
expectations. Typically, when a service failure occurs, a customer will expect to be
compensated for the inconvenience in the form of any combination of refunds, credits,
discounts or apologies. The success of such recovery efforts is determined by the individual
customer's expectations and perceptions of the organization. Two key elements impact any
effort to restore customer satisfaction: the strength of the customer relationship and the
severity of the service failure.
MANAGING SERVICE FAILURE THROUGH RECOVERY
The tourism and hospitality industry offer a range of services, including accommodation,
food and beverage, transport, tours, and attractions. Like all service industries, the services
provided within the tourism and hospitality sector have several things in common, which
distinguish them from the products offered by manufacturing and other commercial sectors.
For example, services are relatively intangible, and they are characterized by simultaneous
production and consumption. Thus, it is difficult to observe tourism and hospitality services in
advance and even harder to "try before you buy.”. The provision of services is often immediate
and spontaneous. Successful service provision requires a matching of expectations and
behaviors, a task that is difficult to achieve under conditions of time pressure and customer
variability. For all of these reasons, achieving zero defects is quite difficult and, inevitably,
service failures sometimes occur.
LESSON 2: 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 seems. 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.
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 co-workers. This
negative word of mouth can be extremely detrimental because it can reinforce 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 well 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,

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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 whether to stay with that provider or switch to a
competitor.
LESSON 3: 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:

 Acknowledgement and apology for the fact.

 Listening to the customers.
 Avoid defending the company and offer a rational explanation.
 Offer some extra benefits
 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.
 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.
 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.
 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.
LESSON 4: TYPES AND MOST COMMON MISTAKE IN DEALING WITH SERVICE FAILURE
TYPES OF SERVICE FAILURES IN THE HOSPITALITY INDUSTRY
Knowledge about the types of service failures is necessary to understand service failure
contexts and to develop systems for service failures and recovery. A basic classification of
service failures is outcome and process failures. An outcome failure takes place when the basic
or core service is not performed or delivered. An outcome failure results in customers incurring
economic/financial losses in terms of money, time, etc.
According to Ford, service failures can be further classified into four categories:
A. Service product failures;
B. Failures to meet explicit or implicit customer requests;
C. Failures caused by employees’ action or inaction; and

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 D. Failures caused by other customers, random events or circumstances beyond the
control of the organization.

A. Service product failures

These include any failure in the core service products (e.g. cold or poorly prepared food,
unavailable hotel room or broken attraction), service settings (e.g. dirty or smelly rooms, no
directional signs or overly worn carpets) and service systems (e.g. out-of-stock items,
inoperative credit card machines disorganized servers). Unavailable service can be quite
frustrating, but slow service can also disappoint a customer and ruin the customer experience,
especially at times when that customer is in a hurry because his/her schedule is tight. To that
customer, time is money and delays are a strong ‘deal-breaker'.
B. Failure to meet explicit or implicit customer requests
These include inability to provide what customers ask for, such as special requests on menu
items, a non-smoker being put in a smoking room or not honoring a reservation.
Special needs and preferences cannot be ignored. For example, if a customer has clearly stated
that he/she prefers fluffy pillows, then it would be a disappointment to return tired and
exhausted after a long day to his/her guestroom to lie on a flat and hard pillow. Customer
errors also belong to this category and should not be overlooked -there are occasions when the
customers themselves are to blame.
C. Failures caused by employee actions and inactions
These include both intentional and unintentional acts, such as showing rudeness or a bad
attitude or not presenting a meal or bill in a timely manner. Other examples include the level of
attention, unusual action, cultural norms and adverse conditions.
D. Failures caused by other customers, random events or circumstances beyond the
control of the organization
Tourism and hospitality businesses are often faced with the problem of disruptive behavior by
other customers. Customers arguing loudly, fighting or misbehaving others in a guestroom or at
a table are characteristic examples of such a service failure. Another common example,
especially in hotel settings, is guests walking around the hotel property yelling, laughing loudly
and creating a lot of noise late at night while most guests are asleep, waking them up.
Disruptive behavior also includes drunkenness, verbal and physical abuse, breaking company
policies and rules, and uncooperative guests. It can become a huge challenge because this
behavior sets a bad example for other guests to follow; a situation can easily get out of hand
because what started one isolated incident can quickly turn into a big group of guests
misbehaving and making it much harder for hotel management and staff to control.
Other types of service failures
In addition to the types of service failures explained above, types of failures can be extended to
provide deeper insight. Hoffman study on the restaurant industry revealed further, more
detailed types of service failures. Under the category service delivery system failures, they list
five different types.

 Product defect failures involving incidents with fod described as cold, soggy raw, burnt
or spoilt, and incidents in which inanimate objects were found in the customer's food,
such as hair, glass, adhesive bandages, bag ties and cardboard.
 Slow/unavailable service failures involving situations in which customers waited an
excessive amount of time for service or were not able to find assistance when they
needed it.
 Failures deriving from facility problems concerning cleanliness issues such as bad smells,
dirty eating utensils and animate objects found in food or crawling across the table (e.g.
insects).

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  Failures relating to unclear policies that were not clearly stated by the restaurant or its
representatives and as a result were perceived by the customers as unfair, e.g.
restaurants that would not accept cheques or certain credit cards.
 Failures relating to out-of-stock conditions such as inadequate supply of items. Under
the category 'implicit/explicit customer requests', there are two different types:
 Food not cooked to order. These failures occur when the customer explicitly asks
for the food to be prepared in a specific manner (e.g. medium-rare, no mustard)
and the request is not honored on delivery.
 Failures related to seating problems such as seating smokers in non-smoking.
sections and vice versa, lost or disregarded reservations, denied requests f
special tables and unruly customers.
MOST COMMON MISTAKES WHEN DEALING WITH SERVICE FAILURES
There are several common mistakes that hospitality businesses make when dealing with service
failures.
1. Not listening to customers concerns
Wise hospitality businesses not only listen carefully to their customers complaints and feedback
but also have several methods in place to seek and collect that information because it will help
them improve. It is likely that many other customers have faced the same issue but they didn't
report it.
2. Not taking customer concerns or complaints seriously
Some tourism and hospitality businesses may take the time to listen to a customer complaint,
but think that it is not important or serious enough to deal with. As a result, they may treat that
customer without any empathy or respect, which will only make matters worse. Each and every
customer's issue (whether big or small, seemingly odd or unbelievable) should be investigated
and addressed immediately. It may be something minor or the key to preventing a major
disaster for the company. However, businesses will never know unless they take the time to
actually look into it.
3. Doing nothing about service failures
The complaint or concern will come to their desk, but they will just archive it, give it a
reference number and put it in a folder in the bottom drawer indeed, this is probably the least
effective or appropriate way to deal with a customer complaint. The worst thing a company can
do is send out a form letter or e-mail that shows no empathy to the customer's problem or not
respond at all.
4. Not realizing the urgency of resolving a complaint or service failure as quickly as
possible
Tourism and hospitality businesses need to understand that they not only have to resolve
customer complaints, but also do so quickly. Resolving customer complaints quickly is a critical
component of customer retention and can really work to their advantage. Successfully resolving
customer complaints can boost profits by increasing loyalty.