UNIT 5:

Co-creation of Quality Service and

Service Failures and Service Recovery

MARJOE KARL T. ANACAN

Discussant
Topic Outline
1. Customer’s Role in Value Co-creation

2. Self-service Technology

3. Types of Service Failures

Learning Outces
1. Understand the role of customers in service
delivery and co-creation of service
experiences.

2. Differentiate and learn the concept of self-

service technology and customer
participation in the delivery of service.

3. Knowing the importance of recovery

arising from service failures.
PLEASE TAKE A MOMENT TO PONDER THE FOLLOWING SCENARIO:
Iloilo City, known for its UNESCO Creative City of
Gastronomy designation, attracts tourists from around the
world who come to savor its diverse and authentic culinary
experiences. Visitors expect a harmonious blend of culture
and cuisine, and the city's hospitality establishments play a
crucial role in upholding this reputation. However, a recent
incident has raised concerns among both tourists and locals.

In a well-established, high-end restaurant in Iloilo City, a

foreign tourist ordered a popular local dish, 'La Paz Batchoy,'
renowned for its rich broth and unique flavors. The dish
arrived, but to the customer's surprise, it lacked the
authenticity and quality expected. The broth was bland, the
noodles overcooked, and the presentation lacked finesse. To
make matters worse, the server was unaware of the dish's
cultural significance, and the tourist had to explain its history
and ingredients.
PLEASE TAKE A MOMENT TO PONDER THE FOLLOWING SCENARIO:
The tourist shared this experience on social media, which
quickly garnered attention, leading to discussions about the
decline in the quality of service and authenticity of Iloilo's
culinary offerings in some hospitality establishments.

As students aspiring to work in the hospitality industry, this

situation raises a thought-provoking question:

How can Iloilo City's hospitality establishments, which are vital

in preserving and promoting its UNESCO Creative City of
Gastronomy status, ensure that their service and culinary
offerings maintain authenticity, quality, and cultural
significance, especially in the face of increased tourism and
changing consumer expectations? What strategies can you
propose to address this common service failure and enhance
the overall gastronomic experience for both locals and tourists,
ensuring the city's culinary heritage continues to thrive?
 Customer's Role
in Value Co-creation
CUSTOMER'S ROLE IN VALUE CO-CREATION

The joint efforts of service providers and customers to collaboratively shape and enhance the overall
service experience. This dynamic process acknowledges that value is co-produced through interactions,
fostering a more personalized and engaging relationship between the service provider and the customer.
CUSTOMER'S ROLE IN VALUE CO-CREATION

PERSONALIZED ISLAND HOPPING TOURS

CUSTOMER'S ROLE IN VALUE CO-CREATION

PERSONALIZED HOTEL STAY EXPERIENCE

CUSTOMER'S ROLE IN VALUE CO-CREATION

BUILD-YOUR-OWN MEAL CONCEPT

THREE MAJOR ROLES PLAYED BY CUSTOMERS
IN SERVICE CO-CREATION AND DELIVERY:

Customers as Extended Employees: In this role, customers actively contribute to the

service creation process, behaving as if they were employees. They play a significant role
in the delivery of the service by performing tasks traditionally carried out by employees.
THREE MAJOR ROLES PLAYED BY CUSTOMERS
IN SERVICE CO-CREATION AND DELIVERY:

Customers as Proponents to Quality of Service: In this role, customers become

advocates for the quality of service provided. They actively promote and share positive
experiences, influencing others to choose the same service.
THREE MAJOR ROLES PLAYED BY CUSTOMERS
IN SERVICE CO-CREATION AND DELIVERY:

Customers as Competitors: In some cases, customers can act as competitors by co-

creating alternative solutions or services that compete with the offerings of traditional
service providers.
Self-service
Technology
 SELF-SERVICE TECHNOLOGY

It refers to automated systems and interfaces that allow individuals to

perform tasks or transactions independently, without direct assistance from
human agents. These technologies are designed to streamline processes,
enhance convenience, and empower users to complete tasks on their own.
IMPORTANCE OF SELF-SERVICE TECHNOLOGY
1. Customer Convenience: Self-service tech
streamlines processes, minimizing wait
times and letting guests manage tasks
independently for an improved
experience.

2. Cost Efficiency: Automation reduces the

need for extensive staff involvement,
leading to cost savings for hospitality
businesses.

3. Personalization and Insights: Self-service

platforms collect data for personalized
services and targeted marketing,
enhancing customer satisfaction.
 Types of
Service Failures
 SERVICE FAILURE

Service failure refers to the breakdown or inadequacy in delivering the expected level of service
as promised or implied by a service provider. It occurs when there is a deviation from customer
expectations, resulting in a failure to meet the specified service standards or requirements.
TYPES OF SERVICE FAILURE:
FAILURES ON SERVICE-PRODUCTS

It refers to instances where the quality, features, or delivery of services

provided to customers fall below expectations.
TYPES OF SERVICE FAILURE:
FAILURES ON CUSTOMER REQUEST DELIVERY

This occurs when a hospitality establishment fails to fulfill specific customer

requests, such as room preferences or special arrangements.
TYPES OF SERVICE FAILURE:
FAILURES ON CUSTOMER SERVICE

Failures in customer service involve shortcomings in the way a hospitality

business interacts with and addresses the needs of its guests.
TYPES OF SERVICE FAILURE:
FAILURES BROUGHT ABOUT BY OTHER
ORGANIZATIONAL KEY PLAYERS

These failures involve lapses in performance by key players within the organization,
such as managers or decision-makers, that adversely impact overall operations.
GUESTS RESPONSES TO SERVICE FAILURE
1. Never return. This refers to guests who
have experienced a service failure and
decide not to return to the establishment
due to dissatisfaction.

2. Complaints. Guests express their

dissatisfaction by formally addressing issues
with the service provided. In the hospitality
industry, this could involve filing complaints
about room conditions, staff behavior, or
other aspects of their experience.
GUESTS RESPONSES TO SERVICE FAILURE

3. Negative word-of-mouth. Guests share

their negative experiences with others,
potentially impacting the reputation of
the establishment.

4. Strike back and get even. Some guests

may seek retaliation by taking action
against the establishment, such as posting
negative online reviews or engaging in
other forms of public criticism.
GUESTS RESPONSES TO SERVICE FAILURE

5. Reduced future engagement. Guests may continue to use the service but reduce
their level of engagement, such as spending less money or utilizing fewer amenities.
SERVICE RECOVERY
It refers to the actions and strategies implemented
by a business or service provider to rectify a
customer's negative experience or dissatisfaction
with their product or service.

It is a process designed to restore customer

confidence, loyalty, and satisfaction after a service
failure or breakdown.

It involves acknowledging the customer's

concerns, promptly addressing the issues, and
taking corrective measures to meet or exceed the
customer's expectations.
SERVICE RECOVERY STRATEGIES:
URGE & MONITOR COMPLAINTS

This service recovery strategy involves actively encouraging customers to

voice their concerns or complaints while closely monitoring feedback
channels to identify and address issues promptly.
SERVICE RECOVERY STRATEGIES:
LEARNING FROM SOLUTIONS

This strategy focuses on analyzing successful resolutions of customer

complaints to identify patterns and implement preventive measures, aiming
to learn from past solutions and proactively avoid similar issues in the future.
SERVICE RECOVERY STRATEGIES:
LEARNING FROM LOST OPPORTUNITIES
WHICH ARE GUESTS

This strategy involves analyzing cases where potential customers chose not to
engage or complete a transaction, extracting insights from lost opportunities to
understand the reasons behind customer hesitations and improve future interactions.
SERVICE RECOVERY STRATEGIES:
INTRODUCING A SERVICE FAIL-SAFE

This strategy involves implementing preventive measures and backup plans

to minimize the occurrence and impact of service failures, creating fail-safes
to ensure a smooth customer experience even when unexpected issues arise.