PRE-FINALS HANDOUTS

QSM

Service Failures and

Service Recovery

In the field of Tourism and Hospitality, service failure cannot be averted. Even in a world
class company with best intentions, failure is inevitable. This is why we need to
understand our customers and what they expect whenever a service failure happens.

What is Service Failure and Recovery?

Service Failure is service rendered not meeting expectations or standards of a guest,

leading to guest dissatisfaction.

Usually, a failure would be because a service was unavailable when it was promised; a
service done slowly or late; a service was wrong or poorly implemented; or a service
staff may be rude in execution.

As failure is inevitable, service recovery can remedy this in the soonest possible time.

Service Recovery is an organization’s response to a failure it committed to improve the

guest experience.

It has great impact on guest satisfactionon, loyalty, word of mouth, and ultimately,
performance.

In fact, as smart guests know that failures are inevitable; and they realize that it is not
the failure that matters, but how an organization recovers from those failures.

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Types of Service Failure
1. Failures on service-products. These are failures which involve issues on the core
product.

2. Failures on customer request delivery. These are failures on adhering to specific

special guest requests, such as seat assignment, special arrangement on menu
items, hotel guest room setup, and program schedules.

3. Failures on customer service. These include problems and complaints on

intentional or unintentional actions of service staff exhibiting offensive attitude to
guests, such as frowning or failure to smile and display a positive disposition to
guests and deliberately ignoring a guest request.

4. Failures brought about by other organizational key players. These are failures
caused by unforeseen happenings, other guests, and other unusual complaints
which a guest still expects to be corrected.

With these failures, whatever may be the cause, a guest will always expect it to be
fixed, the situation turned around in favor of the valued guest.

A remedy to these failures may not be addressed as the guest expects, but an
immediate positive request should always be the answer of the organization.

Guest Responses to Service Failure

If service recovery mechanism is not in place and the organization has failed to turn
back around the situation in favor of the guest, a lot of responses may be displayed.

1. Never Return
2. Complains
3. Negative Word-Of-Mouth
4. Strike Back and Get Even

Service Recovery Strategies

The most significant thing after a service failure is a quick turnaround. So, focus is really
embedded on how to make a failure into an opportunity. Unfortunately, there are also
times that a problem cannot be remedied right there and then as it is rooted deeper on
how the system works.

1. Urge and Monitor Complaints

2. Learning from Solutions Made
3. Learning from Lost Opportunities which are Guests.
4. Introducing a Service Fail-safe

The best way to be a leader in service provision is the delivery of flawless service.

If service delivery has a lot of phases, making it complex, it is better to always have
service guarantee system in place. Thus, it will strengthen the trust that the organization
has invested in its guests and will, in one way or another, exhibit the true motive of the
organization- to serve its guest.

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 Service Excellence and Leadership

This chapter discusses the relationship between service quality, productivity, and
profitability.

This also explains the tools and approaches that would assist organizations on how to
reach and/or maintain service quality and profitability. A classification of organizations
on service leadership is also supplied that can serve as basis in evaluating the status of
an organization.

Relationship Between Service Quality, Productivity, and Profitability

Business thrives because they earn profit.

Profitability is realized if companies learn to provide quality service and to become

productive.

Customer satisfaction is an evaluation of a single consumption experience.

Service quality refers to relatively stable attitudes and beliefs about a firm. If a firm can
provide high service quality, then it would lead to repeat purchase, higher spending, and
referrals.

Measuring Service Quality

Service quality (SQ) is one of the key factors and result-oriented strategies to satisfy
customers and to convince them to become loyal customers by delivering quality-based
products and services to reach their needs and desires.

Measuring Service Quality Criteria

• Soft Standards - rated based on nonquantifiable process and are not easily
observed. These measures are based on feedback, perspectives, and perception
of customers.
• Hard Standards - collected or processed based on activities and outcomes that
can be calculated, timed, or computed. Includes, time required to process a
customer in a queue, number of orders prepared and served, client waiting time
before being entertained, and turnaround time of service vehicles.

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Understanding the Dimension of Service Quality

The perception of quality of service may be influenced in different ways. The manner on
how the service was rendered may be received differently by customers, especially
when service is inconsistent.

Dimension Attributes:

• Assurance. Is about the ability f organizations to communicate guaranteed quality

service to customers. The ability to convince the customer to put their trust and
confidence to an organization is difficult to achieve but is an important aspect to
accomplish.
• Empathy. This dimension speaks about the ability of service organizations to be
compassionate and responsive to the clients’ needs and wants. this embodies
the ability of organizations to look through the perspective of customers when
rendering services.
• Reliability. The consistency and dependability of a service organization to deliver
service based on the expectations of clients. Service organizations can deliver
the same results and satisfaction at different periods or transactions among
customers.
• Responsiveness. This dimension is about the manner on how the service
organizations react to customers’ need. The organization reaction is measured
based on promptness in attending to concerns; sensitivity and enthusiasm in
delivering the request; and flexibility in adapting to specific needs of the
customers.
• Tangibility. Service delivery is enhanced when complemented with the
appropriate physical facilities, correct tools and equipment, competent personnel,
and even by other guests.

Objective of Customer Feedback

1. Performance Appraisal. The result could be a factor to consider as to the

decisions on where the organization plans to proceed. This could also provide
indications on the impact of investments or service innovations.

2. Customer-focused Organization. Relies on feedback to understand the needs

and wants of the clients and to provide customer satisfaction.

3. Customer-driven Growth. Understanding the customer feedback would guide the

organizations on what to offer customers to be loyal to them. Feedback would
guide the organization on how to further improve the service and to develop
products that customers would want. The directions for improvement and
innovation are based on the inputs shared by the customers.

Tools Used to Analyze Service Quality Problems

• The Fishbone Diagram. This tool tries to determine the root cause of the
problem. This technique uses cause and effect analysis in understanding the
problem.

• Pareto Analysis. Identifies the main reasons why such issues happen. It
differentiates the major issues from the minor for organizations to prioritize which
issues should be addressed immediately or more importantly. It often yields 80%
of a certain problem is caused and 20% of all the possible reasons identified by
the Fishbone Diagram.

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 • Blueprinting. Blueprints often show the different stages in the process of service
delivery. A detailed and well-designed blueprint provides easy detection on where
the problem occurred.

Understanding Productivity

Productivity is basically the quantity of goods, products, and services produced from
the number of materials, resources, and assets used. In simpler terms, it is a measure
of output based on the number of inputs used. In the context of the service industry,
measuring an improvement of productivity is difficult to measure since the output cannot
be easily quantified.

Efficiency is a measure of how well things are done based on a given standard in a
specific period.

Effectivenesss is the degree to which an organization meets its objectives and desired
outcomes.

Refining Service Productivity

In the service industry, being productive does not guarantee a successful business
venture. Organizations survive based on how well they can provide guests needs and
wants.

These organizations continually employ strategies to provide the best services in the
most efficient ways.

Strategies in Improving Service Productivity

• Utilizing technology, innovations, and data analytics

• Training, equipping, and motivating employees.
• Deploying workers who are capable of multitasking.
• Maintaining a lean and mean workforce
• Operationalizing customer-operated and self-service technologies (SSTs)
• Redesigning customer service process
• Controlling and minimizing costs
• Outsourcing some nonessential tasks

Improve Productivity through Customer-Driven Strategies

• May use more cost-effective and efficient delivery channel.

• Broaden the participation of “partial employees.”
• Third party service providers
• Be good in managing demand and capacity to maximize use of resources.

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Systems of Service Quality and Productivity

Approaches:
• Total Quality Management (TQM). Assists organizations related to service
excellence, productivity, and innovative process improvements.

• International Organization for Standardization (ISO) 9000 Certification. Deals

with assessment and certification of an organization’s quality management
system.

• ISO is an international organization that develops standards to guarantee quality

and efficiency of products and services.

Approaches:

• Six Sigma. It deals with organizations that have high-volume processes which
aim to reduce defects and cycle times and to improve productivity.

• Malcolm Baldridge National Quality Award (MBNQA). It was developed with the
goal of promoting best practices in quality management and recognizing and
publicizing quality achievements among US organizations.

Service-oriented organizations can choose from any of the abovementioned

approaches to analyze customers’ needs and improve service quality and productivity.

Service Leadership

Firms that are successful in providing service quality and achieved a level of productivity
must sustain its level of performance to maintain customer loyalty and profitability.

A firm performance would define its ability to become competitive and the length of its
existence as a business entity.

4 Basis in Evaluating a Firm’s Performance

Fourth Class Firms - Subservient Firms. Exists under minimum compliance of the
required criteria to conduct business. Employees only meet the required skills of their
jobs. The firms are in the lowest rank among the four types of firms.

Third Class Firms - Traditional Firms. Adhere to the standardized form of operating a
firm. Basis of productivity is of how the organization can strictly follow the defined
operation procedures. Setting objectives, priorities, and directions is hard to establish in
this type of firms.

Second Class Firms - Maven Firms. The firms display a no-nonsense professionalism in
operating an organization. Customers often seek out this type of firms because these
organizations consistently meet customer expectations.

First Class Firms - Innovator Firms. These are firms regarded for their innovativeness
and excellence. They provide seamless service to their identified markets. They are also
known to be the established brands in their respective industries. Employees are
innovative and empowered. They are committed to the firm’s core values and vision.
The workforce is very loyal and highly motivated. Seek to mentor employees to boost
career growth and promote service culture.

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Most service-oriented organizations seek the highest class of service firms by
continually improving and developing to achieve customer loyalty and satisfaction. To
achieve this, organizations must be able to utilize their resources efficiently and improve
their functional areas consciously. More importantly, firms must consider the customers’
inputs when innovating, implementing strategies, and setting directions.

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