Professional Documents
Culture Documents
Mcgraw Hill/Irwin
Mcgraw Hill/Irwin
Chapter
Service Recovery 7
7-2
Objectives for Chapter 7:
Service Recovery
Illustrate the importance of recovery from service failures in keeping
customers and building loyalty.
7-4
Figure 7.1: Complaining Customers:
The Tip of the Iceberg
7-6
Exhibit 7.1: The Internet Spreads the Story
of Poor Service Recovery
7-7
The Service Recovery Paradox
7-8
The Service Recovery Paradox
“A good recovery can turn angry, frustrated customers
into loyal ones. ..can, in fact, create more goodwill than
if things had gone smoothly in the first place.” (Hart et
al. 1990)
HOWEVER:
Only a small percent of customers complain
Service recovery must be SUPERLATIVE
Only with responsiveness, redress, and empathy/courtesy
Only with tangible rewards
Even though service recovery can improve satisfaction, it has
not been found to increase purchase intentions or
perceptions of the brand
Service recovery is expensive
7-9
The Service Recovery Paradox
The service recovery paradox is more likely to occur
when:
The failure is not considered by the customer to be severe
The customer has not experienced prior failures with the firm
The cause of the failure is viewed as unstable by The
customer
The customer perceives that the company had little control
over the cause of the failure
7-10
Customer Complaint Actions Following Service
Failure
7-11
Types of Complainers
7-12
Types of Complainers
7-13
Service Recovery Strategies
7-14
Fixing the Customer
7-15
Respond Quickly
7-16
Provide Appropriate Communication
7-17
Treat Customers Fairly
Outcome fairness
Outcome (compensation) should match the customer’s level of
dissatisfaction; equality with what other customers receive; choices
Procedural fairness
Fairness in terms of policies, rules, timeliness of the complaint
process; clarity, speed, no hassles; also choices: “What can we do to
compensate you…?”
Interactional fairness
Politeness, care, and honesty on the part of the company and its
employees; rude behavior on the part of employees may be due to
lack of training and empowerment
7-18
Fixing the Problem
7-19
Service Guarantees
Guarantee = an assurance of the fulfillment of a condition
(Webster’s Dictionary)
7-21
Benefits of Service Guarantees
A good guarantee forces the company to focus on its customers.
An effective guarantee sets clear standards for the organization.
A good guarantee generates immediate and relevant feedback
from customers.
When the guarantee is invoked there is an instant opportunity
to recover.
Information generated through the guarantee can be tracked
and integrated into continuous improvement efforts.
A service guarantee reduces customers’ sense of risk and builds
confidence in the organization.
7-22
When to Use (or Not Use) a Guarantee
7-23
Causes Behind Service Switching
7-24