SERVICE RECOVERY

Service Recovery



Service Recovery

Introduction

The aim of service recovery is to recognize customers with issues and then to address those issues to the customers' satisfaction to endorse customer retention.  However, service recovery doesn't just happen.  It is a systematic business process that must be designed properly and implemented in an organization.  Perhaps more importantly, the organizational culture must be supportive of idea that customers are important and their voice has value.  (Barner,2004,33)

Research has shown that customers who have had a service failure resolved quickly and properly are more loyal to a company than are customers who have never had a service failure -- significantly more loyal.  Service Recovery practices are a critical element in a Customer Loyalty Program.  

In a time with a high degree of industry work division and micro-profit, aggressively developing new customers is one of the ways for firms to expand new markets. In addition, in order to maintain old customers' loyalty, reducing the probability of service failure is the feasible direction. However, when there is any service failure, the kinds of service recovery tend to affect customers' after-sale satisfaction and loyalty (Cranage & Sujan, 2004; Spreng, Harrell, & Mackoy, 1995). Cranage and Mattila (2005) indicated that when there was service failure and the front-line service personnel did not effectively deal with or compensate for the loss due to the failure, the customers' dissatisfaction would be increased. Besides, nowadays when the output value of the service industry is increasing and becoming more important, the issues of service quality will reflect before and in the service. The success or failure of service providers in the service process has become more and more important in a time when consumer consciousness has greatly increased. In other words, firms have relatively valued the recovery and response of 'service failure'.

Generally, the past studies related to 'service failure' showed the following directions:

Emphasizing the selection and application of recovery strategies after service failure. For example, the empirical study of Weun, Beatty and Jones (2004) indicated that the degrees of service failure significantly influenced customers' satisfaction, trust and commitment. Bitner, Booms and Tetreault (1990), Kelley, Hoffman and Davis (1993) and Spreng et al. (1995) argued that the most commonly used service recovery measures included apology, assistance and compensation. The study of Tax, Brown and Chandrashekaran (1998) suggested evaluating whether service recovery allowed customers to have fair cognition toward the service recovery from three constructs: outcome fairness, procedural fairness and interactional fairness. Wong, (2004) investigated different effects of service failure recovery in different service industries, such as the effective service recovery in a hair salon: apology and intangible compensation had a positive influence on customers' recovery satisfaction and loyalty.

Exploring the types of service failure and compensation and the reasons of formation. For example, service failure could be divided into process and outcome failure. The former referred to the service errors during the process of service delivery, whereas the latter meant that the customers were not satisfied after receiving the ...