Service failure is generally described as service performance that falls below a customer’s expectations in such a way that leads to customer dissatisfaction (Zeithamel et.al., 2016). Service recovery refers to the actions taken by an organisation in response to service failure. Failure occurs for many reasons such as the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed by less motivated employees (Choua, Hui Hsub & Jia Gooc, 2009). Service failure bring about negative feelings and responses can generate effects and paradox.
Service recovery refers to resolving customer problems effectively which would have a strong impact on customer satisfaction, loyalty, word-of-mouth communication and bottom-line performance. Customers who experience service failures but who are ultimately satisfied acknowledge recovery efforts, often become more loyal to the organisation. That loyalty translates into profitability, sustainability, improved employees’ working conditions, communication, personal growth, business policies and procedures, security and supervision (Better Business Bureau, 2014).
However, the service recovery paradox occurs when a customer who was initially dissatisfied with service experience, goes on to experience a high level of excellent service recovery, leading them to be even more satisfied and more likely to purchase than if no problem had occurred at all. Although such extreme instances are relatively rare, that initial disappointed customer who experienced good service recovery might even be more satisfied and loyal as a result (Choua, Hui Hsub & Jia Gooc, 2009). As such, online service recovery enabling technologies have the potentials to add value in the process, improve working conditions, increase employees’ job satisfaction and motivation and deliver quality service.
58 2.7.11.1 Service recovery strategies
Service recovery strategies include reducing the impact of service failure, encouraging and tracking complains, responding timeously, providing adequate explanation of the failure and treating customers fairly. Reducing the impact of service failure implies that service employees should deliver according to brand promises by doing the right thing the first time. In so doing, service recovery becomes unnecessary because customers get what they expect, thus enabling savings in terms of service re-processing and compensations for errors committed (Randhawa & Scerri, 2017).
Nevertheless, it is possible that service employees’ efforts to deliver according to brand promises does not prevent service failure. In such scenario, it would be advisable to acknowledge the failure, encourage customers to report the nature of service failure because even in a zero defections organisation that aims for 100 per cent service quality, failure occurs sometimes. However, it was established that when customers report service failure, they usually request quick responses. Research suggests that 46 per cent of complaining customers would be satisfied if the complaint was handled by the first contact in the organisation. However, once three or more contacts get involved in addressing the complaint, the percentage of customers who are satisfied with service failure response drops to 21 per cent (Randhawa & Scerri, 2017).
When providing adequate explanations about the causes of service failure, customers do understand why the failure occurred. Real cause explanations in a friendly and fairly manner would defuse negative reactions and convey respect for the customer who expect to be treated fairly in terms of the outcome they receive, the process by which the service recovery takes place, and the interpersonal treatment received from employees attempting to address the service failure (Zeithamel et.al., 2016). Choua, Hui Hsub and Jia Gooc (2009) argue that service organisation employees should strive to maintain long-term relationships with customers; hence in case of service failure, customers that have strong relationships with the organisation are often more co- operative during service failures and more open to the organisation’s service recovery efforts.
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Established service recovery programmes reinforce conservative-relational competitive advantage that would be achieved when adopting a new service delivery channel because the programme would improve employees’ working conditions to learn from mistakes, improve internal communication, creates basis for personal growth and better understanding of business policies and procedures (Choua, Hui Hsub & Jia Gooc, 2009).
Motivated employees’ ability to learn from mistakes includes learning from lost customers. Lost customers are customers who decided to de-register from a service as result of service failure. It is argued that discovering the reasons customers switched the brand can assist in preventing service failures in the future (Zeithamel
et.al., 2016). Ethically, it is recommended that service organisations should proactively
anticipate on customer complaints before being forced to do so through legislation. Indeed, if service organisation is not seen to be responding to the complaints of customers, governmental bodies may step in and impose regulations and legislations to ensure the protection of the consumer (Choua, Hui Hsub & Jia Gooc, 2009).
2.7.11.2 Service guarantee
A guarantee is a pledge or assurance that the service offered by the organisation will perform as promised and, if not, then some form of reparation will be undertaken. There are benefits associated with service guarantee. Service guarantees can serve not only as a marketing tool but as a means for defining, cultivating, and maintaining quality throughout an organisation. Service guarantee benefits include forcing the organisation to improve working conditions in order to meet customers’ demand, setting clear business standards for the organisation, continuous improvement efforts, and employee morale and loyalty enhancement (AIS Solutions, 2017).
When an individual buys a car, a camera, or a toaster oven, they receive a warranty, a guarantee that the product will work. However, receiving a warranty for services such as auto repair, wedding photography, business registration or a catered dinner becomes a challenge. It is argued that services simply cannot be guaranteed because they are generally delivered by human beings, who are known to be less predictable than machines, and they are usually produced at the same time they are consumed.
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The above does not mean that customer satisfaction cannot necessarily be guarantee. Service organisation equipped with service enabling technologies can commit to error- free service that can guarantee customer satisfaction. Motivated employees in service who put customer interests first do not necessarily lead to service failure. For example, Lufthansa guarantees that customers will make their connecting flights “if there are no
delays due to weather or air-traffic control problems”. Yet these two factors cause 95
per cent of flight delays around the world. Bank of America will refund up to six months of cheque account fees if a customer is dissatisfied with any aspect of their cheque account service. Indeed a good service guarantee is unconditional, easy to understand meaningful, easy to invoke, and easy to collect on (AIS Solutions, 2017).
Effective communication is a critical component of customer service for service organisations. Customer service efforts are designed to ensure the prompt and efficient delivery of quality services to customers, as well as the effective recovery from any service-related issues that may arise. In dealing with customers, communication is essential, whether it is face-to-face, over the phone, via email or, increasingly, through online channels. The next section discusses internal and external communication in service organisation.
2.7.12 Managing internal and external communications in service organisation