Service Recovery

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Table 6.8 contains some statistics on the behavior of dissatisfied customers that suggests a quick resolution to service failure is an important way to create loyal customers. Because customers participate in the service delivery process, an alert employee trained in service recovery techniques can turn a potential disaster into a loyal customer. A service failure can be turned into a service delight by empowering frontline employees with the discretion to “make things right.” For example, when an airplane full of anxious passengers is delayed for some minor mechanical problem, it’s time to break out complimentary drinks. More heroic efforts become legends, such as the story of a Federal Express employee who hired a helicopter to repair a downed telephone line during a snowstorm. Expenses incurred to accomplish a recovery are “pennies on the dollar” compared with the possible adverse ”word-of-mouth” stories that are now turned into good stories of how an employee went the extra mile to accommodate a customer. Training employees in approaches to service recovery should be the first line of defense against defections and “poor word-of-mouth.

The service recovery framework shown in Figure 6.12 is illustrated by the example of Club Med, an all inclusive resort for guests who want to worry about nothing except relaxing and enjoying themselves. In the pre-recovery phase, expectations are set high by past experience or word-of-mouth. However, weather is an uncontrollable variable for Club Med and storms have the potential of ruining expectations of sunbathing on the beach. The immediate recovery phase requires initiative by the staff to guarantee a pleasant experience for the guests despite poor weather. Stories abound about the creative responses to poor weather, such as organizing group games and putting on stage shows.  This ability of the staff to create a memorable experience for guests is called “the Club Med magic.” In the follow-up phase, guests receive photographs and trinkets of the vacation and in severe cases a discounted invitation to return the following year.

Approaches to Service Recovery
There are four basic approaches to service recovery: the case-by-case, the systematicresponse, the early intervention, and the substitute service recovery approaches. The case-by-case approach addresses each customer’s complaint individually. This inexpensive approach is easy to implement, but it can be haphazard. The most persistent or aggressive complainers, for example, often receive satisfactory responses while more “reasonable” complainers do not. The haphazardness of this approach can generate perceptions of unfairness.
 

The systematic-response approach uses a protocol to handle customer complaints. It is more reliable than the case-by-case approach because it is a planned response based on identification of critical failure points and prior determination of appropriate recovery criteria. As long as the response guidelines are continuously updated, this approach can be very beneficial because it offers a consistent and timely response.

An early intervention approach adds another component to the systematic-response approach by attempting to intervene and fix service-process problems before they affect the customer. A shipper who realizes that a shipment is being held up by a truck breakdown, for example, can choose to notify the customer immediately so the customer can develop alternative plans if necessary.

An alternate approach capitalizes on the failure of a rival to win the competitor’s customer by providing a substitute service recovery. At times the rival firm may support this approach. A desk person at an overbooked hotel, for example, may send a customer to a rival hotel. The rival hotel may be able to capitalize on such an opportunity if it can provide a timely and quality service. This approach is difficult to implement because information about a competitor’s service failures is usually


Complaint Handling Policy
A customer complaint should be treated as a gift. A complaining customer is volunteering her time to make the firm aware of an error because she cares. This opportunity should be seized upon not just to satisfy the customer but also to create a relationship with someone who will become an advocate for the firm. A complaint- handling policy  should be incorporated into the training of all customer-contact employees. An example policy might include the following features:

Every complaint is treated as a gift.

• We welcome complaints.
• We encourage customers to complain.
• We make it easy to complain.
• We handle complaints fast.
• We treat complaints in a fair manner.
• We empower our employees to handle complaints.
• We have customer- and employee-friendly systems to handle complaints.
• We reward employees who handle complaints well.
• We keep records of complaints and learn from them. closely guarded.

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