CHAPTER- 3 SERVICE FAILURE AND RECOVERY PROCESS

LESSON: 3 SERVICE FAILURE AND RECOVERY

INTRODUCTION

Marketing is the performance of those business activities that direct the flow of goods or services from producer to ultimate consumer. The customers may have different likes and dislikes, preferences and attitudes. These things play a crucial role to develop a product or service, which is appropriate according to the aspiration of the customers. Further the relevance of product or service to the aspiration of the customers decides the final success or failure of the product or service.

SERVICES FAILURE

Every effort should be made to develop an appropriate product or service. However, it is not always possible that the service or product would be successful. The success or failure of a product or service depends upon a number of other forces, which are dynamic in nature and changes time-to-time and situation-to-situation. Whatever the methods of service design is adopted, a specific service map or a concept service map - one of the main aims will be to identify the potential points in the process which may result in a service failure. It is probably possible that at some time either result service failure. Therefore, efforts should be made to anticipate these occasions well in advance, so that mistakes could be prevented from turning into a service defect and also a service failure. In this way a service design can also be justified. An organization should try to identify those critical aspects which may results in service failure. Once these aspects have been identified, it can be helpful to design the mechanism as to reduce the risk of human mistakes turning into actual service failures. As old people say, “Prevention is better than cure”. Thus service failure is the end result of all the unwanted things and mistakes made by either party, whether he is customer or server. Customer errors can be classified as relating to preparation for the service provider, the encounter itself, or to the resolution of the encounter.

•           Preparation errors may result from the failure of customers to bring the necessary materials to the encounter, or to understand their roles in the service encounter.

•           Encounter errors include failure or customers to remember steps in the service process to follow the system flow or to specify desires or follow instructions.

•           Resolution errors include failure of customers to signal service failures, learn from experience, adjust expectation, or execute appropriate post encounter action.

 

 

CUSTOMERS’ REACTION TOWARDS SERVICE FAILURE

The question arises that what will be the reaction of the customers in case of a service failure. In other words how customers’ reacts in case the services are not accordance to their expectations. What options are open to customers when they experience a service failure? The customer may pursue the following four major courses of action:

•      Do nothing.

•      Complain to the service firm.

•      Action through a third party viz. consumer advocacy group, consumer affairs or regulatory agencies, civil or criminal court, etc.

•      To stop the services of same supplier and to discourage other people from using the services of similar supplier.

Thus how will a customer react towards failure of service, depends upon knowledge of the customers, resources, attitude and circumstances at the time of purchase. Generally innocent customers respond smoothly and almost do not resist. But active, experienced and educated customers resist strongly and take all those steps, which they feel appropriate. This kind of people do not want any compromise on service quality and the organization must see to it that they are satisfied otherwise they may depreciate the goodwill of the company and can motivate people for not purchasing by negative word of mouth.

Types of complainers

PASSIVE:- Least likely to take any actions

 

VOICERS:- Actively complain to the provider, but not likely to spread negative word of mouth

 

IRATES:- More likely to engage into negative word of mouth and to switch to providers

 

ACTIVISTS:- Above average propensity to complain all dimension.

 

Service Recovery and Meeting Customer Complaints

Service recovery is an umbrella term for systematic efforts by a firm to correct a problem following a service failure and retain a customer’s goodwill. Service recovery plays a crucial role in restoring customer’s satisfactions level in any organization. Things may occur that have a negative impact on its relationships with customers. The true test of a firm’s commitment to service quality satisfaction level isn’t in the advertising promises or the décor and ambience of its offices, but in the way it responds when things go wrong for the customer. The firms don’t react always in ways that match their advertised promises. Effective service recovery requires thoughtful procedures for resolving problems and handling these customers. It is critical for a business organization to have an effective recovery strategy, because even a single service problem can destroy a customer’s confidence in a firm under the following conditions:

 

 

Essentials of service recovery:

• Examine the customer experience pathway and identify the expectations at each point along the pathway.

• Anticipate the key issues and needs at each point along the pathway and create processes and systems that ensure that needs are met and exceeded.

• Educate staff about expectations and engage them in anticipating customer needs at each point along the experience pathway.

• Train staff in communication skills for handling dissatisfied customers, including acknowledging and apologizing when dissatisfaction occurs.

• Provide staff with options and support for making amends to customers who have encountered disappointing experiences. Make sure they understand what options they can offer and who can assist them in dealing with dissatisfied customers.

Service recovery process:

      Apology

Frame customers perception and paves the way to recovery

      Urgent reinstatement

Quick action to remove are correct the problem

      Empathy

Employee understanding and responsiveness

      Symbalic atonement

Tangible evidence for organization willingness to take responsibility

      Follow-up

Evaluate recovery plan

 

ELEMENTS OF AN EFFECTIVE SERVICE RECOVERY SYSTEM:

Service failure leads to human problems - real or imaginary. Whatever the cause, the approach should be humane. Sensitivity and empathy are required to handle such problems diligently. So they need to be handled with care the way you handle glass. Customers problems should be handled promptly because “Justice delayed is justice denied” Managers face a number of challenges in designing a redressal system that provides accurate feedback in a timely and economic fashion that is acceptable to organization and its customers. One must know the various elements of the service recovery system in order to handle or tackle problems promptly, so that one can design an appropriate recovery system. It is not necessary that a particular system is applicable for all organizations and for all types of problems, because the various factors that go into redressal process may differ from organization to organization and situation to situation. Thus a recovery system is applied to various types of problems. The different elements of this system are given below:

From the above diagram it is clear that a recovery system consists of three steps viz. first of all we should do the thing in right way. But it is not always possible that all things are right, there is always a probability of doing thing wrong. If it happened then problems should be handled through an effective procedure for complaint handling. It constitutes the second step. Finally effective problem handling leads to customer satisfaction and loyalty. A brief description of important steps is given below:

(i)            Do it right first time and always: At the very beginning, the marketer should concentrate on doing the job right in first attempt. For this the marketer should consider every possible effort in this regard. The marketer should consider customers’ aspirations, needs, requirements and further he must develop an appropriate service design system. The marketer should avoid personal biases. Market research can facilitate in this stage significantly.

(ii)          Identification of the Problem: If a service fails due to any reason, then marketer must go through an effective complaint handling procedure. For this the first step is to identify the real problem. Since a particular decision is made in the context of real problem. A problem is a need and a question thrown forward for its solution. It is just like the diagnosis of patient by the doctor. Thus at this stage efforts should made to identify the real issue. The emphasis should be given on the cause of the problem, that what real issue is. Further more, efforts are to be made to establish cause and effect relationship. The identification of problem is half solving in itself. There are various methods which helps us in identification of problem such as market research to monitor complaints, develop “complaints as opportunity” culture.

(iii)        To Resolve Problems Effectively: When the problem is identified the second step is to resolve the problem in the best possible way. There may be different kinds of alter- natives which can resolve the problem. An alternative may be defined as future course of action. It is pertinent to mention here that every organization may have different approaches to handle problems. It depends upon the size of an organization, financial  position, managerial attitude, administrative efficiency and other circumstances.

  However, a general approach which is applicable in most cases is:

(a)               Problem identification.

(b)               Development of alternatives

(c)                Evaluation of alternatives

(d)               Selection of alternatives

(e)                Implementation

(f)                Feed back

(iv)        Learn from the Past Experience: It is always beneficial for the marketers to avoid recurring of mistakes. Because it involves wastage of time and money. Thus an intelligent marketer always try to learn from the past experience and take action accordingly. The marketer should emphasize what has happened good in past and avoid what has happened adverse. For this he should adopt root cause analysis. Keeping in view past experience he can develop his efficiency and can become competent and efficient.

 

GUIDELINES FOR THE EFFECTIVE SERVICE RECOVERY SYSTEM

1.            Prompt action: If the complaint is made during service delivery, then time is of essence to achieve a full recovery. Whenever the complaints are made after the fact, many companies have established policies of responding as soon as possible. Even when full resolution is likely to take longer, fast acknowledgement remains very important.

2.            Admit mistakes but don’t be defensive: Be aggressive: Acting defensively may suggest that the organization has something to hide or is reluctant to fully explore the situation. Therefore one should be aggressive in his approach.

3.            To see and understand the problem from customer point of view: Seeing situations through the customers’ eyes is the only way to understand what they think has gone wrong and why they are upset. Service personnel should avoid jumping to conclusions with their own interpretations.

4.            Participative environment: The goal should be to reach at a mutually acceptable solution, not to win a debating contest or prove that the customer is an idiot. Arguing gets in the way of listening and seldom defuses anger.

5.            Try to understand the customer’s feelings: The employees must develop an attitude ‘I can understand why you’re upset’. This would help in building a rapport and is the first step in rebuilding a bruised relationship.

6.            Give customers the benefit of the doubt: Not all customers are truthful and not all complaints are justified. The customers should be treated as though they have a valid complaint until clear evidence to the contrary emerges. If a lot of money is at stake (as in insurance claims or potential lawsuits) careful investigation is warranted; if the amount concerned is small, then it may not be worth haggling over a refund or other compensation. If there is a past history of complaints by the same customer. It is better to go in detail about the past records.

7.            Open system to solve the problem: Whenever instant solutions aren’t possible, telling customers how the organization plans to proceed shows that corrective action is being taken. It also sets expectations as to the time frame.

8.            Feedback to customers about progress: Nobody should be kept in the dark.

Uncertainty breeds anxiety and stress. People tend to be more accepting of disruptions if they know what is going on and receive periodic progress reports.

9.            Envisaged compensation either by monetary form or by equivalent services: When customers did not receive the service as per the commitments, or suffered serious inconvenience because the service failed, then either a monetary payment of offer or equivalent service in kind should be provided. Such action may also be helpful to reduce the risk of legal action to be taken by the customer. Service guarantees often lay out in advance.

In many cases, what customers want most is an apology and a commitment to avoid similar problems in the future.

10.        Disappointment of customer due to service failure: one of the biggest challenges is to restore the confidence of the customer to maintain the relationship for the future. This may be helpful for the perseverance and to follow through, not only to defuse their anger but also to convince them that actions are being taken to avoid a repetition of such type of problems. The recovery efforts should be made effectively in building loyalty and referrals.

KEYWORDS

Service failure: Inability of the service provider to render promised service / as per the customer expectation.

Service recovery: Systematic efforts by a firm to correct a problem in case of a service failure.

SELF ASSESSMENT QUESTIONS

1.        What are the different elements of service design system? Discuss.

2.        Define service failure. How is the identification of points of potential services failure of paramount importance for marketer?

3.        What are the different elements of service recovery system? How can a marketer make service recovery system effective?