Service recovery is important because it gives companies the opportunity to meet customer expectations and prevent a customer from potentially churning. Service recovery is a chance for the organization to save a customer relationship and improve which ultimately leads to more satisfied customers. Harvard Business Review found that people who complained and received a response were more loyal afterward than those who never complained at all. Without a clear service recovery process in place, valuable opportunities can fall through the cracks. To illustrate service failures, and in the light of implementing a successful service recovery procedure, companies can construct a matrix of operational strategies and possibilities.
Within this first quadrant there are no perceived product or service failings. Customers are happy and leave without complaining. Overall, the organization has delivered what the customers require resulting in celebration. This is the best practice company action. We may assume that as nothing is said nothing went wrong, but we don’t know this for sure or if the customer will return. Collecting customer commitment is therefore required.
There is no perceived product or service failure, however, customers are dissatisfied with aspects of the operation and say so. The product and service offered have not won the “heart and mind” of the customer. The customer requires more information about what they were buying. The method of response required is company “education” ensuring that positive perceptions are established before the product/service is consumed.
There is here an actual product or service failure. To make the matter worse, the customer does not actually comment on this. Customers will not come back to purchase and by not assessing the level of their discontent the organization is unable to recover the situation. The organization is losing both valuable customers and information to improve in the future. The action is the “encouragement of customer complaints” offering a dedicated arena to capture customer feedback.
There is a product/service failure, and the customer speaks up and registers their dissatisfaction. The customer lets you know there is something wrong and is still within the operation. When both elements are present, through actions of service recovery, customers will return. It is therefore important to have the process in place and ensure that staff is aware that any comment made by a customer is picked up and actioned.
Service recovery does not happen automatically. When a customer complains the usual response is to pass the issue to another staff member. The customer feels that they are being pushed around the operation with no actual solution being offered. To ensure that a successful service recovery operation is in place, organizations need to consider the implementation of a service recovery strategy. The main elements of the strategy should be to manage and train employees to resolve issues, empowerment, recognize success stories and communicate best practices.