Service recovery is an organization's resolution of problems from dissatisfied
customers
In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for m ...
, converting those customers into
loyal customers. It is the action a service provider takes in response to service
failure
Failure is the state or condition of not meeting a desirable or intended objective (goal), objective, and may be viewed as the opposite of Success (concept), success. The criteria for failure depends on context, and may be relative to a parti ...
. By including customer satisfaction in the definition, service recovery is a thought-out, planned process of returning aggrieved/dissatisfied customers to a state of
satisfaction with an organization/service. Service recovery differs from complaint management in its focus on immediate reaction to service failures. Complaint management is based on customer complaints, which, in turn, may be triggered by service failures. But since most dissatisfied customers are reluctant to complain, service recovery attempts to solve problems at the service encounter before customers complain or before they leave the service encounter dissatisfied. Both complaint management and service recovery are
customer retention
Customer retention refers to the ability of a company or product to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defe ...
strategies. Researchers recently proved that strategies such as value co-creation and follow-up can improve the effectiveness of service recovery efforts.
Effects
Literature on service recovery suggests that a good recovery has a positive impact on satisfaction, recommendation intention,
word-of-mouth
Word of mouth, or ''viva voce'', is the passing of information from person to person using oral communication, which could be as simple as telling someone the time of day. Storytelling is a common form of word-of-mouth communication where one pe ...
, loyalty, image, and
trust
Trust often refers to:
* Trust (social science), confidence in or dependence on a person or quality
It may also refer to:
Business and law
* Trust law, a body of law under which one person holds property for the benefit of another
* Trust (bus ...
.
Effective service recovery could not only eliminate the loss of service failure, but also improve much higher service satisfaction on contrast with the situation without service failure. Some even argue that a good recovery can increase satisfaction to a higher level than if nothing had gone wrong in the first place, which is referred to as the
service recovery paradox The service recovery paradox (SRP) is a situation in which a customer thinks more highly of a company after the company has corrected a problem with their service, compared to how they would regard the company if non-faulty service had been provide ...
. Many researchers provided evidence in the existence of
service recovery paradox The service recovery paradox (SRP) is a situation in which a customer thinks more highly of a company after the company has corrected a problem with their service, compared to how they would regard the company if non-faulty service had been provide ...
from rational customer expectation through interaction between employees and customers under service failure.
Categories
Three categories of recovery strategies can be distinguished: Customer recovery is aiming at satisfied customers, process recovery tries to improve processes and employee recovery as an internal marketing strategy to help employees coping with failure and recovery situations.
[James A. Fitzsimmons and Mona J. Fitzsimmmons: Service management: operations, strategy, information technology, 2021, 7th edition.]
See also
*
Services marketing
Services marketing is a specialized branch of marketing which emerged as a separate field of study in the early 1980s, following the recognition that the unique characteristics of services required different strategies compared with the marketin ...
References
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Customer relationship management
Customer experience
Customer service
Services marketing