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Service Failure Recovery Impacts Customer Satisfaction Levels

A service failure, simply defined, is service performance that fails to meet a customer�s expectations.�Typically, when a service failure occurs, a customer will expect to be compensated for the inconvenience in the form of any combination of refunds, credits, discounts or apologies.

The success of such recovery efforts is determined by the individual customer�s expectations and perceptions of the organization.�Two key elements impact any effort to restore customer satisfaction: the strength of the customer relationship and the severity of the service failure.

The strength of a customer�s relationship with the organization prior to a service failure has a buffering effect in the event of failure. Research suggests that customers who expect the relationship to continue actually have lower service recovery expectations, and in turn, are more satisfied with service performance after recovery.

While this may seem counterintuitive at first glance, consider the expectations of customers with a stronger relationship with the organization. A customer who does not have much commitment to the organization tends to be more transaction-focused and expects immediate recovery when a particular transaction fails to meet expectations.

Conversely, a customer with strong commitment may demand less immediate compensations with the expectation that strong future interactions may correct the failure over time.�Such findings suggest that service providers not only have measures in place to identify the strength of customer relationships but also the ability to react to service failures.

The severity of the service failure moderates the relationship between satisfaction and commitment.�Even with strong recovery, research indicates that customers may still be upset, engage in negative word-of-mouth, and be less likely to develop trust with and commitment to the organization, if the original service failure was really bad.

In these cases, managers made need to do more to mend the customer relationship and restore commitment.�To identify such cases, service organizations need to track and identify occurrences of service failures as well as the severity of each.

The data available at the point of any service failure, most notably the information provided by the customer at the time of the complaint, should be viewed as critical marketing research data necessary not only for immediate service recovery but for improvement of future performance.

Remember, a service failure is defined as a failure to meet customer expectations and the success of any recovery effort is measured by each individual customer against his/her own expectations. Therefore, managers would be well served to conduct a post-recovery assessment of customer expectations and perceptions of recovery performance against those expectations.

A Service Failure Example: Serving Cold

The impact of service failure recovery on customer satisfaction can be easily illustrated with a familiar example.�Consider the case of a restaurant patron complaining about his meal being served cold.�In all likelihood, this is not a severe failure if managed properly.

If the customer�s server fails to offer a sufficient apology and brings back a reheated meal after a 20-minute wait, a first-time customer may be immediately deterred and never return.�If this is a long-time customer who has always received excellent service, he may or may not write this failure off, but either way will expect this sub-par service to be countered with excellent service in the future.

While you may expect the customer with a long history of having received excellent service to be more demanding in the case of such a failure, in reality the new customer has the higher expectations.�His perceptions of the restaurant are impacted by only this one experience where service performance failed to meet his expectations.�Without a formal apology from a supervisor, a refund, and perhaps a future credit, this new customer may allow this experience to so alter his expectations of service performance at this restaurant as to prevent him from returning.

The long-time customer has his expectations set by a long-history of excellent dining experiences and may be easier to satisfy in the immediate wake of a service failure.

In either case, the restaurant manager must immediately begin to turn his focus on ensuring future service delivery levels and strengthening the relationship with each of these customers.

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