Service Failures

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COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning

is a trademark used herein under license.

ALL RIGHTS RESERVED.

Chapter 14

Service Failuresand

Recovery Strategies





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Figure 14.1 Types of Service Failures

Total

sample

Is there

a service

delivery

system

failure?

Group 1Nature of

failure?

Nature

of requests/

need?

Nature of

employee

action?

Unavailable

Slow

Other failures

Special needs

Customer preference

Customer error

Disruptive others

Level of attention

Unusual action

Cultural norms

Gestalt

Adverse conditions

Group 2

Group 3

Group 1A

Group 1B

Group 1C

Group 2A

Group 2B

Group 2C

Group 2D

Group 3A

Group 3B

Group 3C

Group 3D

Group 3E

Is there

an implicit/

explicit

request for

accomo-

dation

Is there an

Unpromoted

/

unsolicited

action by

employee? No

Yes

Yes

Yes

No

No

Source: Mary Jo Bitner, Bernard H. Booms, and Mary Stanfield Tetreault, The Service Encounter:

Diagnosing Favorable and Unfavorable Incidents,Journal of Marketing(January 1990, pp. 71-84.


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TYPES OF SERVICE FAILURES

Group 1 Failures

Core service failures

slow service unavailable service

other core service failures


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Group 2 Failures

Responses to implicit/explicit requests

special needs customer preferences

customer error

disruptive others


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Group 3 Failures

Unprompted/Unsolicited employee actions

level of attention unusual action

cultural norms

gestalt

adverse conditions


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(new category)

Group 4 Failures (Employee-reported

incidents)

Problematic customer behavior drunkenness

verbal and physical abuse

breaking company policies or laws

uncooperative customers


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COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license.


TYPES OF COMPLAINTS

Instrumental

expressed for the purpose of altering anundesirable state of affairs

Noninstrumental

expressed without the expectation that anundesirable state will be altered


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TYPES OF COMPLAINTS

Ostensive

outer-directed complaints

Reflexive

Inner-directed complaints


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WHY DO CUSTOMERS COMPLAIN?

Correct the problem

Emotional release from frustration

Regain some measure of control byspreading negative w-o-m

Solicit sympathy

Test for consensus

Create an impression of being moreintelligent and discerning


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WHY DONT CUSTOMERS COMPLAIN?

Dont know who to complain to

Dont think it will do any good

May doubt their own subjective evaluation

May accept part of the blame

May want to avoid confrontation

May lack expertise


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COMPLAINING OUTCOMES

Voice

High => store manager

Medium => sales clerk

Low => no one associated with the store

Exit

High => never purchases again

Medium => only purchases if other alternatives

are not available

Low => continues to shop as usual


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COMPLAINING OUTCOMES

Retaliation

High => tells lots of people and attempts tophysically damage the store

Medium => tells a few people and created

minor inconveniences

Low => does not retaliate at all


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TRENDS IN COMPLAINT RESOLUTION

Complaints are more likely to be acted upon

when:

complaints are made to managers

formally designated complaint handlers are

involved

someone with a personal tie to the company is

involved the complaint is about the quality of service as

opposed to an employees personality


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SERVICE RECOVERY

Service recovery paradox

customers are likely to evaluate a firm higher if

a mistake is made and corrected than had theservice been delivered correctly the first time.


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DEVELOPING A SERVICE RECOVERY

PROGRAM

Measure the costs calculate the lifetime value of a customer

Actively encourage complaints

Anticipate needs for recovery

Respond quickly

Train employees

Empower the front-line

Close the loop


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SERVICE RECOVERY EVALUATION

Perceived justice needs--based on equity

theory which weighs outcomes versus

inputs distributive justice

outcomes

procedural justice

process

interactionaljustice

the human content of the recovery process


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TYPICAL RECOVERY STRATEGIES

(distributive justice outcomes)

Compensatory strategies

gratis discounts

upgrades

free ancillary service Refunds


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TYPICAL RECOVERY STRATEGIES

(distributive justice outcomes)

Corrections

Replacement strategies

Apology

Disregard


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RECOVERY TACTICS

Poor responses

Fail to recognize the seriousness of the problem

Fail to adequately accommodate the customer

Act as though nothing is wrong

Fail to explain why the problem occurred

Leave the customer to solve the problem on his or herown

Promise to do something and dont follow through


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SERVICE FAILURES

& RECOVERY STRATEGIES:

THE RESTAURANT INDUSTRY


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SERVICE FAILURES:


Group 1 failure categories (44.4%)

Product defects (20.9%)

food was described as cold, soggy, raw, burnt,spoiled, or containing inanimate objects such as hair,

glass, bandages, bag ties, and cardboard.

Slow/unavailable service (17.9%)

waiting excessively, not being able to find assistance


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SERVICE FAILURES:

THE RESTAURANT INDUSTRY Facility problems (3.2%)

cleanliness issues such as bad smells, dirty utensils,

and animate objects (e.g., insects) found on the table

or in the food

Unclear policies (1.6%)

policies that were perceived as unfair by the

customer, such as coupon redemption, or forms of

payment

Out-of-stock conditions (.8%)

inadequate supply of menu items


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SERVICE FAILURES:

THE RESTAURANT INDUSTRY Group 2 failure categories (18.4%)

food not cooked to order (15.0%)

requested food be prepared in a particular manner

and restaurant failed to meet request

seating problems (3.4%)

seating nonsmokers in smoking section and vice

versa

lost or disregarded reservations

requests for special tables that were denied

seating among unruly and disruptive customers


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SERVICE FAILURES:



inappropriate employee behavior (15.2%)

rudeness, inappropriate verbal exchanges, and poor

attitudes

wrong Orders (12.6%)

delivery of the incorrect food item, either to the

table, or in the case of fast food, in packaging so that

the mistake was not discovered until the customer

had left the premises


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SERVICE FAILURES:



lost orders (7.5%) situations in which the customers order was lost and

never fulfilled

mischarged (1.9%)

being charged for items that were never sent, being

charged incorrect prices for items that were ordered,

and providing incorrect change


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ALL RIGHTS RESERVED

SERVICE FAILURES:

THE RESTAURANT INDUSTRY Recovery Strategies (frequency, retention)

Replacement (33.4%, 80.2%)

Free Food (23.5%, 89.0%)

Nothing (21.3%, 51.3%)

Apology (7.8%, 71.4%)

Correction (5.7%, 80.0%)

Discount (4.3%, 87.5%)

Manager Intervention (2.7%, 88.8%)

Coupon (1.3%, 80.0)%

Service Failures

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