An experimental study of service recovery options
Introduction
Customer satisfaction has been described as both the ultimate goal of the market
economy (Pfaff, 1976) and the key outcome of the marketing process (Bateson,
1995, p. 25) while reliability is regarded as the core of service quality (Berry and
Parasuraman, 1992). Yet, mistakes are an unavoidable feature of all human
endeavour and thus also of service delivery. Although poor service delivery may
initially appear to be a disaster, opportunities abound for service companies to
resolve problems, go beyond the call of duty and win a customer for life. In other
words, effective customer complaint handling, or service recovery, can turn
angry and frustrated customers into loyal ones.
Customer loyalty has definite financial benefits since the cost to attract a new
customer is significantly higher than retaining an existing one (Fornell and
Wernerfelt, 1987). Canadian Airlines, for instance, have calculated the value of a
satisfied business travel customer to be $915,000 over a ten-year period (Jenkins,
1992). Repeatedly disappointing customers could thus be a costly affair.
Kloppenborg and Gourdin (1992) have produced evidence that recovery-related
dimensions feature prominently in service quality/customer satisfaction
evaluations, at least for the airline industry. Responses from a sample of airline
passengers suggested that, of the ten most important dimensions listed, five
related to service recovery: the airline is responsible for lost baggage (the most
important); timely information should be available on delayed flights (second); the
airline is responsible for delayed passengers (fourth); on-board comforts during
delays (eighth); and, airlines should take care of delayed passengers (tenth).
The dominant influence of service failure-related dimensions can be attributed
to the fact that services, because of their largely intangible nature, are perceived
as more risky to buy than, for instance, physical products (Murray, 1991). Much
of this risk can be attributed to “how the service will perform”, that is, a reliability
failure risk or quality risk (Turley and LeBlanc, 1993). Effective service recovery
can go a long way towards projecting a “our service is guaranteed” image,
providing a safety net and, in this way, reduce perceived risk.
Service recovery is of particular importance if one considers that in many
(according to some studies, the majority of) instances dissatisfied customers
simply do not complain to the seller or service provider. The few who do
complain provide valuable information in terms of what can be done to improve
customer satisfaction. The unwillingness to air complaints results in ignorance
International Journal of Service
Industry Management,
Vol. 8 No. 2, 1997, pp. 110-130.
© MCB University Press, 0956-4233
Received April 1996
Revised September
1996
An experimental
study of service
recovery options
111
among service firm decision makers and has a number of serious consequences
including a declining market share, more expensive defensive marketing
strategies (Fornell and Wernerfelt, 1987, p. 338), the inability to correct faulty
systems and the undermining of the validity of customer complaint data as input
to decision making (Bearden and Teel, 1983, p. 22). To avoid these negative
outcomes customers ought to be encouraged to complain while employees
should be willing and able to respond (Fornell and Wernerfelt, 1987, p. 338). In
other words,An experimental study of service recovery options