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Service recovery is an organization's resolution of problems from dissatisfied customers, converting those customers into loyal customers.^[1] It is the action a service provider takes in response to service failure.^[2] 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.^[3] 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.^[4] But since most dissatisfied customers are reluctant to complain,^[5] 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 strategies.^[6] Researchers recently proved that strategies such as value co-creation and follow-up can improve the effectiveness of service recovery efforts.^[7]

Effects

Literature on service recovery suggests that a good recovery has a positive impact on satisfaction, recommendation intention, word-of-mouth, loyalty, image, and trust.^[8]^[9]^[10]^[11]

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.^[12]^[13] Many researchers provided evidence in the existence of service recovery paradox from rational customer expectation through interaction between employees and customers under service failure.^[14]^[15]

References

^ James A. Fitzsimmons and Mona J. Fitzsimmmons: Service management: operations, strategy, information technology, 2011, 7th edition, p136.
^ Grönroos, Christian. "Service Quality: The Six Criteria of Good Perceived Service Quality." Review of Business 9, no. Winter (1988): 10-13.
^ Lewis, Barbara R. "Service Promises, Problems and Retrieval. Working Paper." Paper presented at the QUIS, Karlstad, 1996.
^ Stauss, Bernd, and Wolfgang Seidel. Complaint Management. The Heart of CRM. Mason, OH: Thomson, 2005.
^ Andreasen, Alain R., and Arthur Best. "Customers Complain-Does Business Respond?". Harvard Business Review 55, no. July–August (1977): 93-101.
^ Halstead, Diane, Edward A Morash, and John Ozment. "Comparing Objective Service Failures and Subjective Complaints: An Investigation of Domino and Halo Effects." Journal of Business Research 36, no. 2 (1996): 107-15.
^ Gohary, Ali , Hamzelu, Bahman and Alizadeh, Hamid. "Please explain why it happened! How perceived justice and customer involvement affect post co-recovery evaluations: A study of Iranian online shoppers." Journal of Retailing and Consumer Services Volume 31, July 2016, Pages 127-142.
^ Maxham, James G. III. "Service Recovery's Influence on Consumer Satisfaction, Word-of-Mouth, and Purchase Intentions." Journal of Business Research 54, no. October (2001): 11-24.
^ Spreng, Richard A., Gilbert D. Harrell, and Robert D. Mackoy. "Service Recovery: Impact on Satisfaction and Intentions." Journal of Services Marketing 9, no. 1 (1995): 15-23.
^ Smith, Amy K., Ruth N. Bolton, and Janet Wagner. "A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery." Journal of Marketing Research 36, no. August (1999): 356-72.
^ Tax, Stephen S., Stephen W. Brown, and Murali Chandrashekaran. "Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing." Journal of Marketing 62, no. April (1998): 60-76.
^ Hart, Christopher W. L., James L. Heskett, and W. Earl Jr. Sasser. "The Profitable Art of Service Recovery." Harvard Business Review 68, no. July–August (1990): 148-56.
^ McCollough, Michael A., and Sundar G. Bharadwaj. "The Recovery Paradox: An Examination of Customer Satisfaction in Relation to Disconfirmation, Service Quality, and Attribution Based Theories." In Marketing Theory and Applications, edited by Chris T. Allen, 119. Chicago: American Marketing Association, 1992.
^ Schminke, M. et al., 2014. Better than ever ? Employee reactions to ethical failures in organizations , and the ethical recovery paradox. , 123, pp.206–219.
^ Magnini, V.P. et al., 2007. The service recovery paradox: justifiable theory or smoldering myth? Journal of Services Marketing, 21(3), pp.213–225
^ Tax, Stephen S., and Stephen W. Brown. "Recovering and Learning from Service Failures." Sloan Management Review, Fall (1998): 75-88.
^ Johnston, Robert, and Stefan Michel. "Overcoming Recovery Myopia: Three Types of Service Recovery." International Journal of Operation & Production Management 28, no. 1 (2008): 79-99.
^ Michel, Stefan, David E. Bowen, and Robert Johnston. "Why Service Recovery Fails: Tensions among Customer, Employee, and Process Perspectives." Journal of Service Management 20, no. 3 (2009).
^ James A. Fitzsimmons and Mona J. Fitzsimmmons: Service management: operations, strategy, information technology, 2021, 7th edition.