Service recovery refers to the actions an organization takes in response to a service failure. In other words, it’s a bundle of resources that an organization can employ in response to a failure or to prevent it. Recovery management is considered to have a significant impact since customers are often more dissatisfied by an organization’s failure to recover than by the service failure itself. Therefore well-executed service recoveries are more important for enhancing customer satisfaction, building customer relationship, and preventing customer defection.
In order to create a model for service recovery, one must understand the concept of perceived justice.
Distributive Justice: When a customer suffers an economic loss, compensation should be in terms of economic benefit.
EX: If a customer walks into a hotel; hands over his car for valet parking and the driver dents the car by accident then this is a service failure. The customer has suffered a financial loss. Thus the hotel should bear this financial loss. An apology note will not suffice.
Procedural Justice: Once a service recovery is alerted, what means are employed to resolve conflict? Speed of justice is an important parameter here. Appointed of impartial judges not connected directly to a firm could be procedural justice.
EX: If a customer walks into a restaurant and a waiter accidentally drops something on customer’s dress then the customer has suffered material loss but more importantly prestige loss. In such case if hotel replaces the dress of the customer then it will NOT be justice. Hotel must address the prestige loss by perhaps public apology then and there and perhaps offer a new dress.
Interactional Justice: Manner in which information is exchanged and outcomes are communicated. An apology or social response is a method of interactional justice. Initiation of service recovery could also be considered interactional justice.
EX: If a customer loses his property in a hotel then manner in which the issue is managed and perhaps item recovered is interactional Justice: Having people to investigate, lodge police complaint ( thereby brining 3rd non particle party) and perhaps helping investigators.
Post creation of service blueprint, companies must find every possible failure and rate it on the above three point to find which type of harm has been caused and what is suitable remedy. Once this framework is ready, it should be institutionalized to ensure Interactional Justice and every breakdown must be precisely managed the way it is required.
Adequate budget should be allocated for service breakdown and authority should be decentralized to point of contact of customer to ensure highest level of customer satisfaction.
I hope this blog impresses one on creating a service recovery model for their company!
Good discussion on linkedIn: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=79559959&gid=74793&commentID=60105320&goback=%2Eanb_74793_*2%2Egmp_74793%2Eamf_74793_134903684&trk=NUS_DISC_Q-ncuc_mr#commentID_60105320