Jeremy Stowell and Dr. Kristie Seawright, Department of Business Management
Successful firms that practice TQM have adopted the philosophy “the customer is king.” (2) Service firms would like to provide their customers with quality service in every transaction. However, mistakes in service related businesses are inevitable because of the high degree of customer contact.
Since errors will occur, a company must have a service recovery system and must attempt to recover a customer once a service failure occurs. A strong correlation exists between customer satisfaction with response to service failures and the likelihood of the customer purchasing another product or service from the same company. (2) In addition, the amount of service recovery required depends on the magnitude of the service failure.
Much research has been done on service quality. Service quality is meeting or exceeding the desires and expectations of customers. This research provides helpful insights on service system design to attempt to eliminate service failures. However, very little research has been done concerning what a firm must do to recover a customer once service failure has occurred.
Customers perceive two components of service recovery–operations and communications–to be very important. The operations side deals with correcting the error and delivering the product or service as it should have been originally. The communication aspect is the interaction of the customer and the service provider after the service error has occurred.
The effectiveness of service recovery varies according to how well customer expectations are met by the recovery system. Due to the individual nature of service failures, customer expectations are difficult to predict. However, the Kano model of customer satisfaction explains relationships between product and service attributes and customer satisfaction. (1) Research for this project included investigating the Kano model and the role it plays in understanding and explaining customer perceptions of service recovery quality.
The Kano Model
The Kano Model of customer satisfaction suggests that there are three types of service quality characteristics. They are “expected quality,” “one-dimensional quality,” and “attractive quality.” “Expected quality” represents product or service characteristics customers expect and usually take for granted. “One-dimensional quality” depends on whether or not a customer’s wants are met after the customer has expressed his or her wants. “Attractive quality” consists of features customers do not know about in advance and, therefore, do not expect. (1) “Attractive” quality is perceived as extra value given to the customer, and this seems to be required to recover customers from major service failures.
The purpose of this project was to research service recovery quality.
This study applied the Kano model of customer satisfaction to determine customer perception of service recovery quality and to determine how much extra value must be given to the customer to keep customer loyalty.
Data about customer perceptions of service recovery were collected from service customers via a survey instrument. Respondents were presented with one of two scenarios in which a service failure occurred. The scenarios represented two magnitudes of service failure. The first scenario represented an average service failure, and the second scenario was an emotionally charged, or major service failure. Two recovery scenarios were attached to each service failure.
Four customer perceptions of service recovery quality were measured in this research. The four perceptions were 1) Customer satisfaction (meeting or exceeding expectations, 2) Customer perception of recovery quality, 3) Customer loyalty, and 4) Customer recommendations.
Surveys were collected from fifty respondents. Twenty-five had minor failures, and twenty-five had major failures. Half of each group had average recovery, and half had “super” recovery. No differences were found between groups (major and minor failures) with the same recovery. For this reason, these research groups were combined.Four univariate analyses of variance were also performed. One analysis was done on each customer perception construct. With an alpha of .05, there were significant differences between groups on all four constructs. See figure 1.
This research shows that the type of recovery following a service failure influences the recovery on customer satisfaction and loyalty to that business. Also, the extent of recovery effort influences how customers perceive the quality of a business and whether or not the customer would recommend that business to others. In general, the more operational recovery a firm delivers, the more likely the firm is to have a positive effect on the four variables examined in this research.
- Costin, Harry. Readings in Total Quality Management. The Dryden Press, 1994.
- Ross, Joel E. Total Quality Management: Text, Cases, and Readings. St. Lucie Press, 1995.