Ryan Jeffery Walker and Dr. Kristie Seawright
Unlike manufacturing, zero defects are impossible to achieve in service management due to varying expectations of interpersonal communication and/or customer contact. Recognizing that service failures will occur, effective service managers design recovery elements into their service delivery system. Service recovery is the set of activities designed to recover customer loyalty after they have suffered a service failure.
Current research suggests the existence of a service recovery paradox: a customer’s level of satisfaction and loyalty toward a service provider can actually become higher following a service failure and a successful recovery than it was prior to the service failure (Oliver, 1997). Yet, other research does not support these results (Maxham, 2001). Current research only examines post recovery levels of loyalty and satisfaction without determining the customer’s pre-failure attitude. This study provides partial resolution of the service recovery paradox by comparing post recovery customer attitudes with their pre-failure attitudes.
This research, based on controlled experimental design, has assessed customer attitudes toward a service provider relationship. Each respondent was randomly given either a positive or negative description of an airline. After reading the description, the respondents were asked to rate their level of satisfaction and loyalty toward that airline. Subsequently, the respondents were randomly given one of three service failure scenarios, followed by one of six randomly selected service recovery scenario treatments. A sample size of 31 respondents was used for each of the 36 different surveys. Post recovery data was collected to assess service recovery success. Post recovery data was then compared to pre-failure data to determine whether or not a service recovery paradox exists. The use of written scenarios, such as those used in this study, is well documented in the service management literature.
The service recovery scenarios used in this study varied by service recovery treatment and the criticality of the failure (low, medium, and high). Several elements of service recovery have been identified in the literature; research indicates an expectation that combinations of service recovery elements impact service recovery success. Criticality, or importance of the failed service, impacts the levels of recovery elements required for successful service recovery.
Paired t tests comparing the differences between pre-failure and post recovery satisfaction and loyalty levels have been used to analyze the collected data.
Results & Conclusions
An analysis of the data produced by this study has revealed that a service recovery paradox can exist, but only under certain circumstances. When respondents had negative feelings about the airline prior to the service failure, a successful service recovery could raise their levels of satisfaction and loyalty above pre-failure levels. Hence, under these circumstances, the service recovery paradox does exist. However, the study also found that when respondents felt positively toward the airline prior to the service failure, even a significant service recovery effort could not raise their levels of satisfaction and loyalty higher than their pre-failure levels. Consequently, the service recovery paradox does not exist when a customer feels positively toward a service provider prior to a failure.
Although the service recovery paradox does not exist for those individuals who have a positive view of the service provider prior to a service failure and recovery, it is still possible for a service provider to restore its customers’ levels of satisfaction and loyalty to their pre-failure levels if a proper service recovery method is used. In this study, the most significant recoveries were achieved when the respondents were given a value added atonement, which means that they were made not only made whole, but were given something extra to compensate them for their inconvenience.
Due to the fact that it is much less expensive to keep current customers than to find new customers, it is also important to note that simply apologizing or showing empathy toward the customer without making the customer whole or providing a value added atonement after a service failure has occurred will likely lower customer satisfaction and loyalty and may result in lost customers. Consequently, service providers that are interested in maintaining satisfied customers should be prepared to at least make their customers whole and in some cases provide a value added atonement following a service failure.