CHAPTER 6 :

UNDERSTANDING
SERVICE RECOVERY

DR. MUHAMMAD HAFIZ

ABD. RASHID

FACULTY OF BUSINESS &

MANAGEMENT
 CONTENT
■ Service recovery.
■ Service breakdown.
■ Causes for service breakdown.
■ What customer expect during
service breakdown.
■ Service recovery framework.
■ Approaches to service recovery.
■ Roadblocks to service recovery.
■ Service level agreement (SLA)
 INTRODUCTION

“It’s solving customer’s problem or complaint and

sending him out the door feeling like he has just done
business with the greatest company on earth. It’s
taking an unhappy customer from hell to heaven in 60
seconds or less.” - John Tschohl, President of Service
Quality Institute, USA.
 SERVICE RECOVERY

Occurs when an organization or service

provider is able to solve a customer problem,
make restitution, and regain trust following a
breakdown in service delivery.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 350.
 SERVICE BREAKDOWN

Happen whenever the product or service delivered fails

to meet customer expectations.
In some cases, the product delivered may function
exactly as it was designed, but if the customer
perceived that it should work another way, a
breakdown occurs.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 351.
Examples of Service Breakdown
• Hotel bedroom is not available when
customer arrives.
• A car repair is not completed at the time
promised.
• A waiter serves a meal not containing
ingredients expected by customer.
• Additional cash counter is not opened even
though there is a long line of customer to
make a payment.
• A garment sent to laundry return with
broken buttons and cannot be worn.

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 351.
 CAUSES FOR SERVICE BREAKDOWNS

ORGANIZATIONAL FACTORS
Human resources
Organization and structure
Processes and procedures
Internal communications
Technological support systems
Standards
Product, service design and delivery

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 355
 CAUSES OF BREAKDOWNS
EMPLOYEE FACTORS
Communication skills
Knowledge
Attitude
Technical skills

CUSTOMER FACTORS
Failure to use
information correctly
Failure to follow through

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 356.
 WHAT CUSTOMER EXPECT DURING
SERVICE BREAKDOWN
1. Apologizes
– Don’t make excuses
– Show remorse
– Listen
2. Take immediate action
– Offer service options
– Do your best
– Keep customer informed
– Positively resolve
3. Show compassion
– Show trust
– Deal with emotions/feelings
first
– Demonstrate empathy
Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 361.
 WHAT CUSTOMER EXPECT DURING
SERVICE BREAKDOWN

4. Provide compensation
– Equal to customer’s loss
– Offer before customer request it
– Give additional value
5. Follow-Up
– Within days after resolution
– Telephone call
– Face to face

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 361.
SERVICE RECOVERY FRAMEWORK
 Pre-Recovery Phase
The pre-recovery phase begins with the service failure and lasts until
the provider becomes aware of the failure, a period which may last a
very short time (seconds) or a fairly long time (weeks or months). The
customer formulates expectations for service recovery during this
phase.

■ Customer commitment / loyalty

– It may seem that higher expectations may make it more difficult to
recover from a failure, but customers with no expectations of
recovery may just leave and never return, while loyal customers
may give the business an opportunity to recover.

■ Service quality
– The higher the perceived service quality, the higher the service
recovery expectations.
 Pre-Recovery Phase (Cont’)
■ Failure severity
– The severity of the failure may increase the service recovery
expectations. The cost required to compensate for and mollify
customers may vary tremendously for differing failures.

■ Service guarantee
– Customers expect a company to live up to an expressed
guarantee stating the procedures which will be followed if a
specific failure occurs. The presence of a guarantee may also
raise recovery expectations.
 Immediate Recovery Phase
■ The immediate recovery phase begins when the
provider becomes aware of a failure and concludes
when fair restitution has been made to the customer.
■ Efforts during this phase should focus on providing
prompt, fair restitution to the customer.
 Immediate Recovery Phase (Cont’)
■ Psychological
– Psychological recovery efforts make a direct attempt to ameliorate the
situation by showing concern for the customer's needs.
– Two psychological techniques - empathizing and apologizing.

■ Tangible
– Tangible recovery efforts offer compensation for real and perceived
damages.
– The primary intent is to provide fair restitution for the costs and
inconveniences caused by the service failure.
– A secondary intent may be to provide value-added atonement where
the customer is given more than the fair remedy to atone for a bad
experience. A study found that 91% of subjects who received a “little
extra” after a service failure intended to stay loyal to the company.
 Immediate Recovery Phase (Cont’)
■ Front-line empowerment
– If service employees have the knowledge and power to
compensate a dissatisfied customer for a service failure, it
is more likely that a dissatisfied customer will become
satisfied and retained.

■ Speed of recovery
– Service failure is more likely to reach a successful
resolution if the problem is solved promptly. They assert
that the ideal is to identify and to solve the problem before
the customer becomes aware of it.
 Follow-Up Recovery Phase
■ The follow-up recovery phase begins after the
customer has received fair restitution. Follow-up
recovery may or may not be necessary depending
upon the success of the immediate recovery efforts as
well as antecedent factors such as the severity of the
failure.
■ Components – Psychological and Tangibles (Refer to
Immediate Recovery Phase)
APROACHES TO SERVICE RECOVERY

Safe your service

Welcome & encourage complaints

Act quickly

Treat customers fairly

Learn from recovery experiences

Learn from lost customers

Services Marketing: Integrating Customer Focus Across the Firm. Valarie A. Zeithmal & Mary Jo Bitner. 3 rd Edition. Page 198.
 APROACHES TO SERVICE RECOVERY

■ Safe your service

– Do it right the first time! As a result, customer get what they expect &
the costs of redoing the service can be avoided.
– Create a culture of “ZERO DEFECTIONS”.
■ Welcome & encourage complaints.
– Complaints should be anticipated, encouraged & tracked.
– Make the process to complain as simple as possible.
■ Act quickly
– Take care of problems on the front line.
– Empower employees. Employees must be trained to solve problems as
they occur.

Services Marketing: Integrating Customer Focus Across the Firm. Valarie A. Zeithmal & Mary Jo Bitner. 3 rd Edition. Page 198.
 APROACHES TO SERVICE RECOVERY

■ Treat customers fairly

– Customers expect to be treated fairly in terms of the outcome, process
& the interpersonal treatment. (Refer to Chapter 2).
■ Learn from recovery experiences
– Problem resolution are more than just opportunities to fix flawed
services & strengthen ties with customers.
– By conducting Root-Cause Analysis, manager can identify the sources of
the problem & modify process.
■ Learn from lost customers
– Learn from the customers who defect or decide to leave.
– This is essential for preventing the same mistakes & losing more
customers in the future.

Services Marketing: Integrating Customer Focus Across the Firm. Valarie A. Zeithmal & Mary Jo Bitner. 3 rd Edition. Page 198.
 ROADBLOCKS TO SERVICE
RECOVERY
• Not listening
• Lack of respect
• Poor/inadequate
communication
• Inadequate or outdated
materials/equipment
• Lack of training
• Work conflicts

Customer Service: Building Successful Skills for the Twenty-First Century. Robert W. Lucas. 3rd Edition. Page 365.
 Service Level Agreement (SLA)

■ SLA is a negotiated agreement

between two parties (customer and
the service provider).
■ SLA is a part of a service contract
where the level of service is formally
defined.
■ SLA records a common understanding
about services, priorities,
responsibilities, guarantees, and
warranties.

Retrieved from: http://en.wikipedia.org/wiki/Service_level_agreement

 Common Metrics of SLA
Numerous service performance metrics used in SLA:

■ABA (Abandonment Rate): Percentage of calls abandoned while

waiting to be answered.
■ASA (Average Speed to Answer): Average time (usually in seconds)
it takes for a call to be answered by the service desk.
■TSF (Time Service Factor): Percentage of calls answered within a
definite timeframe, e.g., 80% in 20 seconds.
■FCR (First Call Resolution): Percentage of incoming calls that can be
resolved without the use of a callback or without having the caller
call back the helpdesk to finish resolving the case.
■TAT (Turn Around Time): Time taken to complete a certain task.

Retrieved from: http://en.wikipedia.org/wiki/Service_level_agreement

 CONCLUSION

■ Customers always expect and demand the best

services from us and will churn to other
sources/competitors if their needs are not fulfills.
■ Therefore, we must deliver them the best services in
solving their problem and give them something of
value so that customer will be loyal to us for life.
THE END………