Three outcomes of service recovery

Robert B. Johnston · Stefan Michel

176 citations0/0 files storedInternational Journal of Operations & Production Management

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Customer Service Quality and Loyalty Service and Product Innovation Customer churn and segmentation

Abstract

Purpose Based on a review of the literature, this paper sets out to suggest that an organisation's service recovery procedures lead to three distinct outcomes; customer, process, and employee recoveries. The objective of the paper is to investigate the impact of service recovery procedures (i.e. the way service recovery is managed and executed) on these three outcomes and their relative impact on an organisation's financial performance. Design/methodology/approach A model, linking recovery procedures to the outcomes of recovery and financial performance, is tested using empirical data from a detailed survey of 60 organisations in the UK. Findings It would appear that many organisations and academic researchers have focused their efforts on customer recovery and have, to some extent, ignored the potentially higher impact outcomes of process and employee recovery. The main finding was that service recovery procedures have a greater impact on employees and process improvement than on customers. Furthermore, while many organisations appear to be concerned with service recovery few seem to be good at it or gaining the benefits of recovered customers, improved processes or recovered employees. Research limitations/implications This paper tries to encourage wider research into the impact of service recovery. The main limitations were sample size and selection. Practical implications It challenges the way some organisations have focused their recovery procedures on satisfying or delighting customers and suggests that by doing so they are missing out on substantial benefits. It also suggests that many organisations have a long way to go to develop their recovery procedures. Originality/value This work proposes three outcomes of service recovery and finds that the impact of process and employee recoveries may be more significant than customer recovery.

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References

1990Zero defections: quality comes to services.1990The Service Encounter: Diagnosing Favorable and Unfavorable Incidents 1998Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing 1995Total quality management as competitive advantage: A review and empirical study 1992Marketing Services: Competing Through Quality 1985What is total quality control the japanese way 1995Return on Quality (ROQ): Making Service Quality Financially Accountable 1990The profitable art of service recovery.

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2018Service failures and recovery in hospitality and tourism: a review of literature and recommendations for future research 2012Remedy or cure for service failure?2021Exploring customers' responses to online service failure and recovery strategies during Covid‐19 pandemic: An actor–network theory perspective 2012The Impact of Process Recovery Communication on Customer Satisfaction, Repurchase Intentions, and Word-of-Mouth Intentions 2009The effects of service failures and recovery on customer loyalty in e‐services

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