Service Recovery
As the heading points out, it is almost impossible to eradicate
all failures, errors will inescapably occur. Companies do however the
possibility to avoid that customers develop negative emotions and
dissatisfaction, a notion called service recovery. Firms with the ability to
react when mistakes are made will therefore have much better chances to retain
profitable customers (Meuter &Michel, 2008). According to Miller et al
(2000) in (Meuter & Michel, 2008) service recovery and complaint management
both address services encounter failures, the different between them is that
complaint management is based on firms ability to react to a complaint when
mistake has been made, whereas, service recovery on top this also includes the
company’s ability to react on a mistake and please the customer before the
customer finds it necessary to complaint. Most customers are reluctant to
complaint. Therefore it is important with proactive service recovery efforts to
minimize negative outcomes such as loss of customers when mistake has been made
(Meuter &Michel, 2008). Another aspect companies must consider is that
service is situation specific (Boshoff & Leong, 1998). That means that
companies cannot rely on good records, it must perform at its best when it
comes to a specific situation of service recovery.
Otherwise the situation can turn the other way around
and the good record can instead become a bad record. At Cresta Group of Hotels
General Managers of each hotel is responsible to resolve the customer complaint
issues. There is an escalation that could be done in the event the customer is
not satisfied with the complaint resolution at the hotel. The complaints are
further escalated to the Group’s Operations Manager who is based at the Group’s
headquarters in Gaborone.
How will
service recovery benefit Cresta group?
References
Meuter, M. L., & Michel, S. (2008). The service
recovery paradox: true but overrated. International Journal of Service
Industry Management. Vol. 19, No. 4, 441-457.
References
Boshoff, C., & Leong, J. (1998). Empowerment,
Attribution and Apologizing As Dimensions of Service Recovery. An Experimental
Study. International Journal of Service Industry Management. Vol. 9. No. 1,
24-47.
Mitchell. (2002). How to create communications
materials employees will actual use. Harvard business review, 80, (10), and 99.
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ReplyDeleteSome researchers suggest that a firm’s recovery effort can either reinforce customer relationships or compound the failure (Hoffman et al., 1995; Smith et al., 1998). Others suggest that over one-half of service recovery efforts actually compound the problem (Kelley et al., 1993). As such, it seems conceivable that poor service recoveries can cause consumers to rate failing firms lower after their recovery efforts than they rated the firms immediately following the failures. With a proper service recovery Cresta group will manage to persuade customers to become more emotionally loyal and spread positive word of mouth about their service.
ReplyDeleteKurtz and Clow, (1998) suggests that, irrespective of the efforts of service organizations to implement competitive strategies in to attract customers, and despite their efforts to manage supply, demand and productivity(with the goal of providing customers with more consistent, higher levels of services),customers do not generally, over time, stay loyal to the same organization, or return to it. With customer retention management approach (relationship marketing) helps organizations to build strong relationship with customers. These are the relationships on which enduring log-standing business success depends (Claycomb & Martin, 2001). Fornell and Wernerfelt, (1987) emphasized that marketing resources may be better spent on keeping existing customers than acquiring new ones. This was based on the assumption that existing customers are profitable and they cost less to keep than to replace. Firm’s therefore have to be aware of the profitability of not just their products but also their customers.
ReplyDeleteProcess recovery suggests that service recovery is more than retrieving a dissatisfied customer. It is important to use the information from the failure and its consequences to improve the organization. Businesses ought to focus more on management activity that improve systems and processes instead of just focusing on the single transaction of recovering one dissatisfied customer. Such improvements will make future customers satisfied and reduce costs for Cresta group (Johnston & Michel, 2008).
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