The Service Recovery Paradox: Rising from the Ashes

When I first heard about this concept of “having a service failure could results a better customer satisfaction than not having a service failure”, I thought this is some kind of joke. However, I soon found that there are number of studies done on this topic. Interestingly, this paradox of service recovery is supported by many management theories such as expectancy-disconfirmation theory, script theory and commitment-trust theory. Therefore, it is worth to have a more serious look at the implications of this paradox.



No matter how we try to avoid them, service failures are a fact. This is simply because we cannot control all the factors around our business. Customers also aware of this fact and up to a certain extent they understand this possibility. However, they have certain expectations or desired outcomes after such a failure. If the firm can take some corrective measures, which deliver something beyond customer expectancy, then they tend to build a positive image of the firm.

In many cases, not only “what you do” is important but also “how you do” and “when you do” are important. In psychology, human behaviour patterns are called scripts, as they are very similar to what written scripts do in real life. The implication of this is that customers expect certain sequence of actions during a service delivery and they feel uncomfortable or inconvenienced if that sequence is broken. Therefore, a good service recovery not only delivers something beyond customer expectancy but also appreciate the consumer reactions during a change.

Confidence and trust are also major components of customer satisfaction. Customer builds confidence on a firm because not only due to the smooth deliver of the service but also due to the ability to rectify any possible service failures. When we do not have any service failures, customers have no clue what will happen if something go wrong. However, if we could address a service failure successfully, then customers no longer have to think about the outcome of any possible future failures, as they know that the firm is able to address it properly. Now they have better trust and confidence on the firm.

While having an excellent recovery may increase the customer satisfaction, there are many other factors moderating the outcome. A recent study identifies 5 such factors.

• The severity of the failure


• Prior failures


• Quality of past experiences (Past success experiences)


• Stability of the failure


• The effect of perceived control

If the severity of the failure is too deep then it is very difficult to win back the customer confidence. For instance, I received a simple apology when my laptop delivered few days later. It was ok as I already had my old computer to work on. However, I might felt differently if I was really depended on my new laptop.

The quality of experiences is also affects the success of a service recovery. If the failure is happening for the first time after a long quality service, then the customer tends to forgive the vendor. However, if there was plenty of service failures in past, then there will be relatively less affect on a good recovery.

Customer satisfaction after a failure is also affected by how they feel about the stability of the failure. If the failure seems to be temporary they feel less dissatisfy compare to the failure seems stable. For example, I was less dissatisfied when my internet connection was slow during a major upgrade of my ISP. However, I might get more dissatisfied if the slowness going to be there for a long time.

Customers also feel less dissatisfied if they see the firm is not responsible for the failure. For instance, I do not get angry on our public transport system if the bus came late few minutes on a rainy day. However, if the bus comes late every day things will change as I might think the transport department is responsible for that.

A recent research done by VP Magnini et. la. found that 80% of the time exercising a good recovery resulting the service recovery paradox. Further, a low severe failure has almost 3 times the chance of high sever failure for the paradox. The research also shows that previous good relationship is strengthening almost 73% of the time after a failure.

Finally, it is evident that the service recovery paradox has clear existence in many cases. However, we should realize that it has its own limitations and other factors, which might change the outcomes. Ultimately, it is all about having a good customer relationship by prioritizing their satisfaction rather than just firm’s short-term financial profits.

References

1. The service recovery paradox: justifiable theory or smoldering myth? Magnini, Vincent S., et al.Journal of Service Marketing, s.l. : Emarald, 2007.

2. Service Recovery Paradox: A Meta-Analysis. Matos, Celso Augusto de, Henrique, Jorgee Luiz and Rossi, Carlos Alberto Vargas. 1, s.l. : Sage, 2007, Vol. 10.