Service recovery

Last updated 19 September 2019

This post covers why all service businesses should have a service recovery process and also covers some aspects of how to achieve continuous improvement through the recovery process. I also look at the role of the apology, how to deal with difficult customers, the importance of allowing mistakes (as well as learning from them and fixing them) in service innovation, and finally, I critically analyze an incident on a Jetstar flight and discuss some complexities in service recovery.

In the introduction, there are several key aspects of the service recovery process.

1. Failure will occur in complex service process delivery. Every failure is a promise not kept. If a promise is not kept then there is a perceived 'moral lack' in the organisation. Another way to look at service recovery is as a way to repair a relationship that has gone wrong.
2. Service recovery is part of a continuous improvement process.
3. Seek complaints in order to collect information about processes in order to improve them.
4. Seek complaints as learning opportunities.
5. Paradoxically an organisation needs to aim for fault-free processes, but they should also have a culture where mistakes are allowed. Without mistakes, learning cannot occur.    
6. Well-solved complaints will delight the customer and cement their loyalty.

The impact of dissatisfaction

If dissatisfaction occurs in service delivery two main things can happen: either the customer takes action about their dissatisfaction, or they don't. 

Johnston and Clark (2008). Service management. Improving service delivery.  Pearson: London. 

It might seem that the second option, 'no action' is the best option for the firm, but this is not the case. If someone takes 'no action' they are likely to not go back and then you never have the opportunity to understand what when wrong from their point of view. In the action options, both actions of public and private action are not necessarily damaging. Actually, seeking direct redress from the firm is probably the best possible outcome, because at this point the business has the opportunity to recover from the service failure, with the accompanying possibilities of creating a more loyal customer through solving the customer's problem. Also, implementing service recovery in a timely way can help mitigate the effects of legal action and complaints to other agencies like private and governmental agencies and watchdogs.  The options of private action - stop buying the product and warning friends about the product or seller - are the two actions that a service business should curtail by making sure that they encourage complaints so that people feel confident and secure in telling a service where they went wrong.

The cost of dissatisfaction is graphically shown in the next figure:

Johnston and Clark (2008). Service management. Improving service delivery.  Pearson: London. 

You can see from this figure that the number of people told increases exponentially according to how dissatisfied a customer feels. One doesn't need too much imagination to realize that with social media like facebook and twitter the number of people that can be told about a poor experience can potentially reach the thousands and even millions. The mass media can also exacerbate a problem if it is not fixed immediately. Further on in this post, I discuss an example using Jetstar who took their time implementing service recovery after a drunk passenger urinated in the aisle of a plane. This story was taken up in the media and because of a huge story over several days.

The next figure shows what types of action people take based on levels of dissatisfaction.  Actions include telling friends, complaining, making a fuss, not use again, and dissuade others.

Johnston and Clark (2008). Service management. Improving service delivery.  Pearson: London. 

One striking issue from the graph above is the impact of word-of-mouth on return custom. "The average business only hears from 4% of their customers who are dissatisfied with their products or services. Of the 96% who do not bother to complain, 25% of them have serious issues. The 4% complainers are more likely to stay with the supplier than 96% non-complainers. About 60% of the complainers would stay as customers if their problem was resolved and 95% would stay if the problem was resolved quickly. A dissatisfied customer will tell between 10 and 20 other people about their problem. A customer who has had a problem resolved by a company will tell about 5 people about their situation" (Johnston and Clark, 2008).

Approaches to service recovery

The above statistics reinforce the need to have a robust service recovery process in place. Not only does a well-carried out service recovery process cement customer loyalty, but it also turns the word-of-mouth 'bad news' stories into 'good news' stories. A further point to remember is that service recovery is not a one-off process undertaken to fix mistakes. Serve recovery should be seen as part of a systematic continuous improvement process. Businesses should seek complaints so that they can see more clearly exactly what it is customers want and provide it. They can identify where systems are not working, and fix it. In addition, and is not often mentioned, service providers can identify whether or not they can actually meet needs. If there is a gap between expectation and perceptions that is leading to dissatisfaction and complaints then how can the gap be closed? Yes, the service provider can fix an error, but they can also identify if they need to train the customer more effectively to use a service, but also by other means like selecting customers more effectively.

Four basic service recovery approaches are used by service organizations. First, there is the case-by-case approach. In this approach, each customer’s complaint is dealt with individually. The downside to this approach is that other customers may perceive unfairness. The second approach is a more systematic response. Such an approach uses a protocol to handle complaints. However, there needs to be a prior identification of critical failure points and continuous updating. The third approach is early intervention to fix any problems before the customer is affected. And finally, the fourth approach is to substitute a service. In some cases, service providers will even recommend a rival firm to provide a service. The downside of this is that such a process may lead to the loss of customers. Airlines deal with this problem by developing strategic alliances so that if one airline is booked, the overflow is pushed onto another 'sister' airline. Hotels often do the same thing.  In reality, prevention is the best policy and organizations may use all four approaches depending on the level of discretion staff have to fix a problem.

Service recovery relationship to service guarantee

The relationship between service recovery and the service guarantee should be clear. The service guarantee provides a statement to the customer about what the service 'promises' to deliver. The service recovery process 'kicks into play' when the service guarantee level is not met. All guarantees should be unconditional, easy to understand and communicate, meaningful, easy to invoke and easy to collect. The Warehouse NZ is a great example of a retail organization with an excellent and well-understood service guarantee.  Although their returns policy webpage is quite complex, it is clearly understood by customers that The Warehouse provides a money-back guarantee. This guarantee drives a lot of business for The Warehouse because it increases customer confidence. 

Apologising as part of service recovery

"Sorry is the hardest word" is a common saying about human relationships. In service recovery, one has to get over one's difficulties with saying "I am sorry". Whilst saying this, it has to be acknowledged that apologizing is a fraught subject for many service organizations. I have recently written an online book about  Air New Zealand's apology to the families of the Erebus disaster. The post covers some basic principles about organisational apologising.

Successful apologies with technology and the role of apology in customer service innovation

One service recovery actions done using technology that I thought was good is from Little Moo:

Mistakes are part of innovation, and so it is important to recognise the role of mistake-making in creativity. The following video, with Richard Moross of Moo, refers to the above email and discusses how this mistake ended up as a point of innovation for this company.

Dealing with difficult customers and apologizing

Often customers get irate and angry. This video sets out 6 steps to deal with angry customers including the role of the apology in dealing with dissatisfied customers.   This video gives lots of really good advice about how to deal with dissatisfaction for staff that work in the front-line dealing with customers. Video covers the following tips: 

1. Apologise
2. Use diplomacy
3. Go into computer mode 
4. Be solution focused 
5. Show empathy
6. Thank the customer for giving you feedback

Critical worked example of service recovery by Jetstar

Let's look at a service recovery by using an example of a poorly managed service problem experienced by  Jetstar. The incident relates to a recent incident that was reported in the media about a young man who was so drunk he stood up and urinated in the aisle of a plane as it was traveling between NZ and Asia. In looking at this incident I am using a framework often used in communications analysis called 'The dramatistic pentad', which originated in the writing of Kenneth Burke. Basically, Burke argues that all human action is dramatic. He stated: "If action, then drama; if drama, then conflict; if conflict, then victimage”. In this framework, we use five aspects that help us describe and analyse the scenario. First, agents who are the people that perform the acts. Burke suggests that there are always rescuers, persecutors, and victims. Second, there is the act - that is what took place. Third, there is the scene or the background to the situation. Fourth there is agency, or the means and instruments the agent/s employ, and finally, there is the purpose or the motives that drive the act.

The particular incident is described in more detail in relation to these five aspects below:

1. Agent/s -  Inebriated passenger (Mr. X); Other passengers; Cabin crew

2. Act –  Inebriated passenger X stood up and urinated in the airline aisle. Passenger X was not following rules of appropriate conduct in an airplane. He was not violent or difficult. Just very drunk. The other passengers reacted with understandable disgust.  There are very strict rules of interpersonal engagement in economy class and sharing bodily fluids is not one of them. Because the incident occurred in economy class other passengers were immobile and unable to act. People remained/felt polluted/dirty for the remainder of the trip. The cabin crew did not react appropriately according to other passengers. Cabin crew facilitated some self-help clean-up (by giving passengers tissues). One cabin crew member reportedly giggled. Others apparently ignored the situation. There was a puddle and a scarf that was not cleaned.

3. Scene – The flight was a Jetstar flight to Auckland-Singapore. Place space is transient and liminal.
There is a temporary allowance of people to enter into each others' private space due to cramped conditions of economy flight. What little private space that was available was transgressed and made dirty.

4. Agency –  Interpersonal agency on the flight was used in that passengers and cabin crew entered into a series of communication events involving confrontation, appeals to disgust, outright complaints, humour, and denial. The media fastened onto the story after the plane had landed and passengers complained in public.  The media named and shamed the perpetrator. People had taken photos on the plane of the drunk passenger. The cabin crew was the focus of blame in the newspaper articles. Other victim disgust stories emerged of other similar incidents on other flights and there was a general venting about poor experiences on other Jetstar flights. Jetstar management then made a service recovery response. Staff were censured about the incident.  A public apology was made to customers and recovery package was awarded (upgrades etc.).

ž5. Purpose –  In terms of analysing this incident in terms of service recovery it seems clear that a number of processes could be put into place to minimise the chances of this type of thing happening again. What could they be? For management arguably their purpose was simply to dampen down an outbreak of vehemence against the airline. Although a service recovery process was undertaken, it was done late and there is some question about how meaningful the response was. 

Overall the point of a pentad approach is to analyse the relationships between elements so that an overall critical understanding of the incident can come through. For instance, it is not enough to simply describe the event using the five factors. The question is, overall who receives the greatest attention by the powerful rhetors (speakers) in this incident?  

My view is that the 'story' of this incident was not so much about a drunk young man on a flight but about relationships between passengers and cabin crew in economy class, and the relationship between cabin crew and management. Economy class passengers felt immobilised and powerless during their long transit. They mainly blamed cabin crew for lack of action to relieve their discomfort; they are the closest to them after all. Customers could not escape the situation and so sat for hours steaming over their problem. Once out of the plane passengers went straight to the media who then exacerbated their outrage by promoting a victim-perpetrator-rescuer story made all the more powerful because of its central message of pollution. The public response to censure staff and reward passengers did not actually get to grips with the basic problem on these flights - passenger and staff dis-empowerment. In the end the media story ended up being the 'tail that wagged the dog'. This is what the service recovery process focused on - the visible symptoms of hidden underlying issues. Service recovery should focus on the underlying causes and respond to those. 

Management's response* should be to examine their internal processes and think about how to stop this incident from happening again. This is their role - process management.  Yes, stopping further negative publicity is important, but more important is to look at internal procedures. First, tighten up on drunk passengers getting on the plane in the first place (manage the customer). Second, knowing that passengers are immobilised and staff frantically busy all the time on full economy flights, how can this type of incident be stopped? Train crew to respond more appropriately is another action. Training customers to respond is another. Empower staff to respond with appropriate things they can do to resolve a situation, like moving passengers into other seats. Perhaps enabling better communication between flight and ground crew so that recovery can be implemented as soon as the plane lands would be something else.   

Whatever the service recovery approach used, it is important that Management take responsibility for the incident and that the tendency to blame the customer or front-line staff is subdued. Recovery is appropriate and important but the focus should be on learning from the incident so that processes can be improved; this is management's responsibility.

* These issues could have been addressed in Jetstar's internal review processes so this post is not meant as a criticism of Jetstar or management.