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Service recovery is an umbrella term for systematic efforts by a company to correct a problem following a service failure and retain a customer's goodwill. Service recovery plays a crucial role in achieving or restoring customer satisfaction. In every organization things may occur that have a negative impact on its relationships with customers. The true test of a firm's commitment to satisfaction and service quality isn't the advertising promises but in the way it responds when things go wrong for the customer.

Effective service recovery requires thoughtful procedures for resolving problems and handling disgruntled customers. It is critical for firms to have effective recovery strategies because under the following conditions even a single service problem can destroy a customer's confidence in a firm:

· The failure is totally outrageous (blatant dishonesty on the part of an employee)

· The problem fits a pattern of failure rather than being an isolated incident.

· The recovery efforts are weak, serving to compound the original problem rather than correct it.

· The risk of defection is high, especially when a variety of competing alternatives are available.

Complaint handling

Complaint handling needs to be seen as a profit centre and not as a cost centre. With the departure of a dissatisfied customer the firm loses more than the value of the next transaction. It may lose a long - term stream of profits and also any prospective customers he complains to. Hence it pays to invest in service recovery designed to protect to those long - term profits.

Service recovery paradox

It has sometimes been observed that Customers who experience a service failure and then have it resolved to their full satisfaction are more likely to make future purchases than are customers who have no problem in the first place. It has sometimes been true of the first service failure, but after the second customers has been disillusioned. Hence, this has not been not proven universally true.

Components of effective service recovery systems

  • effective complaint handling
  • identify service complaints
  • resolve complaints effectively
  • learn from the recovery experience
  • take feedback from the customer
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14y ago

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