Since services are usually created and consumed through interactions between service personnel and customers, they are not always perfect: in other words, they sometimes fail in the course of their delivery. In this case, unless the service provider m...
Since services are usually created and consumed through interactions between service personnel and customers, they are not always perfect: in other words, they sometimes fail in the course of their delivery. In this case, unless the service provider makes a prompt and positive effort in compensating for any loss incurred for the customer, the image of the company will be tarnished and the profitability will eventually decline. Thus, it is critical to the success of a service firm to restore customer satisfaction and reinforce loyalty when such a failure occurs. Consequently, service recovery, or a firm`s actions in response to a service failure is attracting increasing attentions from academicians and practitioners alike. This research was performed to find out effective recovery strategies or tools for two types of services (utilitarian versus hedonic services) under different service failure situations (technical versus functional quality failure). An experiment was conducted where each subject read about a scenario which described a service failure situation and indicated the best recovery tool for that particular condition. The results of the study suggest that different strategies should be used for different types of services and failure conditions. The implications of the results for service providers are discussed.