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A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery

In today’s ongoing busy corporate world, organisations are facing more intense customer service pressures than ever before. When a service failure occurs, the organisation’s response has the potential either to restore customer satisfaction and reinforce loyalty or to worsen the situation and drive the customer to a competing firm.

Service recovery refers to the actions an organisation takes in response to a service failure. Recovery management is considered to have a significant impact on customer evaluations, because customers are usually more emotionally involved in and vigilant of recovery service than in routine or first time service and are often more dissatisfied by an organisation’s failure to recover than by the service failure itself.

Service failure as having two parts that can each affect the outcome of the perceived failure very differently, they are: type of failure and magnitude of failure. Recovery efforts of a failure are evaluated differently by the consumer depending on whether the failure occurred in the service outcome or in the service process. The study then goes on to show expectations that response speed will have a more positive effect on economic resources, whereas apology and initiation will most likely have a positive outcome for social resources.
Magnitude of failure theory based on social exchange and equity theories, the exchange process should involve the balance and equity of resources. This means that the magnitude of the failure should match the magnitude of the recovery resources received by the consumer. Consumers need different levels of recovery depending on the magnitude of the service failure they received. In order to achieve perceived justice the magnitude of the failure must be examined to determine the level of recovery required.
There are four service recovery attributes...