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Chapter 12 Fixing service problems.

Hospitality Principle:

Don't fail the guest twice.

You want your customers to tell you when you've screwed up, so that you can take care of the problem and take steps to ensure that it doesn't happen again--to them, or anybody. If they don't tell you they'll just walk away shaking their heads and they'll never come back. Worse, you're likely to alienate somebody in the future by doing exactly the same thing.

--Carl Sewell, Customers for Life

Do whatever is necessary to take care of guests.

--J. Willard Marriott, Jr., Chairman & CEO, Marriott International, Inc.

LEARNING OBJECTIVES

After reading this chapter, you should understand:

* How guests respond when the guest experience fails to meet their expectations.

* How organizations should respond when the experience fails to meet guest expectations.

* Why fixing service failures quickly--on the spot, if possible--is so important.

* Why positive publicity is so valuable and bad publicity so harmful.

* Why the recovery method for handling a service failure is so important.

* How to prevent, find, and recover from service failures.

* How to use the poka-yoke for avoiding problems during the service delivery process.

* How to learn from service failures.

* How guests evaluate the hospitality organization's recovery efforts.

* How to match the recovery strategy to the failure.

KEY TERMS AND CONCEPTS

bad-mouthing

distributive fairness

evangelist

interactive fairness

poka-yoke

procedural fairness

service failure

service recovery

terrorist

TERRORISTS AND EVANGELISTS

If your customer is irritated or angry about a service failure, fixing the problem is at least as important as getting it right the first time. Everyone expects that the service they've purchased will at least meet their expectations. In most cases, if that's what happens, then the customers have received what they wanted and will leave the experience satisfied. When you reserve a plane seat to New York, a dinner time at your favorite restaurant, or a hotel room at a distant location, you expect that the reservation will be honored when you arrive. Merely receiving the service that the organization is supposed to offer does not usually cause the guest to notice. What will get noticed, however, are the exceptions from what the guest expected. If these are positive exceptions, the organization creates a happy guest who remembers the wow experience with delight, comes back for more, and enthusiastically tells others about the great service.

In contrast are the occasions when the airline seat you reserved is gone, the restaurant didn't have your name on its reservation list, or the hotel had no rooms left when you arrived. These are the times when the organization failed to meet the guest's reasonable expectations. The guest will be dissatisfied at best. If the failure was severe enough, it turns the guest into the angry terrorist that every organization fears. A typical dissatisfied customer may tell eight or ten people about the problem. A terrorist may create a Web site and tell millions.

Exceeding expectations creates the apostles and evangelists that every organization hopes to have. Hospitality companies work hard to ensure that their guests have experiences so memorable that they can't wait to get home and tell all their friends and relatives about what a terrific time they had and how great the guest experience was. This positive wordofmouth advertising reinforces the company's favorable public image. On the other hand, all organizations know that failures are inevitable. Consequently, like all companies that seek excellence, the good hospitality organizations work hard to identify and train their people to fix the inevitable problems. Poorly managed hospitality organizations fail to anticipate failure. They incorrectly assume that the service will always be as perfect as it was intended, the service delivery system will always be flawless, and the service providers will do their jobs exactly the way they were trained every time.

Don't Fail Twice

Service failures can vary considerably across the dimensions of frequency, timing, and severity. A service failure can occur anytime during the single guest experience or across multiple experiences with the same organization. Since first impressions are so important, a failure occurring early may weigh more heavily than one occurring late. Big mistakes count more than little ones. The purpose of this chapter is to show the importance of fixing service failures, the reasons why failures happen, and the strategies available to recover from and avoid service failures. If the organization fails by not providing the expected guest experience in the first place, then not fixing this failure is failing the guest twice.

THE IMPORTANCE OF FIXING SERVICE FAILURES

Retaining customers by providing excellent service and avoiding or fixing service failures is essential to organizational success. Frederick F. Reichheld and W. Earl Sasser, Jr., showed that if a company can reduce its rate of customer defections (leaving the organization to go to a competitor) by only 5 percent, it can improve profits by 25 to 85 percent. (1) Fixing service failures is clearly one of an organization's most essential activities.

When a guest has a problem, one of three outcomes usually occurs. The problem is fixed and the formerly unhappy guest leaves the experience happy; the problem isn't fixed and the unhappy guest leaves unhappy; or the organization tries to fix the problem and only succeeds in neutralizing the unhappy guest. A happy guest leaves as an apostle who spreads legends about a terrific experience. An unhappy guest may leave as a terrorist who goes and tells many others about a terrible experience. A neutralized guest may leave and forget the whole experience and probably the organization as well.

In some cases, such as total service catastrophes, neutralizing the unhappy customer is the best that the organization can hope for. If the surgeon removes the wrong leg, the TV system in the sports bar quits working during the final game of the World Series, or the restaurant meal leads to food poisoning, the best the organization can do is to neutralize the dissatisfied customer. Indeed, some organizations have developed disaster plans to prepare their employees for such situations. Airlines have emergency teams for handling crashes, theme parks have quick-response teams for accidents, and hotels have fire teams for handling evacuations in emergencies. The team's primary responsibility is to handle the emergency, to put out the fire. But the good team will also provide aid and comfort to the customers affected by the emergency, in part to restore the customer's positive perception of the organization.

The Customer's Response to Failure

The unhappy or dissatisfied customer is the focus of the service recovery. An unhappy customer can do any one or a combination of three things.

Never to Return

First, the customer can leave vowing never to return. Since this angry customer is also likely to tell others about the experience, this is the worst outcome for the organization. Here, it not only loses the future business of the dissatisfied customer, it loses the future business of all those the customer tells. The main reason for empowering servers to provide on-thespot service recovery is to keep dissatisfied customers from leaving that way.

In a study that analyzed critical incidents during service encounters to identify the reasons for customers switching to other products or services, eight mutually exclusive reasons were identified. (2) Core service failures (mistakes, billing errors, service catastrophes) were the biggest reason people switched; they were mentioned by 44 percent of all respondents (noted by 11 percent as sole reason and 33 percent as one of two or more reasons). These include all critical incidents in which there were mistakes or technical failures with the service itself or delivery system. Service delivery failures attributable to negative employee attitudes or behaviors were the second largest category, mentioned by 34 percent of respondents. If employees were perceived as uncaring, impolite, or even rude, unresponsive or uncommunicative, unknowledgeable (as in inexperienced, untrained, inept, out of date), they failed. The third largest category of reasons people switched was unsatisfactory employee response to service failure (17 percent). When employees respond reluctantly, fail to respond with empathy or at all, or offer negative responses--for example, blaming the customer for service failure--customers understandably find those responses unsatisfactory.

Summing those percentages reveals that when customers switch from one product or service to another, they do so more than half the time because of the way they were treated or spoken to by employees. The people part of the delivery system let them down.

Complaints

The second thing a customer can do is complain to someone in the organization. A popular book on this subject is entitled A Complaint Is Your Friend. Good hospitality managers know that organizations should encourage guests to complain and thank them when they do. A complaint is a positive opportunity for the organization. It now has the chance to make an unhappy guest happy; it can turn the lemon into lemonade. Unfortunately, only 5 to 10 percent of dissatisfied customers complain. (3) R. L. Day and E. L. Landon found that only 20 to 35 percent of people complained about the most dissatisfying consumer experience they ever had. (4) To complete the bad news, according to the research of Stephen S. Tax and Stephen W. Brown, most of the relatively few customers who do complain are dissatisfied with how companies resolve their complaints. (5) These dissatisfied customers are twice as likely to bad-mouth the organization as customers who are satisfied by the organization's response to service failure. (6)

If guests can be encouraged to complain, the organization gets valuable information about where problems in the guest experience are located. The customers who return to the counter with uncooked hamburgers, or tell the server about their unhappiness with the slow service, or write letters to the hotel manager describing miscellaneous dissatisfactions may help identify problems in the service, the delivery system, or the personnel. At the same time, they give the organization the opportunity to fix the problems before guests tell others about their dissatisfaction. Unfortunately, according to Tax and Brown, "most firms fail to document and categorize complaints adequately," which makes learning from mistakes more difficult. (7)

Organizations would do well to encourage guests to complain, even teach them how to complain if necessary, then measure and follow up on complaint resolution. Guests who suffer service failures silently are more apt to leave without returning and to bad-mouth the organization than complaining guests are. (8) British Airways found that of customers experiencing service problems, only 50 percent stayed with the airline if they did not complain to BA personnel. But a full 87 percent of those who did complain stayed and did not defect to a competitor. (9) Some companies claim even stronger results from successful complaint resolution. They believe that, on average, 70 percent of their guests will stay with the organization if a complaint is resolved in the guest's favor, and that a full 95 percent will do business again if the complaint is resolved favorably on the spot. This is why the benchmark hospitality organizations empower their frontline employees to handle many complaints personally and in whatever reasonable way they see fit, rather than seeking the manager's authorization first. As Marriott vice president Roger Dow says, "The guest-contact employee is the only one close enough to the customer to recognize and evaluate a problem and make it right for the customer and keep that customer." (10) Hart, Heskett, and Sasser agree; they say, "The surest way to recover from service mishaps is for workers on the front line to identify and solve the customer's problem." (11)

Just as handling a complaint well can be to the organization's benefit, handling it badly or not at all can hurt badly. If a dissatisfied customer complains, and then finds that the organization can't or won't fix the problem, the organization has now failed that customer twice, and everybody the customer knows is going to hear about it.

As just one example, Marriott has committed significant resources in its hotels to soliciting guest comments about the Marriott experience. Making sure no guest leaves unhappy is obviously to the organization's advantage. Marriott knows the best way to do that is to seek out its guests' complaints before they ever leave the property. The TARP Study conducted for the U.S. Office of Consumer Affairs confirms the wisdom of this approach. The data strongly suggest that customers who complain are more loyal than those who do not and, further, that having complaints satisfactorily resolved increased their brand loyalty. (12) These customers were happier after being dissatisfied with service than before. Excellent organizations want their dissatisfied customers to complain.

Bad-Mouthing the Organization

The third thing an unhappy customer can do is to spread negative word-of-mouth about the company, telling everyone who will listen about the terrible experience. (13) If the negative experience was very expensive for the customer either financially or personally, the customer is even more likely to spread the bad word. The greater the costs to the customer, the greater the motivation to tell. If someone returns home after spending a lot of time and money flying to the Cayman Islands, staying in a hotel for a week, eating out, and paying admissions to various attractions, friends and neighbors are probably going to ask, "How was your vacation?" If it was a bad experience, the customer will make every effort to share that information with all who ask. The likelihood of anyone who listened to that person also spending the time and money to go to the Cayman Islands will be substantially diminished. Obviously, the more important the experience is to the customer, the quicker the customer will become unhappy when the experience does not meet expectations. The more unhappy a customer is, the more likely that person will complain, leave, and tell people about the experience.

The Value of Positive Publicity: Bad-Mouth vs. WOW

On the other hand, the value of a wowed customer who is an apostle for the organization is considerable. Picture a family coming back home from a Caribbean island that caters to tourists. They have terrific tales to tell their friends. Their experience exceeded their expectations. To have these apostles telling everyone they know about their great vacation is very much to the Caribbean island's advantage. This positive word of mouth has great value in not only influencing others to come to the Caribbean paradise but is equally effective in blunting negative word of mouth. If a potential customer hears strong testimonials about a guest experience from three trusted friends, disregarding a complainer will be easier.

Credibility

Word of mouth is important for several reasons. People who tell other people tend to be more credible than nonpersonal testimonials. (14) When your friend tells you a restaurant was bad, you no longer believe all the ads on television assuring you that the restaurant is a good place to eat. Not only is the information more credible but it tends to be more vivid. For either good or bad word of mouth, the richness of the detailed personal experience is more compelling than any commercial advertising.

Dollar Values

When the lost revenue of unhappy customers who don't return is added to the lost revenue of customers who now won't come because of the negative word of mouth, the unhappy customer has created an expensive problem. Over the customer's lifetime, how much potential revenue have you lost? Carl Sewell of Sewell Cadillac in Dallas calculates that each of his customers is worth $332,000 in lifetime sales, service, and referrals. (15) The figure seems large, but it does not take many Cadillacs to add up to it. Domino's Pizza estimates that over a ten-year period a regular customer spends about $5,000. (16) Club Med has calculated that one lost customer costs the company at least $2,400. (17) Although not everyone sells Cadillacs, pizzas, or resort vacations, every hospitality organization would benefit from taking the time to calculate the value of its long-term satisfied customers. Because that value is so high, hardly any recovery effort is too extreme.

These calculations can lead to some surprisingly large numbers for even a small business. To show how a restaurant might come up with numbers like these, assume that the restaurant wows its patrons so much that they come back once a week or only once a month and spend an average of $20 each time they come in. The total value of each wowed customer's business for the next five years would be $5,200 for the weekly customer and $1,200 for the monthly customer. That's a lot of money to throw away by ignoring a complaint about a bad meal. These numbers get even bigger when the number of other people a positive word-of-mouth guest could bring to your hospitality organization is added in. If our wowed guest tells an average of five others who likewise are wowed and tell five others each, the multiplier effect is enormous. Over the estimated life of a typical customer, this can add up to many thousands of dollars in potential revenues. The point of these calculations is simple. Positive word of mouth has great value, and negative word of mouth is extremely costly.

Unhappy customers are approximately twice as likely to spread negative word of mouth as happy ones are to spread positive. Research reported by Hart, Heskett, and Sasser showed that customers who have bad experiences tell approximately eleven people; customers who have good experiences tell approximately six. (18) Word of mouth used to be one-to-one. Angry customers used to be limited to writing letters to corporate headquarters or the Better Business Bureau, putting up signs in their yard, or painting "lemon" on the car. Now for a few dollars a month, anyone with an Internet account can establish a Web site to tell the world about any offending company. In this day of instant worldwide communication, a customer can praise or complain over the Internet to millions of people. The benefits of avoiding negative word of mouth or turning it into positive are obvious.

Worst-Case Scenario

When a customer is unhappy, the worst outcome for the organization is that the customer leaves vowing never to return, does not complain to the organization, switches to another service provider, and bad-mouths the organization. This dissatisfied customer has become a true terrorist for the organization. It has not only lost any future business from the customer who will never come back; it also has lost the business of the many people who will hear and be influenced by the negative word of mouth.

How the Recovery Is Handled

The organization trying to recover from failure can impress the customer positively or negatively. (19) Research shows that for both positive and negative service recoveries how the recovery is handled is more important to the customer than the original failure. (20) Following a failure, the organization can either end up much better off or much worse off, depending on the customer's reaction to the recovery attempt. A small problem can become a big problem if the recovery effort is halfhearted or misguided. And a big problem can be turned into an example of great service when handled quickly and effectively. In one study, the researchers discovered that the most important determinant of overall customer satisfaction was their satisfaction with those responsible for dealing with failure: the claims personnel. Whether or not the organization could recover from failure also had the largest impact on intention to repatronize the organization and intention to recommend it to a friend. (21) K. D. Hoffman, Scott W. Kelley, and Holly M. Rotalsky asked a restaurant's guests to classify service failures from 1 (minor mistake) to 10 (major mistake). For example, the two most serious failures were product defects (cold, soggy, raw, burnt or spoiled food; inanimate objects in food), which were rated 6.69, and slow or unavailable service, rated 7.05. Table 12-1 shows how the restaurant responded to failure, how the guests rated the restaurant's recovery strategy from 1 (very poor) to 10 (very good), and how effective the strategy was in terms of guests indicating that they would still patronize the restaurant. Obviously, doing nothing is the worst strategy (or absence of strategy) and recovery from failure by offering free food or a discount are the best. Although the organization should always apologize for its failures, an apology alone is seldom sufficient. (22)

The TARP Study

Data reported in the often-cited study done for the U.S. Office of Consumer Affairs, entitled "Consumer Complaint Handling in America" and referred to as the TARP Study, showed that customer loyalty can be increased through effective resolution of complaints. This study agrees with common sense that the way in which a service failure is handled influences the number of return visits by the customer, word of mouth, and satisfaction with the service experience. The influence can be positive or negative. The excellent hospitality organization does its best to ensure that the service-recovery attempt leads to a positive outcome.

Service Recovery: A Message to Employees

Whether the organization handles service failure well or poorly has one more important outcome: It tells the employees how committed the organization is to customer satisfaction. Employees need to know that this commitment is more than a slogan. How the organization finds and fixes its service errors is a loud message to the employees about what the organization truly does believe in. Let us say that the management of Hotel A is defensive about customer complaints and keeps them secret (though employees will hear about them), resolves complaints as cheaply and quietly as possible, and seeks people to blame for the complaints. The management of Hotel B, on the other hand, aggressively seeks out and fixes service failures. It disseminates findings about complaints and failures to employees, makes quick and generous adjustments for failure, and seeks solutions rather than scapegoats. Which organization's employees will give guests better service?

SERVICE FAILURES: WHERE AND WHY

Where They Happen

Though some moments of truth are especially susceptible to failure, an organizational failure to meet the customer's expectations can occur just about anywhere in the guest experience. The service product may be inadequate or inappropriate or fail in some other way to meet the customer's expectations. The ordered hamburger may not look like the one advertised on TV that attracted the customer to the burger stand, or it may be uncooked, spoiled, or just not as good as the customer expected; a service failure is the result. The inanimate part of the delivery system can also fail. If the burger took an hour to get to the customer or the line at the burger stand wasn't managed properly, the system itself may have failed. The people part of the delivery system can certainly fail. If the burger-stand counter person is unfriendly, inept, poorly trained, or rude, then the experience will not likely meet the customer's expectations. Finally, there can be a failure in the environment or setting if the customer feels that the ambient temperature is too cold, the smell of food too strong, the rest rooms not clean, the parking lot unsafe, or if twisting pathways or unclear directional signs lead to the customer's becoming confused or lost. These points of possible failure all must be managed to ensure that the service experience meets and, hopefully, exceeds the customer's expectations.

Degrees of Failure and Recovery

Service failure comes in degrees, ranging from catastrophic failures that make newspaper headlines, to insignificant slip-ups, to those failures that the customer doesn't even know about. (Scott Gross argues in his book Positively Outrageous Service that even here the organization should apologize.) Along this continuum are an infinite range of service errors. Since the customer defines the quality of the service experience, the customer also defines the nature and severity of the service failure. Different customers can be very unhappy or just mildly unhappy about the same failure just as different customers can be very happy or mildly happy about the same service. Some service recoveries fix the customer's problems, and other recovery efforts make things much worse. Sometimes the best a manager can do is to neutralize the angry customer.

Customer Failure

One final source of failure is the customer. It's not always the hospitality organization's fault that the customer is unhappy. It may have done a perfect job of producing a terrific meal, but the diner simply didn't like the taste. Or the diner may have ignored the sign and set off the emergency alarm, or lost a set of keys or a child or money. Even though these problems were not created by the organization--and are beyond the organization's ability to manage no matter how much they train their people, perfect their systems, and refine their service--the organization should still address them.

The organization should also be ready to handle those failures that one guest causes for another--the diner who sneezes on another diner's food, the sports bar Red Sox fan who knocks down the Yankee fan, the inconsiderate passenger who cuts in front of others at the airline ticket counter, or loud talkers in a movie theater or concert hall. However, while doing everything in its power to rectify such situations, the hospitality organization should not admit liability for unfortunate, unavoidable occurrences that are not its fault. The Red Sox fan would probably have hit the Yankee fan in any venue.

It is simple human nature to attribute one's successes to oneself and one's failures to others. Hospitality organizations that want to keep guest-created service failures from destroying the guest experience and the guest's feelings about the organization build in strategies to help guests recover from their own failures so they can take a positive impression away from the service setting. Airlines have routines to help people who have lost their tickets complete their flights. Disney has routines to help parents who have lost their children in the parks find them again. The good organizations recognize the importance of helping guests solve the problems they create for themselves--without making them look or feel foolish or stupid while their tired children or spouse is looking on at the end of a long day in the park. They help these guests to go home happy in spite of themselves.

DEALING WITH SERVICE FAILURES

Three major strategy types are available for dealing with service failures. First are those strategies that seek to identify potential failures before they happen. These proactive or preventive strategies are built into the design of the service and its delivery system. Other strategies focus on the service delivery process while it is happening, particularly at critical moments. Third are the outcome measures. Most of these, such as SERVQUAL, will be covered in Chapter 13. While these outcome measures enable the organization to assess overall service quality, they can also identify service failures. The information generated by outcome interviews and surveys is invaluable for developing preventive and process strategies as well. In this chapter, however, we shall focus on strategies that are not dependent upon outcome measurements or customer-satisfaction surveys.

Preventing Service Failures

"A sandwich tossed is better than a customer lost." Arby's knows that preventing problems is easier and less costly than recovering from them. Preventive strategies are designed to avoid a service failure. As Mary Jo Bitner, Bernard H. Booms, and Lois A. Mohr put it, "The best way to ensure satisfaction ... is not to have a failure in the first place." (23) These strategies seek to identify and fix any trouble spots before they become a problem for the customer.

Forecasting and Managing Demand

For example, if a statistical prediction of the customer demand for a theme park on a particular day indicates that the park will be full, then a preventive strategy will lead to the park's management calling in full staff, preparing extra food supplies, and having available the full capacity of each attraction. Restaurants require reservations when the anticipated demand will be great. Having a reservation system means that customers will not be disappointed when they come to the restaurant to eat. In addition, the restaurant knows the number of diners it can expect so that it can staff appropriately and have sufficient amounts of preprepared items to ensure that the eating experience is enjoyable and trouble free. If the organization plans poorly, and people have to wait too long, their perception of overall service-experience quality declines rapidly, and a service failure results. "Good dinner, fair price, but I had to wait too long; overall, I'm dissatisfied with my evening at this restaurant." Keeping the wait down avoids that type of failure.

If the demand can be forecasted for a longer period of time, then other proactive strategies can be implemented. If demand for the next quarter or next year, for example, is expected to increase by 20 percent, then new capacity can be built, new employees hired and trained, and merchandise inventories can be increased to ensure that customers are not disappointed by long lines, unavailable souvenirs, or untrained and inadequate staff. Even if demand cannot be forecast accurately, employees can be trained to cope with major demand surges. Just as hospitals run disaster drills in conjunction with fire-and-rescue teams to prepare for unexpected, randomly occurring disasters, so can hospitality staffs be trained through practice to handle the unexpected.

Quality Teams

The popular use of quality teams is another preventive strategy. Get the people who are directly involved in the service experience together and let them identify the problems they have seen or heard about and then try to identify strategies that will prevent these problems from recurring.

Training

Adequate training of employees before they ever get the chance to serve a customer can prevent failures. Most restaurants have extensive training for their employees before opening a new restaurant. Olive Garden, for example, has all of its employees available at least ten days before an opening to allow plenty of time to familiarize the new employees with the Olive Garden menu, standards of service, product offerings, and each other. By the time a new Olive Garden opens, the waitstaff knows the products they are serving, the system for providing the Olive Garden experience to the guest, and the other members of the restaurant team. The people who deliver any service need to know exactly what the total experience should consist of and need to be motivated to ensure that the guest experience happens the way it is supposed to, every time, for every guest.

Simulation

Another approach to problem avoidance is to use analytical models to simulate all or part of the service delivery system or the service recovery process. Once a model, typically but not always a computerized model, is created to represent the customer/server interaction, the delivery process, or the entire guest experience, the manager and the servers can analyze a wide variety of different situations that might occur to see what impact each might have on the customer. On a simpler level, role plays and structured scenario simulations can help hospitality employees practice for all types of service failures and learn effective recovery strategies.

Performance Standards

The organization can prevent failures by setting specific performance standards. Some are partly preventive, partly process because the employees themselves can use them to monitor their own performance levels as they go through the delivery process. Some standards are purely preventive because they can be met before customers enter the door or the park.

For example, if a restaurant has reliable predictions of how many customers come in on the different days of the week, those predictions can be used as a basis or standard for the number of salads that should be preprepared. If the prediction is correct and the standard is met, the service failure "not enough preprepared salad" should not occur. Other examples of how performance standards can prevent failures might include annual hours of training required of service personnel, number of computer terminals to be purchased to serve anticipated demand, and number of banquet tables to be set up or other facilities to be available when the organization can reasonably predict what will be needed before the service experience ever begins.

Performance standards can also be a useful indicator to guests of what service level they can expect. For example, "We will try to resolve problems of types A, B, and C within two hours; we will try to resolve problems of types D, E, and F within one week." Or "If you leave a message on our help-desk voice mail, we will call you back within one hour." Many Ritz-Carlton guests know that phone calls should be answered within three rings, and that after a guest registers a complaint, a Ritz-Carlton employee is supposed to make a follow-up call within twenty minutes to be sure the complaint has been resolved.

Of course, some of these measures overlap. For example, we shall soon discuss outcome measures. If some results of those measures are used to prevent service failures in the future, then that use becomes a preventive strategy.

Poka-Yokes

The poka-yoke is a final proactive or preventive strategy for avoiding failure in the service experience and keeping it operating as flawlessly as possible. Conceived by the late Shigeo Shingo, a quality improvement leader in Japan, the basic idea is to make service quality easy to achieve and service failure difficult to achieve by inspecting the system for possible failure points and then finding or developing simple means to prevent mistakes at those points. To be sure that guests are served on a first-come, first-served basis and to discourage them from wandering all over the service setting, organizations can set up serpentine post-and-rope channels within which guests are to move forward until served. To ensure equity of service order and avoid disagreements, customers may be invited to "take a number." A surgeon's tray and a mechanic's wrench-set box may have a unique indentation for each item to ensure that no instrument is left in a patient or wrench in an engine. Shingo gave these failure-preventing devices or procedures the name poka-yoke (POH-kah YOH-kay), which means "mistake proofing" or "avoid mistakes" in Japanese.

Types of Inspections. Shingo distinguished three types of inspection; in the services industry, they would be successive inspection in which the next person in the service delivery system checks the quality and accuracy of the previous person's work, self-inspection in which people check their own work, and source inspection in which potential mistakes are located at their source and fixed before they can become service errors. Poka-yokes are used mainly to prevent these mistakes. An example of successive inspection is where the food server in a restaurant checks the food order assembled by the chef before taking it out of the kitchen. An example of self-inspection is the line cook personally comparing the prepared order against a picture of what the food display should look like before putting it on the service counter. An example of source inspection is the chef monitoring the preprepared foods--such as salads or boned chicken or whatever must be assembled in advance of the rush hour--to ensure that sufficient quantities of the items are available.

Warnings and Controls. Poka-yokes are either "warnings that signal the existence of a problem or controls that stop production until the problem is resolved." (24) A warning pokayoke would be a light that flashes when the fries are ready to come out of the fryer. It signals the operator to remove the fries before they become overcooked. A control poka-yoke would be a device that turns a microwave oven off whenever the door is opened.

Warning and control poka-yokes can be of three types. Contact poka-yokes monitor the item's physical characteristics to determine if it is right or meets a predefined specification. Some restaurants cut their meats on scales to ensure that each cut is the right weight before cooking. The second type of poka-yoke is based on fixed values. McDonald's knows that a certain poundage of fries must be put in the fryer to make the fries taste the way McDonald's wants them to. So they designed a prepackaged bag containing a fixed value of potato pieces to ensure that the right quantity is placed in the fryer every time. The third type of poka-yoke is the motion step. It is useful in processes where an error-prone step must be completed correctly before the next step can take place. A simple example is the pop-up temperature gauge found in many turkeys. If the red button doesn't pop up, the turkey isn't done to the right temperature, and the turkey cannot move a step forward for further preparation until it does. All poka-yokes should be simple, easy to use, and inexpensive. Something can go wrong at many points in most service delivery systems, so the poka-yoke is a useful concept in providing services.

Poka-Yokes for Customers. Trying to fix a problem once a customer has experienced it can lead to bad consequences for the organization, so any devices that can fail-safe the service delivery system or any part of it are extremely desirable. Customers add a further complication to the service delivery process: They are frequently right in the middle of it and often responsible for coproducing it. Poka-yokes must be included for them and for the delivery staff to prevent dangerous or unpleasant experiences.

Customers are irritated by a frequent fast-food service failure: leaving the drivethrough only to find that they were served the wrong order. To avoid these failures, Burger King has installed poka-yoke video displays, called order confirmation units, at its drive-through windows so customers can verify the accuracy of the orders they are about to receive.

Speed Parking. Here is an example of a poka-yoke designed to help customers avoid failure. The speed-parking technique, often seen at events where a lot of cars are arriving at the same time, has the cars line up and park in successive spaces under the direction of a parking attendant. Each row is filled before cars go to the next row. This parking method is fast; it keeps all cars facing the same way and in line to park in the next available space. The method has led to the creation of a poka-yoke at some theme parks and other large attractions. When guests stream into the park every morning, the parking attendant writes down the time each row is filled. When the evening comes and a family shows up lost and uncertain as to where the car might be, the attendant pulls out the poka-yoke--a list of what sections were parked at what time. The attendant asks the family about what time they arrived at the parking area, then uses the list to locate the car. The poka-yoke prevents a guest-caused failure that could have ruined the day's experience.

Process Strategies: Monitoring the System

Process strategies for finding service failures monitor the delivery while it is taking place, while it is in process. The idea is to design mechanisms into the delivery system that will catch and fix failures before they affect the quality of the guest experience. A supervisor can monitor telephone calls, a waitperson can check the food order against what is on the plate, or a machine can control the frying time of french fries to get them perfect every time. The advantage of process controls is that they can catch errors before or as they happen, enabling prevention or immediate correction before they affect customers.

Hard Rock Cafe, for example, hires an extra person to stand at the end of the food preparation line to match the order with what's on the plate, to catch discrepancies before the guest ever sees the order. Even though the traditional job description for waitstaff includes this checking responsibility, the extra person reduces the possibility of error even further. The Opryland Hotel in Nashville cross-trains some of its employees so that they can be called upon in peak demand times when the front desk is extra busy. If the lines get too long for the regular front-desk team, this "swat team" staffs extra computers to reduce the wait for the incoming or departing guests.

[ILLUSTRATION OMITTED]

Process standards provide employees with objective measures to monitor their own job performance while they are doing it. Specifying the maximum number of times the phone can ring before it is picked up is an example. Other illustrations include the number of times a server should revisit a table during the meal, or the number of people that can stand in line before the manager adds extra personnel to the check-in. These are all process-related measurements that allow the servers to minimize errors or catch them while the guest experience is underway.

Rusty Pelican Standards

Restaurants know guests value prompt service. Figure 12-1 shows an example from the Rusty Pelican Restaurant specifying the steps of food and cocktail service and the standards applied to each step. Because the servers themselves determined the standards, they were eager to monitor their own performance and try to meet or surpass them. Several benefits resulted. Service quality improved, increased server productivity meant that fewer servers were needed, which increased the tip income of servers, customers (to management's surprise) were willing to pay more to receive better service, and servers identified a couple of bottlenecks--potential failure points--that interfered with prompt, reliable service. Smoothing out those points improved service quality even more. (25)

The Complaint as a Monitoring Device

Preventive strategies can reduce the number of problems, but some will inevitably occur, and the organization cannot fix problems it doesn't know about. The research shows clearly that the most important process strategy is to get unhappy guests to complain while they are still in the guest experience. This is a more difficult challenge than one might think. While some guests are all too happy to complain, most are not. They are unwilling to take the time, or they believe that no one cares or will do anything even if they did complain, or they are too angry to say anything and just leave. Hospitality organizations must let their guests know they are receptive to complaints. Research on this issue has identified some important ways in which the organization can encourage its customers to complain.
Figure 12-1 Service standards at the Rusty Pelican. (Source: D. Daryl
Wyckoff. 1984. New Tools for Achieving Service Quality. Cornell Hotel
and Restaurant Administration Quarterly 25(3):158. Reprinted with
permission of The Cornell Hotel and Restaurant Administration Quarterly.
@ Cornell University. All rights reserved.)

Rusty Pelican service standards

Food-service standards

1. First contact--cocktail server speaks to customer
within two minutes of customer seating.

2. Cocktails delivered--beverage service at table
within four minutes of order. If no beverage order,
request for food order within four minutes of first greeting.

3. Request for order--within four minutes after beverage
service, customer should be asked whether he or she cares to order.

4. Appetizers delivered--salad, chowder, or wine delivered
within five minutes.

5. Entree delivered--entree delivered within 16 minutes of order.

6. Dessert delivered--dessert and coffee or after-dinner
drinks served within five minutes after plates are cleared.

7. Check delivered--check presented within four minutes after
dessert course or after plates are cleared if no dessert.

8. Money picked up-cash or credit cards picked up within
two minutes of being placed by customer on table.

Cocktail-service standards

1. First contact--greeting given and cocktail order taken;
seafood bar, happy-hour specials, and wine-by-glass menus
presented within two minutes.

2. Cocktails delivered-cocktails delivered within five minutes
after first contact.

3. Seafood bar delivered--seafood bar and happy-hour specials
delivered within seven minutes of first contact; ten minutes
for cooked items.

4. Next contact--check for reorder of cocktail, seafood bar,
customer satisfaction, and table maintenance within five
minutes from delivery of first cocktail.


[ILLUSTRATION OMITTED]

Encouraging Complaints

All service personnel should be trained to solicit complaints. Since many service problems involve server errors, getting the servers to solicit complaints about their own performance may be a challenge. The servers may see that mistakes are punished more heavily than catching errors is rewarded. Most people are less enthusiastic about admitting their mistakes than they are about sharing their successes, and the complaint strategy needs to accommodate this reality of human nature.

Body Language as a Complaint

Service personnel can be trained to read body language for clues to an unhappy guest. If a frowning guest walks by a Disney cast member, that person is supposed to inquire as to why "the unhappy face." Taking this initiative can elicit complaints that might otherwise go unmentioned. Food-service workers, hotel front-desk agents, and other people who interact directly with guests can also be trained to recognize the signs of unhappy people. Employees must also learn how to be receptive and sympathetic to the complaint once it is elicited. Guests must perceive employees as interested and concerned. If guests do not think anyone cares, they generally won't say anything.

Outcome Strategies

Outcome strategies identify service failures after they have occurred. It's too late this time, but maybe the problem can be fixed and future failures prevented.

Ask

The most basic outcome strategy is simply to ask the guest. The desk agent who asks about your stay as you check out is a good example. Other more systematic illustrations would include the 800 phone numbers, the "Tell me" program at Marriott, brief questionnaires at Carl Sewell's Cadillac dealership that customers can fill out when paying their bills, and the British Airways video booths at Heathrow Airport. Organizations should make unequivocally clear to customers that they want to hear about any problems. Studies show that whether customers seek redress of a problem or simply let it go is determined by their perception of whether or not the organization really wants to hear about it and will act on it. Even customers who are reluctant to complain are more likely to do so if they perceive that something will be done about the problem. (26)

Taking Action

Obviously, the more an organization depends on repeat business, the more critical it is for the organization to acknowledge and act on customer complaints. Some organizations report their complaint investigations back to complaining customers in detail, including information on what people were affected and what systems were changed. In that way the organization shows it is responsive to the customer's complaint and gives that person a sense of participation in the organization that may positively enhance loyalty and increase repeat visits. If the complaint shows the organization a flaw that can be corrected and if knowledge of the correction provides the customer with a sense of satisfaction for reporting the complaint, a true win-win situation results.

Numerical Outcome Measurements

Some numerical measurements that organizations take as a matter of normal procedure can point up real and potential service failures. A standard measurement in restaurants is average check size per server per shift. Though mainly intended to measure the degree to which the servers are selling the product, it also reflects in part how well they are selling themselves to the diners. If one server or one shift is well below the average, managers will want to look into that. Other examples of numbers that reflect service failures are complaints filed at the hotel checkout, statement errors at the country club, accident rate at the theme park, and late flights at the airport.

RECOVERING FROM SERVICE FAILURE

The organization failed. It got the guests in the door, and then it let them down. Now what? Hospitality organizations should train their employees to handle the problems when they find them. Their ability to solve problems creatively when the inevitable service failure occurs needs to be developed. Scenarios, game playing, video taping, and role playing are good ways to show them how to respond to an angry guest. Just as umpires can be trained to recognize balls and strikes through watching videos, hospitality personnel can be trained to recognize service errors and how to correct the failures they find.

Do Something Quickly

The basic recovery principle is do something and do it quickly. Strive for on-the-spot service recovery. Its many benefits are one major reason why benchmark organizations empower their frontline employees to such a great extent. The one answer a guest does not want to hear is, "I'll have to ask my manager." That's why a standing guideline for every Disney employee is: Provide immediate service recovery.

Here are three of the "Ritz-Carlton Basics" that appear on the Credo Card depicted in Chapter 2, carried by every employee:

* Any employee who receives a customer complaint "owns" the complaint.

* React quickly to correct the problem immediately. Follow up with a telephone call within twenty minutes to verify that the problem has been resolved to the customer's satisfaction. Do everything you possibly can to never lose a guest.

* Every employee is empowered to resolve the problem and to prevent a repeat occurrence.

How the problem came about or who caused it does not matter. Every employee is empowered to resolve it. The company backs up that statement; each employee is authorized to spend up to $2,000 to recover from a service failure and achieve guest satisfaction.

Management must empower employees with the necessary authority, responsibility, and incentives to act and act quickly following a failure. The higher the cost of the failure to the guest in terms of money, personal reputation, or safety, the more vital it is for the organization to train the server to recognize and deal with service failures promptly, sympathetically, and effectively. Of course, empowering employees to recover from failure will not be sufficient if recovery mechanisms are not in place. If the rest of the system is in chaos, empowering the front line won't do much good.

A necessary further step is that employees should inform their managers about system failures even if they initiate successful recovery procedures. If they don't, the problem may recur elsewhere.

Federal Express created the Golden Falcon Award to recognize employee initiative in service recovery. Winners not only get a pin to commemorate their success but also have an article published in the company newsletter about what they did. In addition, they get a telephone call from the chief operating officer and receive a few shares of the company's stock. (27)

All hospitality personnel should be trained to apologize, ask the guests about the problem, and listen in a way that gives guests the opportunity to blow off steam. Considerable research indicates that having the chance to tell someone in authority about the service failure and the problems it created is very important in retaining the guest's future patronage. This strategy is even more effective when the organization expresses its thanks for the complaint with a tangible reward, even if it is small. (28) Many restaurants will apologize to guests who complain about a longer-than-expected wait by offering a free dessert as a small recognition of their sincere regret for disappointing the guest. Some restaurants teach their servers to give the apology and the dessert even if the guest does not complain.

Benefits of Quick Recovery

A quick reaction to service failure has numerous benefits. Solving a problem up front instead of over time reduces the overall expense of retaining guests. The sooner the guest is satisfied, the more likely the guest will remain with the hospitality organization and the sooner will the organization benefit from the guest's repeat business. Fix their problems and most guests will come back. Fix their problems on the spot and they will almost certainly come back; they will also recommend the organization to their friends. Reward programs and incentives for employees who have done an especially good job of recovering from a service failure offer strong incentives to other employees while providing role models of the organization's commitment to service quality.

Ow! to Wow!

A Disney saying is, "Turn tragic moments into magic moments." The best hospitality organizations view a service failure as a great opportunity to create an unforgettable, outrageously positive response. If Bob Smith is upset that the hotel overbooked and his room is gone by the time he arrives tired and ready for bed, the hotel cannot only walk him to a nearby hotel with the price of the room paid but might consider upgrading his room from whatever he had reserved. The guest who was denied his standard room but got a paid-for night in a VIP suite at another hotel might readily forgive the hotel that denied him his room. The organization extended its hospitality to a guest, then failed the guest. It should go the extra mile and then some to repair the damage. The right failure-recovery strategy can turn an irate guest, ready to head for the competition, into a raving evangelist.

How Do Customers Evaluate Recovery Efforts?

Customers who have suffered a service failure and lodged a complaint want action. They use three criteria of justice to evaluate the fairness of the organization's corrective efforts: procedural, interactive, and distributive. (29) According to Tax and Brown, these three fairness dimensions explain 85 percent of the variation in customer satisfaction with how complaints are handled. (30)

Procedural Fairness

Procedural fairness refers to whether or not the customer believes company procedures for listening to the guest's side and handling service failure are fair and not a procedural hassle full of red tape. Circuit City believes that not giving customers the best value possible is a kind of service failure, so it will pay customers a refund plus 10 percent if they show they were not given the lowest price in the area on a purchased product. Customers feel this is a fair policy. Customers also want an easy process for correcting failures. They feel that if the organization failed them, it is only fair that the organization make it easy for them to receive a just settlement. Finally, they want a procedure that gives them an opportunity to express their feelings about the failure, an opportunity to show their side of the situation.

Interactive Fairness

Interactive fairness refers to the customer's feeling of being treated with respect and courtesy and given the opportunity to express the complaint fully. If the customer has a complaint and is denied the opportunity to state it to someone because the offending server is rude, indifferent, or uncaring, and the manager cannot be found, the customer will feel unfairly treated. A study of traffic-court offenders by Lind and Tyler revealed that many offenders whose cases were dismissed without a hearing were dissatisfied with the process and angry with the outcome, even though the dismissal was a favorable result for them. (31) Since they were denied their day in court, they were unhappy with the process. Common sense suggests and research shows that a customer who is encouraged to complain and is then treated with respect, courtesy, and given a fair settlement is more likely to repatronize the organization than one who was given a fair settlement but only with reluctance and discourtesy. (32)

Distributive Fairness

Distributive fairness, or outcome fairness, is the third test that customers apply to the organization's attempts to recover from failure. What did the organization actually give or distribute to the unhappy customer as compensation for the problem? If the guest complains about a bad meal and gets only a sincere apology because that's all company policy calls for, some guests will feel unfairly treated; somehow "We're sorry" isn't enough, in the guest's judgment, to compensate for the poor meal. Once again, it all comes down to meeting the guest's expectations. The issue is difficult because each guest is different. For many guests, an apology is fair enough compensation for most service failures. For others, nothing is good enough to make up for the problem or difficulty that the service failure created for them. Finding satisfactory compensation may involve methodical trial and error on the organization's part, but the easiest way is to ask the guest.

Some research indicates that customers feel more fairly treated when organizations extend options as compensation for service failure. (33) For example, a hotel could offer a disgruntled guest a choice of either a refund or an upgrade.

Characteristics of a Good Recovery Strategy

Hart, Heskett, and Sasser suggest that service-recovery strategies should satisfy several criteria. (34) First, they should ensure that the failure is fixed in some positive way. Even if the situation is a disaster, the recovery strategy should ensure that the customer's problem is addressed and, to the extent possible, fixed.

Second, recovery strategies must be communicated clearly to the employees charged with responding to customer dissatisfaction. The service people must know the organization expects them to find and resolve customer problems as part of their jobs.

Third, recovery strategies should be easy for the customer to find and use. Finally, they should be flexible enough to accommodate the different types of failures and the different expectations that customers have of the guest experience. The service-recovery strategy developed should always recognize that because the customer defines the quality of the service experience, the customer also defines its failures and the adequacy of the recovery strategies.

No Better Makes It Worse

A strategy that does not improve the situation for the complaining customer is worse than useless because the organization makes plain that it can't or won't recover from failure even when informed of it. The work of Hart, Heskett, and Sasser suggests that most recovery strategies are in serious need of improvement. More than half of organizational efforts to respond to consumer complaints actually reinforce negative reactions to the service. (35) In trying to make things better, organizations may make them worse.

Costs of Failure to Guests

One reason that customers view many recovery strategies as inadequate is that they do not really take into account all of the costs to the customer. Bad meal? Replace it. Theme park attraction broken? Give a complimentary one-day pass. Busy signal on the telephone line for airport information? Interject a recorded apology. The organization may think the relationship is back where it started. But for the customer many costs are associated with failures, and the effective organization will try to identify them and include some recognition of them in selecting the appropriate service recovery. After all, thinks the customer, the fact that the service failed is not my fault. Why should I have to wait on the side of the road for a long time because the rental car broke down? Why should I have to call back repeatedly to reservations because the airline messed up the original reservation? Why should I have to return to the restaurant because the drive-through people didn't get the order right?

Making It Right Not Enough

Customers clearly think that when failures occur, organizations need to do more than simply make it right by replacing it or doing it over again. Of course they should do that, but they should do more. For example, if the failed meal causes the guest to be embarrassed in front of a client or boss, then the recovery strategy must not only include compensation for the meal but some consideration for the guest's emotional outlays as well. If dad tells his family about the terrific time they are all going to have at a famous resort, uses his only week of vacation to go there, and spends all the extra money he has so carefully saved, he has a lot at stake. If the experience fails somehow to meet the family's expectations, dad loses his time, his money, and his credibility with his family. The outstanding hospitality organization systematically considers how to compensate guests for losses other than financial and takes extra effort to ensure that dissatisfied guests not only have their financial losses addressed in a recovery effort but also their ego and esteem needs addressed as well. They want dad to go home a hero to his family.

Being Wrong with Dignity

Even when the guests themselves make mistakes, good hospitality organizations help to correct them with sensitivity. That way guests leave feeling good about their overall experience and appreciating how the organization's personnel helped them redeem themselves. Imagine how depressed you would feel if you came back to the parking lot after a long day at an amusement park to find that you have lost your car keys and are locked out of your car. Then you see the park's "Auto Patrol" coming to your rescue. They even make you a new set of keys for free! Even though key problems are not its fault, the guest-oriented organization believes that the guest needs to be wrong with dignity. It knows that guests who are angry at themselves may transfer some of that anger to the organization. To overcome this very human tendency, guest-centered organizations find ways to fix problems so that angry, frustrated people leave feeling good because a bad experience has not been allowed to overshadow or cancel out all the good. By providing this high level of guest service, the hospitality organization earns the gratitude and future patronage of guests and enhances its reputation when such service successes are circulated to both external and internal customers.

Matching the Recovery Strategy to the Failure

A customer claimed that a Starbuck's store had sold him two defective coffee makers with a total value of $500, neglected to include a promised free half-pound of coffee, and treated him rudely. The customer was not satisfied by company apologies, replacement and refund offers, and gifts. His suggested recovery strategy was that Starbuck's take out a full-page ad of apology in the Wall Street Journal, give him a $2,500 coffee maker, and fund a shelter for runaway children. (36)

The best recovery efforts are those that match the failure. For example, if a restaurant is out of a certain menu item, compensating the guest with a "rain check" might be appropriate. If the failure is server inattentiveness, an apology by the manager would be a more appropriate response.

Categorizing the severity and causes of service failures might be a useful way to show the type of recovery strategy that a hospitality organization should select. In Figure 12-2, the y or vertical axis represents the severity of the failure ranging from low to high. The horizontal axis divides service failures into those caused by the organization and those caused by the guest. When severity is high and it's the organization's fault, the proper response is the red-carpet treatment, as in the case of a sold-out hotel transporting a guest with reservations to a fully paid, upgraded room at another hotel. The organization needs to bend over backward to fix this guest's problem and should consider trying to provide a wow level of recovery to overcome the negative feeling the guest will have after a failure so severe. The less severe problem caused by the organization would be illustrated by a server bringing to a guest a cold food item that is supposed to be hot. The solution here is to apologize and replace the item quickly. In a more elaborate restaurant, providing a complimentary dessert might also be appropriate. McDonald's has a policy that anyone bringing a food item back to the counter with the complaint that it is cold is immediately given an apology and a replacement item with no questions asked.

The two situations where the guest caused the failure provide terrific opportunities for the organization to make guests feel positive about the experience even though they them selves caused the failure. In a low-severity situation, a sincere apology is sufficient and will make the guest feel that the organization is taking some of the responsibility for a situation that was clearly not its fault. Indeed, some organizations will do even more, if the cost to make a guest feel better is not substantial. Many restaurants don't charge their guests for meals or items they don't like or want. Some photo developers have the same policy. The poor pictures may not be the developer's fault, but the customer feels good that the organization won't make customers pay for their own mistakes. The upper-right box represents situations where the problem is relatively severe and the guest or some external force created the problem. These are opportunities for the organization to be a hero and provide an unforgettable experience for the guest.

A Domino's delivery man showed up with pizzas at a house that was still smoldering from a devastating fire. The distraught couple standing in the front yard of their ruined house looked up at the delivery man with some annoyance, said they hadn't ordered any pizza, and wondered if the delivery person couldn't see that they were overcome by the tragedy. The delivery man responded that he knew; he had passed the house earlier, saw it burning, and had told his manager. The two decided that it would be nice to cook up some pizzas and just give them to these people in their hour of sadness. The company became a hero to the couple--customers who didn't even know they were customers.

Service Recovery: Good Business

According to the TARP Study, companies that invested in the formation and operation of units designed to handle complaints realized returns on the investment of anywhere from 30 percent to 150 percent. These results, and the other research reported in this chapter, suggest strongly that putting money and effort into service recovery is good business.

Lessons Learned

1. If the guest thinks you failed, you failed.

2. Fix their problems and most guests will come back; fix their problems on the spot and they will almost certainly come back.

3. Encourage guests to tell you about problems and failures; a complaint is a gift.

4. Train and empower your employees to find and fix failures.

5. Train your employees to listen with empathy.

6. Don't cause a service-failure problem and then fail to fix it. Don't fail the guest twice.

7. Find a fair solution, and know how guests determine what is fair.

8. Find ways to help guests fix problems they caused.

9. Unhappy guests will tell twice as many people about bad experiences as happy guests will tell about good experiences.

10. Even the best organizations fail a guest occasionally. Be prepared for failure; have a recovery strategy in place.

11. Find out and share with employees how much a dissatisfied guest costs you; that will show your staff the importance of recovering from service failure.

12. Empowerment works only if the system works; even an empowered employee can't recover from service failure without support from the system.

Review Questions

1. Recall a service failure during a guest experience of your own.

A. Describe the failure and your reaction to it.

B. Describe the organization's response to the failure. Did your reaction seem to affect the organizational response?

C. As a result of what happened, how do you feel about this organization now?

D. If you were not completely satisfied, what could the organization have done to satisfy you and perhaps cause you to be even more loyal to the organization than before?

2. If you ran a hospitality organization, how would you plan to recover from failure? Would you give employees a list of common failures and their corresponding acceptable recovery strategies, or would you empower employees to use whatever recovery strategies they saw fit?

A. Why is it important to try to fix the problem immediately?

B. What are the characteristics of a good service recovery?

C. One hospitality leader instructs employees to keep offering successively more significant remedies to failure until the guest smiles, then stop. Discuss this strategy.

3. Many service failures occurring during guest experiences at a hotel or at a restaurant can be predicted and fixed. Name two problems that the hotel and the restaurant probably cannot fix. What should the managers do if those failures occur?

4. Reflect on a recent hospitality experience in which you were involved, either as a guest or as an employee.

A. What poka-yokes did you see used to fail-safe some part of the experience?

B. Think of a new poka-yoke that might be added.

5. A guest in your organization starts an argument with another guest who has tried to cut into a waiting line.

A. Is this a service failure? If so, who or what failed? What should you as a manager do?

B. If, rather than starting an argument, the first guest punches the second guest, what should you as a manager do?

6. Assume that you used to work at the Rusty Pelican Restaurant but are now a hotel front-desk manager who wants to establish quantitative, measurable service standards for your employees, similar to those you used at the Rusty Pelican, regarding guest check-in and checkout.

A. Are the situations sufficiently similar that you could effectively use similar standards?

B. What standards would you establish?

7. Do you believe that a complaint is "a gift" from the complaining customer to the organization? If you have complained to organizations, has the reaction suggested that they believe you are presenting them with a gift?

Activities

1. Write a letter to a local hospitality manager complaining about a dissatisfying or failed service experience you have had, the more recent the better. Describe how the organization responded to your complaint. How does the organization's recovery effort correspond to the suggestions for recovery offered in the chapter?

2. Write a letter to a local hospitality manager complimenting a service experience you have had recently. Send a carbon copy to the company president. Report back on the results. Okay to name names in this one.

3. Be on the lookout for a service failure that others are experiencing. Observe and report how the organization recovers from the failure. Evaluate the recovery strategy based on the material presented in the chapter.

4. Divide into groups. For those who have been employees, describe service failures in which you have been involved. Had you been trained in how to recover from these failures? What recovery steps did you take? Pick the best service recovery and compare with the best of other groups. What lessons can be learned from these successful recoveries?
Case Studies

Pizza-to-Go

Bob Callahan led a very hectic business life consisting of hard work,
long hours, and eating on the run. Bob also liked pizza. It is
therefore no surprise that he did a lot of business with his
neighborhood Pizza-to-Go outlet. About once a week, just before leaving
work, Bob would call PTG, order a medium thin-crust pizza with olives,
sausage, and double anchovies, and pick it up on his way home. The PTG
people once forgot the sausage and once put pepperoni instead of
olives, but Bob forgave them and never mentioned these small slip-ups.
He could do with a little less sausage in his diet, and he liked
pepperoni almost as well as olives anyway. Besides, they never got the
anchovies wrong, and Bob's favorite part of the entire pizza experience
was the overabundance of anchovies swimming in mozzarella cheese.

Last week Bob got home from work and kicked back, ready to enjoy a beer
and some pizza fixed "his way." The pizza he took out of the box was
fixed somebody else's way; it was covered with olives, sausage, and
what looked like a double order of onions. Bob couldn't imagine what
kind of person would eat a combination like that. He called PTG
immediately. The phone was answered by Vito Cifrese, who had been
serving Bob regularly for about two years.

"Very sorry about that, Mr. Callahan. If you could just scrape those
onions off this one time, next time you come in I'll comp you your
regular order and I'll also throw in a small complimentary pizza with
double anchovies for free!" Bob thought that was a pretty fair
adjustment. He thanked Vito, scraped off the onions, and tried to eat
the pizza. But the onion flavor remained. Bob couldn't finish the
pizza; the combination of olives, sausage, and onion flavor was too
much for him.

That all happened on an early Monday evening. On Thursday of the same
week, Bob called in and ordered the usual, plus a small pizza with
double anchovies. When he got to Pizza-to-Go, Vito was nowhere to be
seen. Bob identified himself to the counter server who handed over the
two boxes. Bob explained that both items were to be "no charge" because
of an error that had been made on a previous order.

The server laughed and said, "I don't think so. Check that sign out
there. This is Pizza-to-Go. Pizza-for-Free is up the street."

Bob stayed calm and asked for Vito; he could straighten this out.
"Vito quit Monday night and said he never wanted to see another pizza."
"I've gotten one or two pizzas a week from you people for the past two
years. My name's Bobby Callahan. Check under my name in your database
and see if Vito left any special instructions."

"What database?" said the server.

Bobby gave up. He'd find another place to do business. "I'll just take
the small pizza with double anchovies."

"You don't want the big one?"

"That's right."

"Even though you called in for it? Well, we can warm it up for somebody
else, I guess, if anybody else wants a weird combo like olives,
sausage, and anchovies."

Bob paid without tipping, left, got home, grabbed a beer, turned on TV,
kicked back,  opened the box, and took out a small pizza covered with
onions.

1. Was service recovery called for in this situation?

2. If so, what recovery options would you have considered?

3. What should Bob Callahan do now?

Recovery to the Max

Ben Sharpless, manager of the tackle store at Farney Spa and Fish Camp,
had just finished explaining to new sales employee Max Gilley the
importance of getting and retaining customers, recovering from service
failure, and other basics of serving guests, whether they were
fisherfolk who also had spa privileges or spa patrons who wanted to do
a little fishing. About an hour later, Ben saw Max talking with regular
customer Sally Higgins. He thought he would monitor Max's sales
technique, so he moved to a spot where he could hear but not be seen.

Sally Higgins was saying,

"Max, I thought I'd fish down at the bend where you can see them
feeding on the bottom."

"Ms. Higgins, you don't want to fish for those little minners. You want
to put your bait about 30 feet out, where the big ones are. Here, what
about this Orvis reel with the matching graphite rod and tackle box
full of lures and other gadgets? I think that'll do the trick. But
fishing's even better on the other side of the lake early in the
morning. We've also got a fully equipped camping rig here that I can
let you use, with the tent, the stove, all the supplies you could ever
need.

You can camp out, turn in early, and be up and at 'em with the dawn."
Ms. Higgins agreed that it was a beautiful rig. Visions of huge trout
leaped in her mind. Visions of a big sale leaped in the mind of store
manager Ben Sharpless.

"What kind of car do you have, Ms. Higgins? A Mercedes 300-SL, isn't
it? This stuff isn't going to fit in there. We just received a
special-order Land Rover with matching trailer. You'll look good in
that, and you can haul all this camping and fishing equipment in the
trailer with room to spare. We could let you use that for a couple of
days."

Manager Sharpless was really impressed with Max's results. Max and
Sally finished the paperwork, Sally Higgins left, and Sharpless went to
Max Gilley to congratulate him on a big sale.

"Gilley, you're quite a salesman. I don't know if I would have loaned
her all that fancy camping equipment and the Land Rover, but that Orvis
rod and reel plus a fully equipped tackle box is a big sale, maybe
several hundred dollars, so I guess it's worth it."

Max looked puzzled. "No, Mr. Sharpless, you got it all wrong. Ms.
Higgins was just out for a walk. We started to talk, and she told me
the spa was busted. Uh-oh, I says to myself. Service
failure. I remembered what you told me: 'It costs several times as much
to get a new guest as it does to keep a present guest, Max, so when you
see any service failure, spa or fish camp, that service failure becomes
yours to correct. You own that service failure until it's fixed, Max.
And don't just fix it; go above and beyond. Anything we lose on that
transaction will be made up in future business for the spa and fish
camp. If we do lose money, what's the worst that can happen? We'll have
a satisfied guest.' Wasn't that about it, Mr. Sharpless?"

Sharpless said, "Yes, Max, you learned well, but ..."

"So I said to her, 'Since the spa is busted, why don't you go fishing?'
Then I gave her the fishing tackle and the tackle box but I only loaned
her the rest of the stuff. She seemed right happy, didn't she?"

Manager Sharpless sighed. "Max, if I hadn't been here, I guess you
would have given her the whole darn tackle shop."

1. What do you think would have been an appropriate adjustment for this
service failure? Or should a fish camp employee even be concerned about
a spa service failure?

2. How can organizations encourage their employees to take ownership of
service failures and try to fix them on the spot, without "giving away
the store"?

Days of Wine and Roses

Julius Mullinax was the long-time manager of the Finery Hotel, the
flagship hotel of an old upscale chain. On one particular evening, a
rare error had occurred in the front-desk area: a new desk agent had
assigned honeymooners Harold and Sylvia Solomon to the Tweed Suite, a
fully equipped executive area with computers, fax machines, and a stock
market ticker, instead of to the Honeymoon Suite they had reserved.
Mullinax noticed the error in time and quickly made the switch, about
an hour before the newlyweds arrived. When Mullinax showed the Solomons
personally to their penthouse suite, they were delighted to find on the
cocktail table a complimentary bottle of wine and a vase of
long-stemmed roses. Manager Mullinax smiled and said, "Most lodging
places try to hide their errors. The Finery feels that we should
compensate our guests for our mistakes, even if they would otherwise
never find out about them!" Mullinax left the Solomons too amazed to
respond.

When he got back downstairs, Mullinax saw an indignant couple talking
loudly with the desk agent. It seems that after checking in, George and
Bobbi Hulbert had come to their room only to find that it had not been
cleaned up after the previous occupants had checked out. Mullinax
apologized and told them,

"If you'll just have a seat here in the lobby, we'll have that room
cleaned up in five minutes." Still grumbling and complaining, the
couple found a place to sit and wait. When they got to their room,
there on a bedside table was a complimentary bottle of wine and a vase
of lovely roses.

Upon their arrival in the Grand Rotunda of the Finery, newlyweds Miguel
and Savina Rodriguez were impressed by all aspects of the hotel but
especially by the kindness and Old World gentility of the elderly
manager, Julius Mullinax. He insisted on showing them to their Lovebird
Suite personally. Just before the elevator reached the penthouse level,
the trio heard a loud snapping sound and the elevator suddenly jerked
to a stop. Then it dropped several feet and stopped again with a jolt.
Then, to the horror of the Rodriguez couple, the elevator compartment
plunged out of control down the shaft for what seemed an eternity. The
emergency system finally slowed the elevator, and it came to an
uneventful halt at the main level.

Mullinax offered to try again to take them up. "Second time lucky," he
chuckled. The terrified guests just stumbled out and ran to the bar for
a couple of stiff ones. When they went to their room later, still
shaking, there on a bedside table was a complimentary bottle of wine
and a vase of lovely roses.

1. What if anything was wrong with manager Mullinax's service-recovery
efforts? Were any  of these service recovery efforts appropriate?

2. If any efforts were inappropriate, which ones and why?

3. How does a manager determine what level of service-recovery effort
to employ?

The Hillsbrook Lodge

During the busy times of the year--ski season and the period when the
leaves turned--a portion of visitors to New England bed and breakfast
establishments sometimes made reservations at two or even three B&Bs.
They knew that some B&Bs customarily overbooked, and these guests
wanted to be sure they didn't end up after a long drive without a place
to stay.

The Hillsbrook Lodge followed the practice of the other bed and
breakfast places in its area. During those busy times of the year, the
Lodge customarily overbooked by 10 to 15 percent. At first, lodge
owners George and Audrey Spain didn't like to overbook; it seemed
dishonest somehow. But the other owners were doing it, and the

Hillsbrook Lodge couldn't afford to have anything less than 100 percent
occupancy during the two periods of the year that enabled them to get
sufficiently ahead financially to stay open during the leaner periods.
Things usually balanced themselves out; the Hillsbrook Lodge overbooked
by about 15 percent, and about 15 percent of the guests usually didn't
show up.

The B&B owners in the area had a cooperative service-recovery plan.
They networked and kept in touch, so that any owners finding themselves
facing guests whose reservations could not be honored could usually
make a few phone calls to find another acceptable accommodation for the
guests nearby. But supply and demand did not always even out, so
occasionally George and Audrey were in the uncomfortable position of
telling guests with reservations that not only did they themselves have
no room for the guests, but neither did anyone else in the area. Guests
did not usually take that news very well. But under the pressures of
the next day's activities, the couple forgot these incidents quickly.

When the prime autumn weekend for viewing the turning of the leaves
came, Audrey and George found that they were grossly overbooked. In
addition to the 15 percent overbooking that they had reluctantly agreed
to, they had each carelessly booked parties without the other's
knowledge. So by the middle of Friday afternoon, all ten Hillsbrook
rooms were taken, with several parties yet to come.

A fashionably dressed woman and a large man came into the Lodge,
announced that they were Bruno and Sophie Tattaglia from New York, and
asked to check in.

"Hi, Mr. and Mrs. Tattaglia. Can I call you Sophie and Bruno? Welcome
to Hillsbrook Lodge! We've got a little problem. More guests showed up
than we thought we were going to get, so since we operate on a
first-come, first-served basis, I'm sorry to say we're filled up. But I
think I can find accommodations for you at one of the other B&Bs
nearby. They're all quite fine."

Sophie Tattaglia protested, "But we had a reservation."
George said, "Well, unfortunately, a reservation doesn't always equal a
room on one of the busiest weekends of the year. Let me make some phone
calls and see what we can do for you."

George found accommodations for the Tattaglias about twenty miles away.
"They don't have quite the view that we do, but it's a nice place,"
said Audrey. The Tattaglia couple were not smiling but they seemed to
accept the situation. After they left, George said to Audrey,

"Well, that wasn't so bad. We recovered pretty well, I thought. I hope
these next people coming up the drive are as reasonable."

When Mr. and Mrs. Tattaglia got back to New York, they were still
irritated about the Hillsbrook situation. George and Audrey Spain had
thought about setting up a page on the World Wide Web to make more
people aware of the Hillsbrook Lodge, but they didn't really have the
time or the expertise. Mrs. Tattaglia was self-employed as a creator of
Web pages. It was easy for her to set up a Web page, available to
anyone in the world who had a computer and an Internet connection,
describing the Tattaglia experience at the Hillsbrook Lodge, soliciting
other stories of negative experiences with the Lodge, and urging
potential visitors to New England not to patronize the Hillsbrook.

1. Overbooking is common in some parts of the hospitality and travel
industry. Can you justify overbooking on ethical grounds?

2. Did the Hillsbrook Lodge have any alternatives to overbooking?

3. Once George and Audrey find out about the Hillsbrook page on the
Web, can you think of any service-recovery steps they might take?

The Road Warriors

Consolidated Airlines has determined that business travelers account
for 40 percent of its business in terms of head count but provide 72
percent of airline revenue. "Mile-collecting vacationers" make up 60
percent of head count but provide only 28 percent of revenue. The most
frequent business travelers, those the airline calls "road warriors,"
make up only 6 percent of passengers but provide a whopping 37 percent
of airline revenue.

Passenger complaints and survey results have revealed that the
passengers least satisfied and most frustrated with air travel are the
road warriors. The airline's best customers are most disappointed with
the airline's service. That situation obviously must change.

The airline has $400 million available to improve service to
passengers. How would you recommend that these funds be spent?


Additional Readings

Anderson, Eugene W. 1998. Customer Satisfaction and Word of Mouth. Journal of Service Research 1(1):5-17.

Andreassen, Tor Wallin. 1999. What Drives Customer Loyalty With Complaint Resolution? Journal of Service Research 1(4):324-332.

Bejou, David, and Adrian Palmer. 1998. Service Failure and Loyalty: An Exploratory Empirical Study of Airline Customers. Journal of Services Marketing 12(1):7-22.

Bitner, Mary Jo, Bernard H. Booms, and Mary Stanfield Tetreault. 1990. The Service Encounter: Diagnosing Favorable and Unfavorable Incidents. Journal of Marketing 54(1):71-84.

Blackwell, Steven A., et al. 1999. The Antecedents of Customer Loyalty: An Empirical Investigation of the Role of Personal and Situational Aspects on Repurchase Decisions. Journal of Service Research 1 4):362-375.

Boshoff, Christo. 1999. RECOVSAT: An Instrument to Measure Satisfaction with Transaction-Specific Service Recovery. Journal of Service Research 1(3):236-249.

Chu, Wujin, Eitan Gerstner, and James D. Hess. 1998. Managing Dissatisfaction: How to Decrease Customer Opportunism by Partial Refunds. Journal of Service Research 1(2):140-154.

Chung, Beth, and K. Douglas Hoffman. 1998. Critical Incidents: Service Failures that Matter Most. Cornell Hotel and Restaurant Administration Quarterly 39(3):66-73.

Gilly, M. C., and B. D. Gelb. 1982. Post-Purchase Consumer-Processes and the Complaining Consumer. Journal of Consumer Research (9):323-328.

Goodwin, Cathy, and Ivan Ross. 1990. Consumer Evaluations of Responses to Complaints: What's Fair and Why. Journal of Consumer Marketing 7(2):39-47.

Johnston, Timothy C., and Molly A. Hewa. 1997. Fixing Service Failures. Industrial Marketing Management 26(September):467-473.

Johnston, R. 1995. Service Failure and Recovery: Impact, Attributes and Process, in T. Swartz, D. Bowen, and S. Brown, eds., Advances in Services Marketing and Management, Vol. 4 (Greenwich, CT: JAI Press), pp. 211-228.

Keaveney, Susan M. 1995. Customer Switching Behavior in Service Industries: An Exploratory Study. Journal of Marketing 59(2):71-82.

Lockwood, A. 1994. Using Service Incidents to Identify Quality Improvement Points. International Journal of Contemporary Hospitality Management 6(1/2):75-80.

Narayandas, Das. 1998. Measuring and Managing the Benefits of Customer Retention: An Empirical Investigation. Journal of Service Research 12): 108-128.

Oliva, Terence A., Richard L. Oliver, and Ian C. MacMillian. 1992. A Catastrophe Model for Developing Service Satisfaction Strategies. Journal of Marketing 56(3):83-95.

R. T. Rust, B. Subramanian, and W. Wells. 1992. Making Complaints a Management Tool. Marketing Management 1(3):41-45.

Seiders, Kathleen, and Leonard L. Berry. 1998. Service Fairness: What It Is and Why It Matters. Academy of Management Executive 12(2):8-20.

Singh, Jadip. 1991. Understanding the Structure of Consumers' Satisfaction Valuations of Service Delivery. Journal of the Academy of Marketing Science 19(3):223-244.

Smith, Amy K., and Ruth N. Bolton. 1998. An Experimental Investigation of Customer Reactions to Service Failure and Recovery Encounters: Paradox or Peril? Journal of Service Research 1(1):65-81.

Stauss, Berndt, and Christian Friege. 1999. Regaining Service Customers: Costs and Benefits of Regain Management. Journal of Service Research 1(4):347-361.

Sundaram, D. S., Cynthia Webster, and Claudia Jurowski. 1996. Service Failure Recovery Efforts in Restaurant Dining: The Role of Criticality of Service Consumption. Hospitality Research Journal 20(2):137-150.

Tax, Stephen S., Stephen W. Brown, and Murali Chandrashekaran. Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing. Journal of Marketing 62(2):60-76.

Tyler, T. R. 1994. Psychological Models of the Justice Motive: Antecedents of Distributive and Procedural Justice. Journal of Personality and Social Psychology (67):850-863.

Notes

(1.) Frederick F. Reichheld and W. Earl Sasser, Jr. 1990. Zero Defections: Quality Comes to Services. Harvard Business Review 68(5):105-111.

(2.) Susan M. Keaveney. 1995. Customer Switching Behavior in Service Industries: An Exploratory Study. Journal of Marketing 59(2):71-82.

(3.) See L. Dube and M. Maute. 1996. The Antecedents of Brand Switching, Brand Loyalty and Verbal Responses to Service Failures, in T. Swartz, D. Bowen, and S. Brown, eds., Advances in Services Marketing and Management, Vol. 5 (Greenwich, CT: JAI Press), pp. 127-151.

(4.) R. L. Day and E. L. Landon. 1976. Collecting Comprehensive Complaint Data by Survey Research, in B. B. Anderson, ed., Advances in Consumer Research, Vol. 3 (Atlanta, GA: Association for Consumer Research), pp. 263-268.

(5.) Stephen S. Tax and Stephen W. Brown. 1998. Recovering and Learning from Service Failure. Sloan Management Review 39(3):76.

(6.) Jeffrey G. Blodgett, Donald H. Granbois, and Rockney G. Walters. 1993. The Effects of Perceived Justice on Complainants' Negative Word-of-Mouth Behavior and Repatronage Intentions. Journal of Retailing 69(4):408.

(7.) Tax and Brown, 83.

(8.) Day and Landon, 407.

(9.) Charles R. Weiser. 1995. Championing the Customer. Harvard Business Review 73(6):113.

(10.) Quoted in Tax and Brown, 81. For more on the importance of the front line in preventing and recovering from failure, see L. A. Schlesinger and J. L. Heskett. 1991. Breaking the Cycle of Failures in Services. Sloan Management Review 32(3):17-28.

(11.) Christopher W. L. Hart, James L. Heskett, and W. Earl Sasser, Jr. 1990. The Profitable Art of Service Recovery. Harvard Business Review 68(4):150.

(12.) Technical Assistance Research Program (TARP). 1986. Consumer Complaint Handling in America: An Update Study (Washington, DC: Department of Consumer Affairs). Often referred to as the TARP Study.

(13.) For further information on negative word of mouth, see Jagdip Singh. 1990. Voice, Exit, and Negative Word-of-Mouth Behaviors: An Investigation Across Three Service Categories. Journal of the Academy of Marketing Science 18(1):1-15; Marsha L. Richins. 1983. Negative Word-of-Mouth by Dissatisfied Consumers: A Pilot Study. Journal of Marketing 47(4):68-78; and Jeffrey G. Blodgett, Donald H. Granbois, and Rockney G. Walters. 1993. The Effects of Perceived Justice on Complainants' Negative Word-ofMouth Behavior and Repatronage Intentions. Journal of Retailing 69(4):399-428.

(14.) Ralph L. Day. 1980. Research Perspectives on Consumer Complaining Behavior, in Charles W. Lamb and Patrick M. Dunn, eds., Theoretical Developments in Marketing (Chicago: American Marketing Association), pp. 211-215.

(15.) Carl Sewell and Paul B. Brown. 1990. Customers for Life (New York: Pocket Books).

(16.) Janelle Barlow and Claus Meller. 1996. A Complaint Is a Gift (San Francisco: BerrettKoehler), p. 24.

(17.) Hart, Heskett, and Sasser, 151.

(18.) Ibid., 153.

(19.) See K. Douglas Hoffman, Scott W. Kelley, and Holly M. Rotalsky. 1995. Tracking Service Failures and Employee Recovery Efforts. Journal of Services Marketing 9(2):49-61. See also Scott W. Kelley and Mark A. Davis. 1994. Antecedents to Customer Expectations for Service Recovery. Journal of the Academy of Marketing Sciences 22(1):52-61; Thomas O. Jones and W. Earl Sasser, Jr. 1995. Why Satisfied Customers Defect. Harvard Business Review 73(6):88-99; and Richard A. Spreng, Gilbert D. Harrell, and Robert D. Mackoy. 1995. Service Recovery: Impact on Satisfaction and Intentions. Journal of Services Marketing 9(1):15-23.

(20.) L. Berry, A. Parasuraman, and V. A. Zeithaml. 1994. Improving Service Quality in America: Lessons Learned. Academy of Management Executive 8(2):32-52.

(21.) Spreng, Harrell, and Mackoy, 18-19.

(22.) Hoffman, Kelley, and Rotalsky, 49-61.

(23.) Mary Jo Bitner, Bernard H. Booms, and Lois A. Mohr. 1994. Critical Service Encounters: The Employee's Viewpoint. Journal of Marketing 58(4):101.

(24.) Richard B. Chase and Douglas M. Stewart. 1994. Make Your Service Fail-Safe. Sloan Management Review 35(1):36.

(25.) D. Daryl Wyckoff. 1984. New Tools for Achieving Service Quality. Cornell Hotel and Restaurant Administration Quarterly 24(6):156.

(26.) Blodgett, Granbois, and Walters, 421-423.

(27.) J. L. Heskett, W. E. Sasser, Jr., and C. W. L. Hart. 1990. Service Breakthroughs: Changing the Rules of the Game (New York: The Free Press), p. 155.

(28.) Cathy Goodwin and Ivan Ross. 1992. Consumer Responses to Service Failures: Influence of Procedural and Interactional Fairness Perceptions. Journal of Business Research 25(2):160. See also Tax and Brown, 79-81.

(29.) Goodwin and Ross, 149-163.

(30.) Tax and Brown, 81.

(31.) E. A. Lind and Tom Tyler. 1987. The Social Psychology of Procedural Justice (New York: Plenum).

(32.) Jeffrey G. Blodgett, Kirk L. Wakefield, and James H. Barnes. 1995. The Effects of Customer Service on Consumer Complaining Behavior. Journal of Services Marketing 9(4):31-42.

(33.) Tax and Brown, 80.

(34.) Hart, Heskett, and Sasser, 148-156.

(35.) Ibid.

(36.) Tax and Brown, 81.
Table 12-1 Restaurant Recovery Strategies, Guest Ratings of Their
Effectiveness, and Guest Repatronage Intentions

                          Recovery   Would Still
Recovery Strategy          Rating     Patronize

Free Food                   8.05        89.5%
Discount                    7.75        87.5
Coupon                      7.00        40
Managerial intervention     7.00        99.8
Replacement                 6.35        80.2
Correction                  5.14        80
Apology                     3.72        71.4
Do nothing                  1.71        51.3

Source: Adapted from K. Douglas Hoffman, Scott W. Kelley, and Holly M.
Rotalsky. 1995. Tracking Service Failures and Employee Recovery
Efforts. Journal of Services Marketing 9(2):56.

Figure 12-2 Matching the Recovery Strategy to the Failure.

Severity of
failure                Cause of failure

              Organization          Guest

Relatively    Red Carpet      Provide help to the
severe        treatment       extent possible and
              and apology     apologize

Relatively    Apologize and   Apologize and
mild          replace         extend sympathy
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Title Annotation:Section 3 The Hospitality Service Systems
Publication:Managing the Guest Experience in Hospitality
Geographic Code:1USA
Date:Jan 1, 2000
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