978-0078112102 Chapter 7 Lecture Note

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CHAPTER 7:

SERVICE RECOVERY

CHAPTER TOPICS

The Impact of Service Failure and Recovery

How Customers Respond to Service Failures

Service Recovery Strategies: Fixing the Customer

Service Recovery Strategies: Fixing the Problem

Service Guarantees

Switching versus Staying Following Service Recovery

Technology Spotlight: Cisco Systems—Customers Recover for Themselves

Global Feature: Service Recovery across Cultures

Strategy Insight: Eliciting Complaints and Reports of Service Failure

CHAPTER OBJECTIVES

1. Illustrate the importance of recovery from service failures in keeping customers and building loyalty.

2. Discuss the nature of consumer complaints and why people do and do not complain.

3. Provide evidence of what customers expect and the kind of responses they want when they do

complain.

4. Present strategies for effective service recovery, including ways to “fix the customer after a service

failure and to “fix the problem.”

5. Discuss service guarantees—what they are, the benefits of guarantees, and when to use them—as a

particular type of service recovery strategy.

LECTURE TIPS & AIDS

1. The instructor might ask students, “What do you do when you receive poor service?” Figure 7.3 can

then be used to have students in the class do a self-profile of their own response to service failures.

The instructor asks each student to profile his/her own behavior and determine which of the various

actions suggested in the figure he/she typically takes. After students have had a chance to examine

and share their own typical response to service failure, other questions could follow up that activity.

For example, “Under what conditions are students likely to respond differently than what they

normally do?” Also, “What are the consequences of responding the way you normally do to a

complaint?”

Alternatively, the instructor might ask for examples from just two students about a service failure they

have recently had. After having the two students briefly discuss their experiences, the instructor

could probe further (if necessary) to find out what action each took, if any, and use that as a way to

introduce Figure 7.3. Generally speaking, students who have had service failure experiences are more

than willing to share what happened to them. The instructor might also ask about the consequences of

each experience.

2. To facilitate discussion of the “recovery paradox” included in the chapter, the instructor might ask for

a student to share an experience where the service firm originally failed in their service delivery, and

yet recovered very well. Ideally, the student will share that his/her experience, in spite of the failure,

actually has made him/her more loyal to the organization and more satisfied with the services being

provided. If such an example is shared, it can be used to illustrate the recovery paradox. (As

discussed in the chapter, the recovery paradox implies that firms should indeed fail in service delivery

in order to recover, and therefore make customers more satisfied.) After this discussion the question

might be posed to the class as to whether creating a service failure and then providing good recovery

is an appropriate strategy for a firm to pursue, particularly given the experience of the student in class

who was more satisfied after the failure and subsequent recovery than before.

3. In order to discuss service switching, and the reasons customer switch service providers, students

might be asked to think of an experience they have had where they have switched providers. Then,

using Figure 7.7, students may identify one or more causes behind why they switched providers.

Asking students to share their service switching experiences and the causes behind that can help to

illustrate the points being made in that figure.

4. Service guarantees can be a critical part of firm’s service recovery procedures. As discussed in the

chapter, however, guaranteeing service delivery is often difficult for service providers. To stimulate

discussion on the topic, the instructor might ask students about the viability of an instructor offering a

student satisfaction guarantee in the classroom (perhaps in a services marketing class). Given that

students are indeed “experts” in educational services, this should generate some lively discussion.

Some discussion questions include:

What should be guaranteed?

Is a service guarantee appropriate in an educational setting?

How should such a guarantee be written?

How should such a guarantee would be administered and paid out?

What is appropriate compensation?

What are the advantages of providing a guarantee to students?

What are the advantages of providing a guarantee to the instructor?

What are the advantages of providing a guarantee to the university?

What are the disadvantages of providing such a guarantee?

Why is it that universities typically do not offer such guarantees?

Note: Two instructors have actually guaranteed student satisfaction in two of their marketing classes.

[This guarantee is discussed in McCollough, Michael A. and Dwayne D. Gremler (1999),

“Guaranteeing Student Satisfaction: An Exercise in Treating Students as Customers,” Journal of

Marketing Education, 21 (August), 118-130.] The guarantee provided on the next page provides an

example of a version of the guarantee that was based on the one they constructed for use in their

classes. Copies of this guarantee could be distributed to the class and then critiqued using the criteria

provided in Chapter 7.

Sample Student Satisfaction Guarantee:

QUESTIONS TO USE WITH CHAPTER OPENING VIGNETTE

Chapter 7: JetBlue and the Valentine’s Day Ice Storm

1. Research JetBlue online. What is JetBlue’s situation today? How have they recovered from their Valentine’s

Day service failure in 2007? Have they grown? What is their reputation? Are they keeping their promises to

customers? Are there any residual effects – good or bad – from the 2007 incident? If so, describe.

2. Based on your research, is JetBlue an airline that you would like to fly? Would recommend to others? Why

or why not?

ACTIVE LEARNING ACTIVITIES

1. Write a letter of complaint to a service organization (or voice your complaint in person) where you

have experienced less-than-desirable service. What do you expect the organization to do to recover?

(Later, report to the class the results of your complaint, whether you were satisfied with the recovery,

what could/should have been done differently, and whether you will continue using the service.)

2. Choose a service you are familiar with. Explain the service offered and develop a good service

guarantee for it. Discuss why your guarantee is a good one, and the benefits to the company of

implementing it.

3. Re-read Technology Spotlight in this chapter, featuring Cisco Systems. Visit Cisco System’s web site

(www.cisco.com). Review what they are currently doing to help their customers solve their own

problems. Compare what Cisco is doing with the self-service efforts of another service provider of

your choice.

4. Interview five people about their service recovery experiences. What happened and what did they

expect the firm to do? Were they treated fairly based on the definition of recovery fairness presented

in this chapter? Will they return to the company in the future?

5. Interview a manager about service recovery strategies used in his/her firm. Use the strategies shown

in Figure 7.4 to frame your questions.

POTENTIAL VIDEO CLIPS TO USE IN ILLUSTRATING CHAPTER 7 CONCEPTS

 “Heartbreaker” – At a h1otel, a customer purposely falls in order to get a free stay. In

particular, Sigourney Weaver’s character trips her daughter (and then sprays water on the floor) at an

expensive hotel in order to get a free room. The firm provides excellent recovery, even though it was

not at fault. This clip illustrates the fear some companies may have about customers taking advantage

of, or abusing, a firm.

“Ferris Bueller’s Day Off” – Similar to the previous clip, this s2cene begins with Ferris

Bueller looking at the guest book when the host is not looking in order to use a name to get a seat

(without having made a reservation) at an expensive restaurant. The waiter eventually agrees to seat

Ferris and his two friends…fearing that he is who he said he is. The firm recovers well and the

customers end up with a great table.

“Father of the Bride” – After agreeing to hire a wedding coordinator, George Banks (Steve

Martin), his wife, and his bride-to-be daughter are in the coordinator’s office discussing potential

wedding plans and the ordering of a wedding cake. The clip can be used to illustrate how the

servicescape and other types of physical evidence (specifically, a book with pictures of wedding

cakes) can influence the customer’s experience.

“Tommy Boy” – In one scene near the middle of the movie, an automobile parts salesman

(3Chris Farley) attempts to convince a company to sell his brake pads. They have a brief discussion

on service guarantees.

“Fast Times at Ridgemont High” – In one scene a4 customer approaches a fast-food counter

and asks for his money back for what he calls a poor breakfast. (In the background a banner states

“100% Guaranteed Breakfast.”) The employee (Judge Reinhold) wants to do things by the book, and

requests the customer fill out a form (which he cannot find) in order to receive $2.75 back. The clip

can be used to lead into the discussion of the characteristics of a good service guarantee.

“Stuck on You” – This movie begins with a scene at a diner/café. A sign outside of the

restaurant promises to have meals prepared within three minutes or they are free. In this scene the

waitress takes the orders from a table of six and then sets a three-minute timer. Two twin brothers

(Matt Damon and Greg Kinnear), who have been physically attached to each other since birth,

proceed to prepare all six orders behind the counter as the table of six roots against them. Although

the word “guarantee” is not used, it is clear what the promise (and compensation) is. This clip could

be used to discuss the characteristics of an effective service guarantee.

“Failure to Launch” (2006). Two clips: Clip 1 scene – 12:33-14:26; clip 2 scene –

38:55-41:14. The first clip from the movie is about a woman named Paula, who is an interventionist,

to help get grown up adults to move out of their parents’ homes. The parents are the ones who hire

Paula to date their sons, and the sons have no idea that she is hired so that they move out. This is a

service she offers and she has always had success. She meets her clients, whose son is 35 year-old

Tripp. The parents in this scene are discussing what Paula can do for them and if they want to hire

her or not. The next clip is while Paula is performing her services. She has been seeing Tripp for a

while and finds herself at his house, where she has to “meet” his parents (whom she already knows).

She then learns from the parents that her service is failing and that Tripp is about to dump her. Not

wanting to let her service fail, Paula takes it to the next level to do whatever she can to make sure she

is succeeding and making her customers who paid for her happy. Illustrates service failure and

recovery (also the five dimensions of service quality.)

“The Office,” Season 3, Episode 20. Original air date – April 26, 2007. Morning Conference

Meeting (3:07-5:26). Angela on Customer Service (10:20-10:55 and 13:23-13:53). Michael’s Press

Conference (11:15-12:33 and 13:53-15:10). Product Recall – an unfortunate drawing has ended up

on a plethora of reams of paper that is sent out to customers. The office now faces the dilemma of

apologizing to all of its customers and fixing the problem. The phones are ringing off the hook and

they have to do something immediately to fix the problem. Illustrates service recovery, reliability,

empathy.

POSSIBLE WEB SITES FOR CHAPTER 7

Company Location

British Airways www.britishairways.com

ClubMed www.clubmed.com

Cisco Systems www.cisco.com

Hampton Inn & Suites Hotel (for guarantee) www.hamptoninn.com

JetBlue Airways www.jetblue.com

Lands’ End (for guarantee) www.landsend.com

ProStaff www.prostaff.com

Ritz-Carlton www.ritzcarlton.com

Starbucks www.starbucks.com

APPROPRIATE CASES FOR CHAPTER 7

From previous Zeithaml, Bitner, and Gremler Services Marketing texts:

United Breaks Guitars [included in the sixth edition of this text: Zeithaml, Bitner, and Gremler

(2013) Services Marketing: Integrating Customer Focus Across the Firm, New York, NY:

McGraw-Hill Companies]

JetBlue: High Flying Airline Melts Down in Ice Storm [included in the sixth edition of this text:

Zeithaml, Bitner, and Gremler (2013) Services Marketing: Integrating Customer Focus Across the

Firm, New York, NY: McGraw-Hill Companies]

General Electric Medical Systems – [included in the fourth edition of this text: Zeithaml, Bitner,

and Gremler (2006) Services Marketing: Integrating Customer Focus Across the Firm, New

York, NY: McGraw-Hill Companies]

Virgin Atlantic Airways [included in the third edition of this text: Zeithaml and Bitner (2003)

Services Marketing: Integrating Customer Focus Across the Firm, New York, NY: McGraw-Hill

Companies]

Northwest Airlines and the Detroit Snowstorm [included in the third edition of this text: Zeithaml

and Bitner (2003) Services Marketing: Integrating Customer Focus Across the Firm, New York,

NY: McGraw-Hill Companies]

EuroDisney: The First 100 Days [included in the second edition of this text: Zeithaml and Bitner

(2000) Services Marketing: Integrating Customer Focus Across the Firm, New York, NY:

McGraw-Hill Companies]

Getting the Bugs Out [included in the first edition of this text: Zeithaml and Bitner (1996)

Services Marketing, New York, NY: McGraw-Hill Companies]

From other sources:

“Carnival Triumph: The Cruise From Hell,” by Felicia N. Morgan, Valarie A. Zeithaml, and

Richard R. Hawkins (2014); available from lead author: fmorgan@uwf.edu

Trend Micro (A): Responding to Service Failure [Kellogg School of Management Case,

Northwestern University, KEL 274, 2007]