The document outlines key steps and best practices for effective service recovery and complaint handling, emphasizing the importance of employee training in empathy and responsive complaint systems. It highlights that a fair recovery process can enhance customer satisfaction and loyalty, while poor recovery efforts may exacerbate issues. The importance of following up with customers and communicating process improvements is also underscored to prevent future failures.

1. TO SERVICE RECOVERY &
COMPLAINT HANDLING SUCCESS*
5 STEPS
WHAT DOES A FAIR RECOVERY PROCESS LOOK LIKE?
FOUR EMPLOYEE BEHAVIORS THAT MATTER
WHAT CUSTOMERS SAY WHEN ASKED
REASONS WE DON’T COMPLAIN
1
You get two benefits from this action. First, you get an opportunity to recover from
the failure and save the customer. Second, a convenient process has a positive
impact on customer satisfaction and loyalty beyond the remedy you offer.
Too Much Time
& Effort
Assumes
Responsibility
Customer Tells
Their Story
Few
Interactions
Miscellaneous
Reasons
Took Other
Punitive Action
Lack of Perceived
Responsiveness
Organization
Initiated Recovery
Individual
Personality & Mood
21%
20%
17%
16%
14%
12%
Follow-up Flexible
Response
Quickly
Resolved
....
HIRE AND TRAIN YOUR EMPLOYEES FOR
EMPATHY, CARING, AND RESPECT2
3
4
CREATE SYSTEMS TO SUPPORT EFFECTIVE COMPLAINT
HANDLING BY YOUR CUSTOMER-FACING EMPLOYEES
RESPOND (WELL) TO CUSTOMER PROBLEMS AND
COMPLAINTS - BETTER YET, PROACTIVELY
MAKE IT CONVENIENT FOR CUSTOMERS TO COMPLAIN
Employees who see problems or hear complaints are not only your first line of defense; they
are your first – and perhaps only – opportunity to shine! So use selection and training to
ensure that your frontline employees have the requisite empathy, caring, and respect.
45% 42% 30% 23% 19% 10%
Formal Guidelines
Customer Input
Easy Complaining Staff EmpowermentStaff Training
THE DIMENSIONS OF AN EFFECTIVE RECOVERY SYSTEM
....
Yes, this seems so obvious. Yet,
research has shown that many
customers who complain never get a
response. How infuriating is that! And
a bad recovery is worse than if the
customer had never complained!
MEANS ON A 7-POINT SCALE
REPURCHASE INTENTIONS
Customers who receive process improvement communications are more
satisfied with the company – especially if they experienced a poor recovery
effort. And this benefit is true even if the customer didn’t complain!
Showing
Respect and
Courtesy
Listening
Carefully
Offering an
Informed
Explanation
Displaying
Regret
The best time and place to resolve a complaint is at the point of failure. And research
shows that having the right systems in place are critical to giving employees the
confidence it takes to engage – rather than avoid – complaining customers.
Complaint
with No
Recovery
Firm-initiated
recovery
Satisfactory
Recovery After
Complaint
No Complaint Dissatisfactory
Recovery After
Complaint
......
......
5.0 4.5 3.7 2.7 2.3
Of course, not all future issues can be avoided.
However, if a controllable action led to a
failure, then let the customer know what steps
are being taken to make things better.
5
FOLLOW UP WITH THE CUSTOMER TO OFFER ASSURANCE
THAT THE PROBLEM WILL NOT HAPPEN IN THE FUTURE
15% of complainers got no
response from the organization
WHAT SCIENCE SAYS
HIGH
IMPORTANCE
LOW
IMPORTANCE
MEDIUM
IMPORTANCE
Voorhees, Clay M., Michael K. Brady, and David M. Horowitz (2006), “A Voice from the Silent Masses: An
Exploratory and Comparative Analysis of Noncomplainers,” Journal of the Academy of Marketing Science,
34 (4), 513-527.
Tax, Stephen S., Stephen W. Brown, and Murali Chandrashekaran (1998), “Customer Evaluations of Service
Complaint Experiences: Implications for Relationship Marketing,” Journal of Marketing, 62 (April), 60-76.
Gelbrich, Katja and Holger Roschk (2011), “A Meta-Analysis of Organizational Complaint Handling and
Customer Responses,” Journal of Service Research, 14 (1), 24-43.
Smith, Jeffery S., Gavin L. Fox, and Edward Ramirez (2010), “An Integrated Perspective of Service Recovery:
A Sociotechnical Systems Approach,” Journal of Service Research, 13 (4), 439-452.
Van Vaerenbergh, Yves, Bart Larivière, and Iris Vermeir (2012), “The Impact of Process Recovery
Communication on Customer Satisfaction, Repurchase Intentions, and Word-of-Mouth Intentions,” Journal
of Service Research, 15 (3), 262-279.
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2.
3.
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5.
RESEARCH SOURCES
To learn more about how the world-class professors
of LIFT PhD can help your company, visit our website.
WWW.LIFTPHD.COM
Service recovery & complaint handling refer to the actions taken by a firm in response to a product or service failure or problem.
THE POSITIVE IMPACT OF PROCESS IMPROVEMENT COMMUNICATIONS
ON CUSTOMER SATISFACTION
When the Customer
Experienced Good
Recovery
Small Impact
When the Customer
Experienced Poor
Recovery
Big Impact
When the Customer
Experienced the failure,
but Didn’t Complain
Big Impact
When the Customer
Didn’t Experience
the Failure
No Impact