2. I n t r o d u c t i o n
P A GE 02
Hospitality and tourism industry is a high-risk business for service failures due to
the increasing customer- employee interaction and the service characteristics of
inseparability, heterogeneity, and perishability. Due to the fact that service failures
result in customer dissatisfaction, they jeopardize the existence and expansion of
hospitality and tourism firms. For customers, service failures elicit unpleasant
feelings and behavioral intentions.
3. Customer dissatisfaction, bad word-of-mouth, customer
switching, higher expenses, and decreased staff performance
and morale are examples of negative emotions and resulting
behavioral purposes. The fierce competition in the service sector
has compelled businesses to put a premium on service recovery
to maintain their performance. With the hospitality and tourism
industries growing continuously, they are being pushed to
rethink their business tactics to maintain customer loyalty and
profitability.
4. L e a r n i n g O b j e c t i v e s :
P A GE 03
At the end of this chapter, students should be able to:
1. Discuss what service failure is and service recovery;
2. Determine categories, causes of service failures and
customer's response to failure;
3. Discuss the psychodynamics of customers;
4. Identify how to handle service failure; and
5. Enumerate service recovery strategy.
5. P A GE 04
S e r v i c e F a i l u r e
Customer service is critical in the hospitality and tourism industry
since it is the person who is responsible for attending to the
requirements and demands of customers. To ensure that the
customer's requests are addressed in a manner that will reflect
negatively or positively on the organization, they must give prompt,
attentive, and cheerful service. The nature of service is difficult to
describe and may be extensively customized depending on the needs
and preferences of the customer. The degree to which customers are
happy with the result of the service is used to measure service quality.
When consumers believe that the service they receive falls short of
their expectations, they are more likely to encounter service failures.
6. We are all aware that the main goal in the hospitality and tourism sector
is to meet, if not surpass, customers' expectations. A service failure is
defined as a service performance that does not satisfy the customer's
expectations. Failing to plan for failure is unavoidable in business, and
as part of its strategic goals, it must prepare for such failures.
Customers often expect to be compensated for the inconvenience
caused by a service failure in the form of any combination of refunds,
credits, discounts, or apologies when this happens. Failures can occur
even in the most significant service businesses; they may be caused by
the service not being accessible when promised, it being provided late
or too slowly, the conclusion being erroneous or poorly performed, or
the staff being impolite or indifferent.
7. All of these different forms of service failures result in bad customer
experiences. If left unaddressed, they may lead to consumers leaving, alerting
others about their poor experiences, or even filing a complaint with the
consumer courts.
Businesses all around the globe are now using social media to expand and
enhance their offerings to customers. Failures may become viral in a matter of
hours, resulting in widespread criticism and an unfavorable public perception of
the firm.
8. P A GE 05
C a t e g o r i e s o f S e r v i c e F a i l u r e s
Customers' involvement in the production process is the main distinguishing
feature of the service business as compared to manufacturing. The service-
providing procedure in any hospitality business does not divide customers.
Therefore service failures occur at numerous points throughout the dining
experience. There are two types of service failures: process failures and
outcomes failures. As a result, failures in service were approached from
these two perspectives.
9. Process failures explain a problem with how the service is offered,
whereas failures in the result show a problem with the service itself.
There are many types of service delivery failures but process failures
are more precise since they pertain to the flaws in the intangible parts
of the service (such as delayed service or unpleasant or irresponsible
staff). Two most process failures include waiting a long time to be
served or not being respected by servers.
10. Failures to provide tangible products/ services or essential/basic services are
examples of outcome failures (e.g., overbooking, a bug in the food,
overcooked food, or out-of-stock items). They primarily reflect observable
results and pressing needs. Out-of-stock menu items and poor food quality
are also instances of outcome failures. Customer service failures occur
whenever clients do not get the goods or services they paid for, regardless of
whether the payment is outcome-based or based on both. As a result, it's
essential to look into which sorts of service failures hurt consumers the most.
11. P A GE 06
E x a m p l e S c e n a r i o o f
P r o c e s s Failure:
You come to the restaurant with the intention of eating there. You have been
seated at a table, however, you have seen that the table has not yet been
cleared away from its contents. You call the attention of the waiter and ask
them to clean your allocated table. On the other hand, the server is completely
uninterested in you and avoids establishing eye contact with you. Instead of
replying to your request, the server engages in a conversation with another
person on the team. Finally, the waitress comes to your table and promptly
cleans it up for you. You observe that their outfit is not in good condition. After
that, the server will continue to take your order. When you look closer, you see
that the server is not wearing a face mask. The server makes no apologies or
attempts to explain himself.
.
12. You come to the restaurant to eat there. As soon as the waiter approaches your table, he
takes your order. The server notifies you that the option you selected is no longer
accessible. You choose another option from the drop-down menu. When your order is
delivered, you will instantly realize that it has been cooked incorrectly. You communicate
your unhappiness to the server who does not respond with an apology or explain their
actions. Specifically, the process failure scenario represents conditions related to service
process failures that may cause customers to have negative emotions in a restaurant
setting (e.g., inattentive service providers, a server's rude/discourteous behavior, slow
service, anddisordered food deliveries). The outcome failure scenario contains
circumstances involving service performance failures that might result in client
displeasure, such as inadequately cooked meals and unavailable menu items, among
other things
Example Scenario of Outcome Failure
13. Causes of Service Failures
P A GE 07
When a product or
service does not fulfill
consumer expectations,
it may lead to a
product's final failure to
reach profitability since
the expected life cycle
cannot be achieved as
defined by the
business.
1. Service-Product
Delivery Failure
2. Meeting Explicit or
Implicit Customer Request
Failure
Customers often make demands,
whether implicitly (indirectly) or
explicitly (directly). If the employee
fails to respond to the customer's
request, it might lead to a service
failure or a complaint from the
customer. The business will lose
customers and revenue if they
understand you cannot satisfy their
needs, so they will look for an
alternative business that will satisfy
their needs, wants, and demands.
3. Failure Caused by
Employee Actions and
Attitudes
When this sort of failure occurs, the
validity of the training program will
be called into doubt. If an
employee's actions or attitudes
throughout their employment result
from in-service failure, it is possible
that they will not get the required
training. Training is a program that
assists workers in acquiring detailed
information or abilities that will help
them perform better in their
existing positions. If this occurs, the
individual will need further training
14. Causes of Service Failures
P A GE 08
4. Failure Caused by Circumstances Beyond Control
Inevitably, service failure occurs, yet there are situations in which it is caused
by other customers, random occurrences, or conditions beyond the
organization's control. Preparation is essential to prevent difficulties or
challenges from arising. A strategy should be in place to prevent problems or
challenges from occurring. This failure might result from an employee's
actions, the scenario itself, or the expectations of the customer of the firm,
business, or restaurant. Sometimes, a customer has such high expectations of
a firm that it will be considered a failure if the company fails to achieve those
expectations. In other cases, the company's service is not good enough for
everyone, and as a result, the customers are not completely satisfied with their
experience.
15. P A G E 0 9
C u s t o m e r R e s p o n s e t o
S e r v i c e F a i l u r e
It is widely believed that no matter how hard a firm tries, even the finest
service company will have service failures in the hospitality sector at
some point or another. The fact that service failures are unavoidable is
abundantly shown. Hospitality and tourism management seeks to give
the highest quality goods and services to its customers the same way as
they did in the past, yet service failures are regular and widespread.
Customer dissatisfaction, a loss of customer trust, bad word-of-mouth
(WOM) behavior, customer defection, higher expenses, revenue loss,
and lower staff morale and performance are all adverse effects of service
failures.
16. BELOW ARE SOME OF THE CUSTOMER'S RESPONSE TO SERVICE
FAILURE.
Never to Return
When a business fails to meet the expectations of its customers, some of them
will not return as a result of the disappointment they have experienced. Others
will prefer to go to the other firm that can provide them with a satisfactory
experience. If anything like this happens in your company, it may have a
significant effect since you are not only losing a client, but you are also losing
their trust, and as a result, your firm's profit will fall.
17. Customer Complaints
A customer complaint is defined as an expression of displeasure or
dissatisfaction with any product or service that has been acquired and
experienced by the customer. In a positive meaning, it may be
regarded as a report from a customer who provides information
concerning an issue with a product or service. Customers' complaints,
according to some contemporary business gurus, should be seen as a
gift. Customer complaints are often informal concerns sent directly to
a firm or any service provider. Most customers aim to resolve issues
with goods and services, albeit it may take some patience on their
part.
18. C u s t o m e r R e s p o n s e t o
S e r v i c e F a i l u r e
P A G E 1 0
3.Negative Word-of-Mouth
The importance of word-of-mouth (WOM) has grown in importance in the
hotel and tourism industries since today's customers seek experiences
shared by others before making a purchase. As a result, customers depend
on word-of-mouth to conclude the quality of products and services. Because
of the widespread use of internet platforms by customers to discuss their
experiences, word of mouth (WOM) may travel more widely and quickly.
Due to this condition, customers who have a terrible experience are more
likely to propagate their negative experiences and engage in negative WOM
more readily and actively. This has the potential to do considerable harm to
the company's branding and reputation.
19. 4. Third Party Action
Some customers who are dissatisfied with the service they received
file complaints with consumer organizations, trade standards agencies
of a local or national government, licensing authorities, and
professional organizations.
20. P A GE 11
P s y c h o d y n a m i c o f C u s t o m e r s
Customers that are difficult to deal with exist in the hospitality and tourism
industries. Instead of dealing with minor issues, they overreact and create a
commotion. They cause you to lose your equilibrium by exploding and blowing
things apart. Those who are dissatisfied with the answer they get to their
problems may turn to aggressive and threatening actions, as well as
harassment. In the case of demanding customers, we term psychodynamic
behavior, customers who are challenging to deal with share a common trait.
Those who want attention and recognition are the majority of them, and they
have extreme desires for both. These customers complain because they want to
be known by their fellow customers and want to be treated differently every time
they return to a business.
21. Exploder is someone who loses his cool, it is like a bomb goes off.
Aside from shouting and embarrassing you in public, he might also be
unpredictable and make threatening statements at certain seasons of the year.
Example: "You're a "crap"; you are deceiving; I'll file a formal complaint against
you."
Sherman Tank is someone who speaks and monopolizes the conversation, who
interrupts often, does not know how to listen.
This type of customer wants you to hear just their side of the tale, and no one
else's, too. They are not interested in hearing your side of the story, even
though there is nothing wrong with your service. They want you to listen to their
concerns and complaints without being concerned about listening to your side of
the story, as well.
22. P A GE 12
P s y c h o d y n a m i c o f C u s t o m e r s
4. Balloons is another pessimist who presents themselves as some type of
expert or professional. They instruct you on what you should do next. Consider
the following example: "I'm a connoisseur, and I understand how to appraise
wines and spirits." And I'm here to inform you that you and your whiskey is a
forgery. It is made in the area not imported. "This is one of the alcoholic drinks
that you should not be selling." They believe they are better than you and
correct you even though there is nothing wrong with your cuisine or the service
that you provide.
5. There are also customers who are chronic complainers who tend to
incessantly whine about everything, even the most little matters. They want
to be noticed, and they think it's fantastic that they are.
23. P A G E 1 3
S e r v i c e R e c o v e r y
Service recovery is the settlement of an issue from an unhappy customer by a firm,
resulting in the consumer becoming a loyal customer. It is the activity taken by a
service provider in the event of a service failure to provide the service. Service
recovery refers to the efforts taken to fix issues, change the unfavorable attitudes of
unsatisfied customers, and eventually retain these clients after they have
complained. The concept of service recovery is expanded to include customer
satisfaction as well. Service recovery is defined as the process of restoring aggrieved
or unhappy customers to a level of complete contentment with a business or service.
Because it focuses on service breakdowns and the company's quick response,
service recovery varies from other complaint management methods.
24. Customer attitudes may be changed by providing appropriate service recovery.
A successful service recovery plan will likely boost customer confidence in a
restaurant or hotel's ability to recover quickly.
A good service recovery results in increased customer loyalty and positive
customer evaluations for the organization, and effective service recovery after a
failure may substantially influence the organization's performance.
There are several different methods of service recovery that are employed in
hospitality firms, including offering an apology, recovering quickly, compensating
customers, and intervening at the management level. A customer's repurchase
intentions, word-of-mouth (WOM), contentment, and loyalty may all be
influenced by the kind of service recovery they get. Results of a given service
recovery may differ depending on whether the customer chooses the recovery
action.
25. S e r v i c e R e c o v e r y
P A GE 14
Customers who get monetary compensation such as a complementary lunch or a discount,
are more likely to conclude that the conclusion of the failed scenario was equitable. In the
hospitality and tourism business, this is the most often used recovery approach.
For example, when a guest receives a faulty or filthy room, the hotel will compensate
the customer with free hotel points or meals. However, suppose the procedures are
not properly executed.
In that case, monetary compensation alone will not always result in a better assessment of
service recovery effort, repeat patronage intentions or overall customer satisfaction from
the client. Customer satisfaction with the manner service recovery is conducted might be
more important than the material results themselves. A rapid recovery, including fast issue
resolution, often results in customers believing that the processes chosen by the
organization to remedy the failure were reasonable..
26. Customers often think that they have been appropriately treated and reasonably
when service providers demonstrate helpfulness, empathy, and apologies to
them. Providing customers with reasons and clarifications during process
recovery communication often leads to customers believing that the information
supplied to them is appropriate, detailed, and relevant, resulting in greater
perceptions of fairness
27. H o w to Handle Service Failure
P A GE 15
1. Acknowledge the Issue
The first step to solve any issue is by acknowledging that there is an issue.
Belittling it, or denying it exists, is just frustrating for people facing those issues.
Not just the symptoms, but an honest and possibly painful dig into the roots to
analyze the cause and effect. Start by accepting that belittling or ignoring the
issue does not make it go away.
28. 2. Apologize to the Customer.
Whether or not the service failure was within the organization's control, when a
customer makes contact to complain, the first thing to do is to apologize to the
customer. If any organization fails to live up to expectation and disappoints its
customers, those customers deserve an apology. By apologizing to the customer you
are equally indicating that you acknowledge the situation and their disappointment
that you value their relationship, and you're humble enough to say sorry.
3. Resolve the Problem.
This process should start even before the customers make contact. As soon as the
occurrence of the service failure is noticed, proactive steps should be taken
immediately to fix or resolve it.
Apologizing to the customers should be secondary, something done to appease
them and keep the relationship together while the issue is being fixed.
29. H o w to Handle Service Failure
P A G E 1 6
4.Keep the Customer Informed.
While the issue is being fixed, depending on how long it takes to fix it, the
organization should try as much as possible to keep the customer informed on the
status of resolution or how much longer it is estimated to take. It could be via periodic
updates on the company website or social media handle.
5.Reach out to Customers.
Any hospitality and tourism business must make an extra effort to renew customer
confidence and give them reasons to continue patronage. This is done by reaching
out to the customers after the issue has been resolved.
30. The aim of reaching out is to:
Apologize again.
Thank the customers for their patience and sharing their experience.
Reassure them of unfettered service delivery in future.
6. Analyze the Issue and Extract Learning Points.
This is the final step and a critical one at that. It's time to go back to the drawing
board and ask these two important questions: What was the cause of this
service failure? What can we to do prevent it or mitigate its occurrence?
31. P A GE 17
S t r a t e g i e s in S e r v i c e R e c o v e r y
Customer dissatisfaction is an opportunity for service recovery since it gives
you the chance to say the right things at the right moment.
This may manifest as a physical or verbal altercation. Complaints may be
sent by phone, email, social media, or leaving a review on a review website.
When it comes to customer retention, a bad service recovery might be
devastating. Take, for instance, a customer who claimed their dinner was
served cold. They complain loudly to the waiting staff. We are aware that
apologizing to the consumer would be an excellent way to recover from this
incident.
32. In addition, to provide them with a freshly prepared dinner. You may
even offer a free drink or a discount as an incentive. A nice touch would
be for the manager to confirm that the problem was handled to their
satisfaction. Doing something extra for your customers that they may not
have anticipated. More importantly, go above and beyond their
expectations to demonstrate your sincere appreciation for them. Instead
of focusing on the bad, try to make it a learning opportunity.
Furthermore, you may even want them to return to your business since
you value your clients.
33. On the
On the other hand, if the business responds by fighting back and saying
the customer imagines things, it will refuse to help them. If it were the
case, the tale would be considerably different. Every one of us has seen
the negative TripAdvisor reviews and social media postings that resulted
from bad customer service. One minor occurrence might have a
significant impact on the company's future.
But the point is not to be kept hostage, and it is to offer you a second
opportunity at doing it right by knowing service recovery. Above all, it is
about prioritizing your company's image and ensuring that any problems
are entirely resolved.
34. P A G E 1 8
S t r a t e g i e s in S e r v i c e R e c o v e r y
The following are some strategies in service recovery in service failure.
1.Plan and implement policies and processes for obtaining, managing, and reporting
positive and negative customer feedback.
Do not forget to include both official and informal feedback such as spoken remarks,
written praises, and complaints, as well as requests made by email, comment cards,
polls, social media, and phone calls.
2.Remember that customers have a lifelong worth and this while thinking about the
customer service journey.
3.Facilitate consumer feedback by making it as simple as possible for them to provide
it. Be creative and look for new approaches, changing them periodically to prevent
feedback fatigue. You can also promote customer and staff feedback by offering
rewards.
35. 4. Keep a record of all input, including the date and time, the names of the
people involved, the steps taken to address the situation, and the remedies
that were agreed upon. Foster an open and trusting environment by
encouraging staff to disclose near misses and errors, knowing that they will
be treated with respect and utilized to inform changes.
5. Analyze the input you received. Electronic tools, particularly for trend
monitoring, may make this procedure much more straightforward. Use
problem-solving methodologies, such as Ishikawa's fish bone analysis to
discover the underlying cause of any given scenario.
36. S t r a t e g i e s in S e r v i c e R e c o v e r y
P A G E 1 9
The following are some strategies in service recovery in service failure.
6.Measuring feedback and establishing service recovery and complement
objectives are essential steps in the process.
7.Plan how complaints will be handled. For example, a basic flowchart or
acronyms might be helpful: Believe, Listen, Apology, Sympathize and Thank
(BLAST) or LEARN (Listen, Empathize, Apologize, Resolution and Notify).
8.Make sure you have a feedback loop in place. Inform and educate
employees on rules, customer complaints,
service recovery processes, and lessons learned in an organized and
systematic manner. Give staff the authority to deal with issues on their own.
