Effective service recovery is a back bone behind every successful deal. A customer entering with annoyed gesture to a retail formats / customers complaining at bank and expecting instant solution for his problem encountered. If customer is listened and he receives the compensation/ solution for the same will make him satisfied and results in repurchase intention.

“Service Recovery means the action undertaken by the organization to satisfy the customer, after service has failed.” (Zeithaml Valarie A., Gremler Dwayne D., Bitner Mary Jo, Pandit Ajay; 2008). Service recovery importantly plays a vital role after service failure leaves the customer with dissatisfaction and withdrawal behavior. Service sector with its various types of industries commonly shares the concept of service recovery. Nowadays, with globalization, Indian companies are not only targeting Indian customers but also from various countries. Indian companies have to compete with global organization.

Hence few programme have emerged under the banners of Centre of Excellence by various multinational companies. Xeror’s quality endeavor was named as “Leadership through Quality”; Texas Instruments named its programme as “Total Quality Centre”; Ford developed Total Quality Excellence.(Verma Harsh V; 2008). Service Recovery term may be utilized by various service industries in India differently. Banking and Insurance sector have adopted the usage of high-tech, know- how leaving an impact on the perception of quality of service delivered. The employees are trained for web enabled reporting and marketing services. (Shajanhan Dr. S.;2005). These efforts reduce the chances of service failure. The Financial sector has competitors at length. Hence switching of customers is also high too availing the benefit of each bank. Employees are the important asset of the any service industry. As they are front line manager or sales force who interact with the customers regularly. The same kind of scenario can be seen in other service industries like cellular industry. In Cellular industry, the attitude of customer and the service providers are important. How service providers behave, communicate or professionally tackle the customer by providing him with relevant solution to customer complaint. The ratio of customer complaint is high. Hence due care in required to meet customers expectation and retain them. (Shajahan Dr S.; 2005)

According to Shajahan Dr. S. (2005), Customer Relationship Management and Technological ship Marketing is the two technical terminologies acquired to retain the customer and build long term customer relation. He has presented or elaborated difference research of different researchers stating that if you retain a customer it is 6 times cheaper than acquiring a new customer. If retention of customers increases by 5% then firm earn 25% to 80% more. The author highlights Adaptability Rule of 20-80-30 to discuss the similar nature of scenario at retail format and shopping mall. In retail format and shopping mall, products of various types are also available. We nullified product for this study. The rule says 20% contribution of customers converts 80% profit where 30% will be eaten up by defectors (Shajana Dr. S.2005). To reduce those defectors and with globalization as an emerging trend in 21^st century, has given birth to customized service. Where any customer can participate in service recovery. But it is moderate in nature. The understanding is very important to service providers to customize the service. The empathy and timeliness has significance during service recovery stage. To very surprising “The Times of India; dated: 30/12/13; announces a better Indian economy by 2028. India would be 3^rd largest economy. The service industries have replaced agricultural industries in contributing highest in GDP to improve the economy”. Indian economy is influenced by service sector, which is one of the largest contributors. Hence these industries will only flourish if they minimize or avoid service failure, making the customer satisfied in the first visit only.

Service industries who provide services to the Indian customer with the fact that defective services can never make the customer loyal and organization to earn profit.

REVIEW OF LITERATURE:

According to Zeithaml and Bitner (2003): “Service Recovery refers to the actions taken by an organization or service supplier in response to a service failure. Further Mc Collough Michael A; Berry Leonard L; Yadav Manjit S.; 2000 have discussed about Discrepancy between failure expectation and service performance termed as Initial Disconfirmation. Discrepancy between recovery expectation and recovery performance termed as Recovery Disconfirmation. Applying Ancova model, basically findings were lack of support for a recovery paradox effect; Initial Disconfirmation has a great impact on satisfactory than recovery disconfirmation. Initial service performance is a primary predictor of initial disconfirmation. The scope for the same is not limited with one service industry and customer reaction may differ from one to another service industry.

The above contribution by Mc Collough Michael A. Berry Leonard L, Yadav Manjit S.; 2000 focus on gap in actual performance. Services Recovery has various issues, which gives a gap in the studies conducted in response to service failure. The gaps are needed to be seriously cared and minimized to provide expected performance in the service.

Service Recovery as well as said is exception to any service industry. Time and empathy are viewed as vital factor in service recovery. Companies do formulate various recovery strategies to retain their customers (Rao K. Rama Mohana;2007). The employees and customers interaction level is very high in purchasing services. Timeliness and empathy with customer will definitely retain the customer for which further paper discusses that Service involves interaction. Interaction opens a path for getting most balanced shape of customer’s expectation. The practice confirmed by Domino’s to meet customers expectation in a balanced manner. If pizza not delivered within 30 minutes will be delivered free to customers (Verma Harsh V., 2008)

Next important issue is emotion. As when we are interacting with customer we have to ensure that any service performance should not hurt customer’s emotions. Service Recovery may diminish negative emotions towards service failure. The process and outcomes helps to determine whether the customer is loyal or not. The customers loyalty is depending upon no. of time the customer make purchase from the organization. If the service performance problem can be corrected at the time of the same encounter the negative impact of the experience is almost always diminished (Clow Kenneth E; Kurtz David L, 2003).

A customer visiting any type of service organization gathers information or moves blank to organization to gain information about the services. Here again issues emerges of perception of the quality of service. As service recovery need to be perfect. Effective service recovery also leads to enhance perceptions of the quality of the products and service already bought enhanced perceptions of the firm’s competence and favorable image in terms of perceived quality and value (Mc Collough Michael A; Berry Leonard L; Yadav Manjit S; 2000)

Combining discussion of Justice of customers, emotion has been undertaken on cellular industry. Justice as known as perceived justice. Distributive justice, procedural justice, and interactional justice do have significant impact on satisfaction with service recovery. Procedural dimension show strongest influence on emotions. The negative emotions do effects on justice on satisfaction with service recovery (Rio – Lanzo A.B. del, 2009; 775-781).

Emotion and Justice (any of the three dimensions) contribute to individual behavior. Sometimes the frontline manager or sales workforce, when interact with customers may lead to unusual behavior to customer on service. This is how anger is triggered and how service providers can effectively deal with angry customers. There are two phases’ pre-service recovery and post- service recovery. Customer anger is triggered by a service failure that the customer perceives as the service provider’s fault (Nguyen Doan T, R Janet, Kennedy Mc Coll; 2003).

The high/ moderate level of education qualification has given right to participate in service recovery. There are three types of degree of participation- Firm recovery, Joint Recovery, customer recovery which has been considered by different authors. The key understanding is that customer initiates and resolves the services providers. The research results exhibits that service recovery has a significant and positive effect on customer role clarity. Role clarity significantly and positively influences ability in future co-creation. Customer participation in service recovery has a positive and significant effect on intention. Ability, role clarity, perceived value in future co-creation and satisfactions with service recovery all have significant and positive effects on customer intentions towards future co-creation. Further, customer participation in service recovery is not a significant predictor of customer ability in future co-creation (Dong Beibei, Evans Kenneth R, Zou Shaoming; 2007).

The study should always routed with demographic characteristics. Hence eye opener findings can be seen. Gender must be considered for study in any type of service industries. The employees either come across with male / female of varied age. Studies have shown that Gender as important variable under demographic characteristics or as an independent variable. Women have greater expectations than men. The other controllable variables are importance of the service performance to the customers, typicality of the failures or the customer’s belief, frequency of consumption of the service. Customer’s expectation of relationship continuity was significantly related to customer’s service recovery expectation. Hence future research as proposed after finding gender as variable, how would customer respond to reoccurring failures and how this would affect the relationship between organization and customers? Major strategies need to be adopted to tackle different gender.

The main objective of service provider is to satisfy and moreover retain the customer which is very difficult to do. For which, Justice Dimensions affect the customer retention including effect of emotions on customer’s actual behavior response. Few theories such as :-Affects Control Theory has been applied to find the same. The paper showed that no study was found on the effects of interactional justice on emotion. The dimension of justice has also ignored in the social psychological literature as per author. Actual behavior is a dependent is a dependent variable and emotion is a dependent variable. The hypothesis as discussed are i) Service recovery related perception of justice might have both direct and indirect effects on loyalty. ii) Perception of distributive, procedural and interactional justice affects loyalty directly leading to retention to customers. Timeliness has been considered for procedural justice. Interactional Justice was found to be more important predictor of customer retention. Emotions have been considered as very important factor. Education level may also effect necessarily. The higher the education level, they are expected to complaint more and the less they are educated, they won’t complain. Hence, emotions, education qualification, can be considered for future study (Chebat Jean- Charles, Slusarezyk Witold; 2005). This leads to ultimately future scope of immense work on same area.

Lanza A.B. del Rio; 2009 has worked on service recovery, commonly three dimensions of justice has been considered. No. of interesting facts can be found with the dependent variable Justice. Distributive justice positively influences consumer levels of satisfaction with service recovery but it has no effect on emotion which is very contradictory finding with other author. Procedural justice significantly affects satisfaction and emotion triggered by service recovery. Interactional justice significantly and positively influences satisfaction but the postulated effect on emotion is not significant.

Mediating effect of emotion can be seen in the procedural emotion only. All the three dimensions of justices have differences in their relative influences on satisfaction with service recovery. Procedural justice is only dimensions effecting emotion significantly. Further customer perception on justice, satisfaction, intent and WOM intent, where no significant differences were detected among age, gender and length of customer relationship between the samples studied. The satisfaction with recovery and WOM intent path is significant. Satisfactions with recovery and overall firm’s satisfaction path have significant relationship. While the satisfaction with the recovery and purchase intent was insignificant. The overall firm satisfaction has significant relation with purchase intent path. Procedural and interactional justice would have a greater influence on overall firm satisfaction than distributive justice. Satisfaction with recovery influences more on WOM intent that overall firm satisfaction. Lastly overall firm satisfaction has greater influences on purchase intent then satisfaction with recovery (Marcham III James G., Netemeyer Richard G.; 2002).

Among all justice, emotion, customer satisfaction, purchase intent and WOM intent and demographic characteristics commonly plays important role in every service industry of service sector in service recovery with satisfaction.

Practices:

The service industry is very much responsible for customer satisfaction as the products or services produced and consumed at the same time. Hence industries have to be very careful and follow practices which will always focus on customer orientation. If service failure has occurred during the process and outcome, then service recovery play an important role in service recovery with satisfaction. The practices are performed to reduce, minimize the chance of service failure leading to service recovery by the providers.

As well said “Recovery can only mitigate the impact of failure on satisfaction and initial service performance is the primary driver of final satisfaction” (Mc Collough Michael A, Berry Leonard L, Yadav Manjit; 2000). Further Organizations that practice Centre of Excellence on service performance are valued higher. Service Recovery has been taken as an initiative that if something goes wrong during service delivery then, the service recovery can amend the wrong done (Verma Harsh V;2008). Further Harsh V Verma, (2008) included the research of TARP (Technical Assistance Research Programme) on service recovery has given a shocking figure of customers response. 70%-75% of customer doesn’t complaint. A contradictory finding was educated class, young age group, high income class are one who highly complaint. The author has considered complaint as an opportunity. The unhappy customer around 40%- 60% has poor experience when complained earlier, so they don’t complaint (Verma Harsh V.; 2008)

Another incidence was shown when Mohd. Tahir, who paid an average bill of Rs 1334/- monthly was shocked to see when his bill was Rs 89830/- for Aug-Oct 1991 and a bill of Rs 467348/- for Nov- Dec 1991. He did not pay the bill and his connection was cut by MTNL. On filling a suit against MTNL at Delhi: State Consumer Commission MTNL was ordered to pay Rs 5000/- as compensation to Md. Tahir and reconnect the telephone connection and even asked to give away the revised bill to him as MTNL was found guilty (Times of India, 13 June 2005, Pg. 4). The Employee Empowerment to be one of the best practices to satisfy customer and have better performance. Others can be apology, empathy and follow up, etc (Verma Harsh V.; 2008)

Hampton Inn Hotels benefits their customer through customer guarantee. The statement Hampton says “If you‘re not satisfied, we don’t expect you to pay”. This promise and guarantee to the customer made them to achieve additional profit of $ 11 million and highest customer revenue. According to TARP, if customer is not satisfied he/she will communicate the same to at least 7 person (Zeithaml, Gremler, Bitner, Pandit; 2008). Finally Clow Kenneth E, Kurtz David L, (2009) has proposed few steps that can lead to better satisfying customer:

a) Develop a service program

b) Encourage customer to complaint

c) Data of customers who have suffered failure should be regularly contacted

d) Allocation of resource to meet service recovery process.

The recovery can take any shape as desired by customer and service provider. Hence necessary strategies must be practiced to provide first hand satisfied service to the customer.

Service Recovery Strategies

According to Zeithamal (2008); various strategies can be adopted to prevent service failure and not to waste scare resource in service recovery. With the causes of the failures leading to switching behavior of customers. Strategies may prevent switching and retain customer. The below mentioned strategies are:

1. Act quickly- Frontline managers must acknowledge that there is a problem. Take the customer seriously and act quickly on time to solve customers’ problem blaming that customer is wrong.

2. Provide adequate explanations- Generally the problems need proper explanation from frontline employees. He/ She should be given necessary information to resolve the problem.

3. Treat customer fairly- Never cheat customer or pass the problem on customers shoulder. The customer is king and is prime importance.

4. Cultivate relationship with customers- The relationship with customer is very important. Few companies send cards on special days to customer to wish.

5. Learn from service recovery- Once customer has been entertained and provided with satisfactory solution, the experience should be preserved through knowledge management.

6. Learn from lost customer- Unsatisfied customers always switch. Hence learning should be made to retain customer. The switching level of customer is high in Service Industries.

7. Encourage and track complaint- Service Provider should encourage customer to complaint on reasonable problems. Like various courier services maintain their status online to show customers track record of consignment.

8. Employee Empowerment- Organization should empower front line managers to recover service failure. While interaction, they can develop trust on employee and recovery could be effective.

9. Allow customers to solve their own problems- Cisco System has Cisco Connection solve their own service problems totally with no intervention of Cisco personnel.

10. Provide compensation- Customer should be given with adequate compensation for the losses, they suffered.(Sharma Swati, Yaj Medury and Aayushi Gupta; 2011).

11. Provide assurance- One line of assurance may emotionally stable the customer on problem.

12. Own the problem- Frontline managers must accept that yes, there is a problem. The right kind of attitude of employees will never hurt the customer.

13. TQM- Total quality management maintains reliability in customer service. Providing service to customers with 100% no defect.(Pal Piyali;2011)

The above mentioned strategies are practiced by various industries like Cellular, Hotel, and Banking, Insurance, Retail and Shopping mall. The practices and strategies can increase the customer satisfaction and retention with high profit in business firm.

CONCLUSION:

Service Recovery is a burning issue nowadays in service sector. Gender, Education Qualification, Justice, Emotion, Satisfaction with service recovery, etc as discussed can form important variable for research. Thus the conclusion can be drawn that the service industry should try to first focus on meeting the customers need in first time perfectly. As service recovery cannot replace the real essence of service performance and satisfaction from initial performance.

REFERENCES:

Mc Collough Michael A, Berry Leonard L and Yadav Manjit S. (2000). An Empirical Investigation of Customer Satisfaction after Service Failure and Recovery. Journal of Service Research, Vol: 3, No.2, 121-137.

Rio-Lanzo A.B del (2009). Satisfaction with Service Recovery Perceived Justice and Emotional Response. Journal of Business Research , Vol 62, 775-781.

Dong Bibei, Evans Kenneth R and Zou Shaoming( 2007). The Effects of Customer Participation in co-created Service Recovery. Academy of Marketing Science, Vol 36, 123-137.

Hess Jr. Ronald L., Ganesha Shankar and Klein Noreen M.(2003). The Impact of Relationship factors on Customer Satisfaction. Journal of Academy of Marketing Science, Vol 31, No.2, 127-145.

Pal Piyali(2011). Customer retention through Service Recovery. International Journal of Research in Commerce and Management, Vol.2, Issue 12, ISSN 0976-2183.

Sharma Swati, Yaj Medury and Aayushi Gupta, (2011). Satisfaction from Service Recovery in the Context of Indian Hotel Industry. Business and Management Research, VSRD-IJ, BMR, Vol. 1(10), 632-647.

Valenzula fredy Vasquez Panaga, Llanos, Viches(2006). The Influences of Service Recovery Evaluation of Customers Post- Complaint Behaviour. International Journal Of Business and Information, Vol 1(1), 53-73

Chebat Jean- Charles and Slusarezyk Witold(2005). How Emotions Mediate the Effects of Perceived Justics on Loyalty in Service Recovery Situation: An Empirical Study. Journal of Business Research, Vol.58, 664-673.

Maxham III James G and Netemeyer Richard G (2002). Modelling Customer Perceptions of Complaint Handling over time: The Effects of Perceived Justice on Satisfaction and Intent (2002). Journal of Retailing, Vol.28, 239-252.

Hoffman K Douglas, Kelley Scott W. and Rotalsky Holly M (1995). Tracking Service Failure and Employee Recovery Efforts. The Journal of Service Marketing, Vol.9.No.2. 49-61.@MCB University Press.

Analyzing Recovery Failure and Recoveries: A process approach (2001).Vol.12, No. 1, 20-33, MCB University Press 0956-1233.

Bibliography:

Verma Harsh V. Service Marketing- Text and Case. Pearson Education; Chapter 12, Pg 388-412, ISBN- 978-81-7758-673-2; 2008.

Zeithaml Valarie A, Gremler Dwayne D, Bitner Mary JO and Pandit Ajay. Service Marketing –Integrating Customer Focus Across the Firm. 4^th Edition. The Mc Graw Hill Companies, New Delhi: 2008; ISBN-13: 978-0-07-066007-6.Pg 218-249.

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Received on 10.01.2014 Modified on 18.01.2014

Asian J. Management 5(2): April-June, 2014 page 250-254