1.0 Introduction
In service industries, in order for service providers to satisfied customer is not an easy task. The demand and expectation of customer is more complex in nowadays, but disappointing and lead to unsatisfy would be very easy. However, in order to retain the customer and maintain a good relationship with customers it requires the organization providing the best service to fulfill customer needs and wants.
Services are unlike selling products that tangible and can be kept by the customers, services is an activities that is intangible and providing an experience and cannot be kept that offered by the firm to another. (Lovelock et al. 2005). It provides time, place and from utility, and also delivery information, value and care. (Lovelock, Patterson and Walker, 2004) Such as a customer purchase a movie ticket from cinema. The movie that has been seen by the customer is an experience of an example of services provided by the firm.
Hence, in this modern day, customer's needs and wants are more complex to be accomplishing by not willing to pay more for better service quality. Such as a theater provides excellent services in movie, but double the price of other competitors; customer would head for the cheaper price but normal services for a movie watching.
However, in service industries no matter how hard and how good on maintaining customer, there will still be service failures even apply for top service organization. Hence, if unable to escape service failures; services recovery was the key to regain customer satisfaction by carrying out several methods. Service recovery is crucial for service industries, the organization may fall when service recovery method fails.
2.0 Manage employee for service industries for better competitive advantage.
According to Lovelock and Wirtz, (2007), "the most demanding jobs in service industries were those in front-line positions. These employees were working in the circumstances of facing both internal and external boundary by customer-facing in the organization" (Pg. 310). Organization were expected them to be fast and efficient dealing with their task, whereby courteous and helpful in dealing with customers. Unless operations and marketing managers created a solution to balance up these two sets of objectives, so that the employees may needlessly to be stressed by conflicting demands by both.
Front-line employees usually don't get along in teams; they are the key input to deliver excellent services and competitive advantage. When they are high-contact services, employees are a highly visible part of the product each and every time a customer uses it. However, in low-contact services, employees were approached such as by phone, mail, or e-mail and rarely seen to play a significant role in building customer confidence on those occasions when they are contacted to handle special requests or resolve problems.
However, "today's successful service organizations stands a firm commitment to effective management of human resources, including recruitment, selection, training, motivation, and retention of employees" (Lovelock and Wirtz, 2007, Pg. 311). Organization that shown this commitment understand the economic payoff from investing in their people. These firms are also stated as the role modeling by top management. It would be hard for competitors to duplicate high-performance employees than any other corporate resource.
2.1 Front-line work Difficulty and Stress Lead to Service Failure
There is a conflicts for service staffs between what their job scope and their own personality, self perception, and beliefs. For example, the organization may require the staff to smile and speak toward customer with a polite and soft tone in a friendly way. But some staff may have a personality talking with loud and impolite tone. Hence, in order to provide excellent service quality requires an independent, smart, and friendly personality. However, these people were only able to be found with higher self-esteem but most front-line job were treated as low-level jobs which applicable for low education, offering low pay and often lack prospects for advancement. The firm neglected the importance of front-line and perceived it is not a professionalize job but actually it representing the whole firm's brand and service quality.
On the other hand, there's interclient conflict that occurred for the front-line staff such as approaching typical customers such as customer whom talking on cell phone in cinema, sticking bubblegum under table or littering when there's no littering sign, and this situation actually seen by the service staff will be inform the customer and may be offended to the customer. According to Lovelock and Wirtz, (2007), "this is a stressful and unpleasant task, as it is difficult by satisfying both sides."
2.2 Several types of Service Failure and Causes.
According to Bennett, et.al. (2003), "customer dissatisfaction occurs when service failures take place. Service failure is a breakdown in the delivery of a service" (Pg. 332-333). This could be major failure by not delivering the services toward the customer such as not undertaking a medical procedure when scheduled, not committed or implementation of aspect of the service available.
According to Bennett, et al. (2003), service failures are categorized as four key areas such as:
i) The service itself - such as when a customer receives a sugarless Coke which suppose to be given a normal Coke instead in a restaurant or given Sprite that receives someone else's order.
ii) Service providers - Sometimes service fails because the service provider behaves and with inappropriately attitude such as being rude to customer, unfriendly, and not looking at the customer while serving them.
iii) Things beyond the service provider's control - for some circumstances, there are service failures that are outside the service provider's control such as electrical failures that causes lift to stop functions.
iv) Customer related - sometimes service failures can be the results of expectation behavioral possessed by them.
Figure 1
Service failures identified by customers
Category 1 - service
Unavailable service: Examples:
Wrong product Sugarless Coke instead of
normal Coke.
Wrong Price Pay more than expected.
Waiting too long Room was not ready on time.
Category 2 - service providers
Unprompted and unsolicited employee actions: Examples:
Truly out-of-the-ordinary employee behavior Rudeness and Offensive
humour.
Category 3 - things beyond the service provider's
control
Environment factors Examples:
Non-human causes wet weather
Behavior of the organizations electric failure
Category 4 - Customer related
Examples:
Unavoidable customer behaviors accident, guest injured.
Avoidable customer behaviors guest lost wallet, guest
arrived early
Behavior of other customers Intoxicated customers and
Loud behavior
Sources: Bitner, Booms & Tetreault 1990; McColl-Kennedy & Sparks 2003.
The following are examples for the first category, is a core service failure.
Service failure 1: where the service is unavailable.
There's a client appointed at Starbucks Coffee to discuss about a marketing contract. We ordered Mocha and a Cappuccino. Whereby both coffees came out lukewarm during our discussion and there's no staff followed up to find out whether we need any other refreshments. However, when we paid at the counter, I informed the waitress that our coffees were not hot enough and that she mentioned it may be the machine having problems therefore she apologized and refunded our money. At first, I felt disappointed with this café service but when the waitress apologized and refunded our money for their service failure, I would be happy to visit this café again.
Service failure 2: Service provider such as out-of-the-ordinary behavior.
There's a lady whom browsing through some dress in a women's dress shop and accidentally made the dress fell. She bends down and picks it up but the shop assistant raised her voice and yelled at her and having such a fuss about the dress falling to the floor and told her that the dress was very expensive and that customer should be more careful. The other shopper immediately looked at the lady when the shop assistant yelled that situation definitely made the lady felt uncomfortable and she seems to be frustrated and left the shop. With this negative attitude of the shop assistant, the shoppers around would spread around about this situation happened.
Service failure 3: that is outside the service provider's control.
Amin's family was prepared to go for a vacation at Bangkok, Thailand. However, when his family were applied annual leave from company and ready to go for vacation. There came a news Bangkok is having a chaos that cause by the political issue happening in Bangkok, Thailand. Therefore, Amin's family was forced to cancel the vacation to Bangkok to avoid getting involved in the chaos.
Service failure 4: Customer related failure.
There's a family whom queuing up at the theme park for the Tower of Terror ride. That boy was so exciting to take the ride. They were lined up and waited for twenty minutes. Finally, it was their turn, unfortunately when that boy got close to the ride, he is disappointed when he discovered that he require two more centimeters height for the requirement of the ride.
On the other hand, when customers are dissatisfied, they will have several choices. The customer may have take action such as make a complaint, discontinuing the service, spreading negative stories toward friends, take legal action or boycott the service provider.
Complaint defined as expressions of dissatisfaction or disapproval. Complaints were the most unwilling to be received by the service provider. However, this should be view positively rather than negative because without complaints there will not have the opportunity to identify the problem and resolve the problems to make improvement.
People most likely to tell negative stories rather than positive ones about their experiences with the service provider and the individuals involved. According to Bennett, et al. (2003), that dissatisfied customer told is twice as the people their negative word-of-mouth story than satisfied customer spreading positive experiences.
However, nowadays customers would prefer switching to other service provider rather than informing the current service provider that they are unhappy or dissatisfied with the current service, and many engage in negative word of mouth.
However, complaints will be received by organization such as displayed complaints box or sometimes the organization used as suggestion boxes, in a obvious place in the foyer or reception area of the organization by making ease for customer to drop a suggestion or complaints.
3.0 Service Recovery and Obtaining Feedback/Complaints
According to Lovelock and Wirtz, (2007), the first law of service productivity and quality would be doing it right. However, there's nowhere to avoid or prevent failures to occur, for some reason that could be in some circumstances that beyond the organization's control. For example, some unique services characteristics as real-time performance, involving customers, and human as the service provider of the product significantly increase the rate of service failures. Complaints and problems resolving by the organization efficiently or inefficiently determined the relationship, customer loyalty and retaining present customers to head for other competitor.
Hence, discovering effective service recovery strategies is insufficient. Implementing service guarantee forces group to acknowledge the cost of service failures. For example, management acknowledges the organization's mistakes and for the individual employees shall learn from their own so that action can be taken immediately to resolve problems. Furthermore, customer's complaints and feedback are vital to ensure the information is collected accordingly and analyzed in ways that will improvement toward the service providers.
3.1 Methods of Customer Complaints to Service Failures
However, when a customer's approach dissatisfaction on service or some service that does not meet the customer's expectation or satisfaction. According to Lovelock and Wirtz, (2007), customer would take action such as complaining informally to an employee, request to see the manager, or file a complaint. However, some customer would just silently mutter and grumble to their friends and family or stop continuing dealing with the present service provider and go with an alternative service provider when dissatisfied occurred.
Unfortunately, among those customers who don't complain about the poor service. According to Lovelock and Wirtz, (2007), "Research has been done had shown that most people fail to complain, especially if they think it will do no good" (Pg 391). They are actually wrong because without complaints, the organization would be no where to identify the service failures or mistakes to make improvement or correction to enhance an efficient service.
However, there are several actions that a customer may take toward a service failure. Below shown at least three actions:
1) There is some form of public action included complaining to the firm or to a third party such as complaining to customer affairs or regulatory agency, or even a civil court.
2) Take some form of private action such as abandoning the supplier.
3) Take no action.
Figure 2.0
Any One or a Combination of These Responses is Possible
Sources: Lovelock and Wirtz, (2007).
However, it is vital to remember that a customer can pursue of alternative. Manager should be always take note that this service failures shall not go far beyond loss on future profitability from that customer.
Furthermore, in these modern days, dissatisfied customer would be using internet to spread word-of-mind (WOM) throughout all the people whom surfing on internet by posting complaints on the internet community such as bulletin board or forums. Somehow, there are some people even created their own website to publicize their bad experience through blogging which is a trend for most of the young teenager and this blogging would be having a great influence toward internet audience whereby public may go through some bloggers to obtain information by doing some research on reading these blogger's blog.
On the other hand, in order to discover or implement effective service recovery methods. The manager shall understand the dissatisfied and complaining customers before dealing it effectively.
Hence, commonly consumer behavior have identified four main reason for complaining which is firstly obtain restitution or competition because customer usually made complaints for compensation or have the service to perform once again. Second, vent anger, customer made complain to rebuild self-esteem or just plain release anger and frustration toward the service provider. Thirdly, help to improve the service, when customers are involved with the service, they give feedback to try and contribute toward service improvements. Lastly, for altruistic reasons, some customers are motivated by altruism. (Lovelock and Wirtz, 2007, et. al, (Pg. 392)
3.2 Service Recovery Strategies
An effective service recovery strategy is vital toward unsatisfactory experienced customers. There are several strategies that can be taken to overcome the causes of service failures. The main would be making it easy for customer to give feedback/complaints. For example, many companies has different way to collect complaint and feedbacks such as adding special toll-free phone lines, homepage of the website with the links that provided customer to leave feedbacks or complaints, somehow provided feedbacks and comment cards at the café or counter. Some company even provided immediately responses when feedback received. (Lovelock and Wirtz 2007)
However, enabling effective service recovery is significant because it takes more than just sincere expression to resolve the problem may occur. According to Lovelock and Wirtz, (2007), "It requires commitment, planning, and clear guidelines. Specifically, effective service recovery procedures should be proactive, planned, trained, and empowered" (Pg. 397). In addition, in this modern day, according to Lovelock and Wirtz mentioned above proactive, planned, trained, and empowered is just not enough. Service industries most significant that represents the service were the front line staff, therefore motivation of employee are vital.
On the other hand, service recovery needs to be resolved immediately when problems occurred, ideally before the customer made a complain. For example, doing the job right at the first time and always handle complaints effectively will greatly affect the satisfaction and loyalty of the customer. For example, a customer found out the air conditional was broke down and called the staff, the staff immediately change another room for the customer and repair the broken air conditional after settle the customer problems. This is an example of proactive service recovery should be.
Hence, a recovery procedure needs to be planned. An emergency backup plan shall be developed before service failures occur, specifically for regularly occurring case and cannot be designed out of the system. For example, commonly overbooking for hospitality industries are regularly occur and travelers are denied boarding are walked even though they had confirmed the reservation. Therefore, the firm should develop predetermined solution sets for the front-line staff.
However, recovery skills must be taught or trained to prevent the employee falling into a dilemma state that gave a customer feel insecure at the point of service failure. In general, if a customer has problems occurred will immediately look for employee assistance, therefore effective training builds confidence among the front-line staff, and enhance the effect for them to turn distress into delight. (Lovelock and Wirtz 2007), (Pg. 399)
Furthermore, recovery requires empowered employees. Service recovery can be done by flexible and empowered employees to use their intelligence to make judgment and communication skills to discover the solution that will satisfy the dissatisfied customers. Especially those extraordinary failures which the firm may not developed any pre-solution sets, but the employee able to come up with a solution such as gaining the authority to make decisions and spend money to resolve service problems promptly to recover customer's goodwill.
Lastly, motivation of employee. Service recovery not only emphasize on customer but to understand the needs and wants of the employee in order to have them providing the best services all the time. For example, a hotel front-line staff was motivated and satisfied with the present job, a cheerful and warm smile will be brought and influenced the customer to feel the comfort of dealing with this service provider.
4.0 Service Guarantees for Service Delivers Failure
Service guarantee is a promising when the service delivers failure to meet the standardization, the customer will be entitled to gain some forms of compensation when the service does not provided. For example, refund, claim replacement, or credit. Most of the firms put terms and conditions on these guarantees to prevent people whom abuse this service guarantees, some of the firms offer them unconditionally.
According to Christopher Hart, "that service guarantees are powerful tools for both promoting and achieving service quality, for the following reasons." (Lovelock and Wirtz, (2007), (Pg. 400)
Such as guarantees force firms to emphasize on the needs and wants of customers for the principle of the service. Second, guarantees set standardization, informing the customer and employee what the company stands for. Managers will be taken guarantees significantly by payout to compensate customers for poor service. Thirdly, guarantee requires implementing systems for generating meaningful customer feedbacks and response on it. Fourth, guarantees force many service firms to identify the service failure and encouraging them to overcome and discover solution on failures. Lastly, guarantees enhance a great effect by reducing customer changing to other alternative service provider and creating great customer loyalty.
According to Tucci and Talaga, "from customer's perspective, the primary function of service guarantees is to lower the perceived risks associated with purchase." However, when there is guarantee existed there will be more customers more likely to make complain because they will anticipate the front-line employees so that must be prepared to resolve problems and provide adequate compensation. Sara Bjorlin Liden and Per Skalen says "even when dissatisfied customers were unaware that a service guarantee existed before making their complaint, they were positively impressed to learn that the company had preplanned system for resolving failures and to find that their complaints were taken seriously." (Lovelock and Wirtz, (2007), Pg.400)
On the other hand, the benefits of service guarantees such as Hampton's strategy by offering refund the cost of the room to a guest who expresses dissatisfaction has been attracted more n more customers. The condition would be is dissatisfied occurred, the customer would not need to pay.
4.1 Design Service Guarantee
Designing service guarantees can be simple and unconditional. It appears to be written by lawyers and contain many terms and condition restrictions. The service prospective which guarantees the customer binds the trust and confidence in both parties and determining the customer like to do business with the supplier.
First of all, unconditional, this is what is promised from the service guarantee should be absolutely unconditional and no any other element of surprise for the customer such as having some hidden restriction. For example, United State Postal Service Express Mail Guarantee if the shipment is mailed at a designed USPS Express Mail facility before the specified deposit time for overnight delivery to the address or agent will be attempted before the applicable guaranteed time. If the delivery attempt is not made by the guaranteed time, the mailer could claim for refund, unless the delay was caused by proper retention for law enforcement purposes or incorrect address.
Secondly, service guarantee has to be easy to understand and communicate to the customers so that is clarify about the benefits that can be gained through the guarantee and meaningful to the customers in that the guarantee is significant toward the customer such as compensation should be more than usual to cover the service failures.
In addition, easy to invoke is the less of the guarantee shall be depending on the customer and focus on the service provider more. However, easy to collect, when a service failures occurs, the customer shall be able to collect the guarantee easily without any issues.
Lastly, credible that the guarantee is not for any strategies or fraud purpose to attract customers but believable and deliver when service failures occurred. (Christopher Hart, No Date)
5.0 Service Quality (SERVQUAL)
SERVQUAL is use to measure the service quality. Customer assessments of service quality was measured by three types of services, for example, telephone repair, retail banking, and insurance. Except for retail banking, all the services are different from the original service that used for this study to develop SERVQUAL. (PZB 1988, Pg, 421)
5.1 Service Industries Elements for Quality
Hence, the nature of services requires a unique approach to determine and measure service quality. According to Valarie Zeithaml, Leonard Berry, and A. Parasuraman, they found a high degree of correlation between several of these variables and so consolidated them into five broad dimensions.
1) Tangibles - Physical elements that able to seen. For examples, the attractiveness of the hotel facilities and front line staff were well dressed in manner.
2) Reliability - Dependable, able to deliver the service with accurate performance. For example, when a customer booked for a room and it happens to be insufficient room. Front-line staff promised to call back after checking the availability of rooms after an hour, and the front-line staff did call the customer after an hour.
3) Responsiveness - Able to provide efficiency assistance, helpfulness, promptness when assist is requested. For example, when a problem is occurred such as air condition broke down for the room that customer just checked-in, customer requested assistance. The employee switches another room for the customer.
4) Assurance - Competence, courtesy, credible, and security to assure that the service could be delivered without any restriction.
5) Empathy - Easy access, excellent communication skills, and understand the customer needs and wants.
5.2 Limitation of SERVQUAL
SERVQUAL has been used all over the service companies, but have been expressed about both its conceptual foundation and methodological limitations. According to Lovelock and Wirtz, (2007) "Anne Smith notes that the majority of researchers using SERVQUAL have omitted from, added to, or altered the list of statements purporting to measure service quality"(Pg. 420). However, in reality SERVQUAL were used to measure two factors which is intrinsic service quality and extrinsic service quality. This finding does not under the value of Zeithaml, Berry, and Parasuraman's achievement by identifying the key under constructs in service quality, but they emphasize the difficulty of measuring customer perceptions of quality and need to customize dimensions to measure the research context.
