Topic 8. Fixing Service Failures

ILOILO CITY COMMUNITY COLLEGE
Bachelor of Science in Tourism Management

THC5 Quality Service Management in Tourism and Hospitality
Topic 8: Fixing Service Failures
Time Frame: 1 week
I. Learning Outcomes:
At the end of this module I can be able to:
• Explain the meaning of service failure
• Categorize service failures into four different types
• Identify possible reactions of dissatisfied customers in response to service failure and ways to recover from them
• Describe the characteristics of a good recovery strategy
II. Learning Materials:
Smartphone or computer, internet access
III. Learning Activities
When something goes wrong in the delivery of a service, it is called a service failure.
As noted earlier, the best way to handle a service failure is to prevent it before it occurs by using proactive or preventive strategies
such as blueprinting, PERT/CPM, simulations, and fishbone analysis that we have covered in Topic 5. Yet, despite the greatest of
efforts in the planning phase, not all failures can be prevented. Therefore, quality must be constantly monitored and measured
during the delivery phase to minimize failure and ensure success, which we have covered in Topic 7. But when a failure does occur,
steps should be taken to fix it, ideally on the spot for the guest.
Types of Service Failures
1. Service product failures – These include any failure in:

• the core service products (e.g. cold or poorly prepared food,
unavailable hotel room, or broken attraction)
• the service settings (e.g. dirty or smelly rooms, no directional
signs, or overly worn carpets); and
• the service systems (e.g. out-of-stock items, inoperative credit
card machines, or disorganized servers)
2. Failure to meet explicit or implicit customer requests – These include any inability to provide what guests ask for, such as
special requests on menu items, non-smoker being put in a smoking room, or not honoring a reservation.
3. Failures caused by employee actions or inactions – These include both intentional and unintentional acts such as showing
rudeness or bad attitude or not presenting a meal or bill in a timely way.
4. Failures caused by other guests, random events, or circumstances beyond the control of the organization but which
guests will be expected to be fixed.
The Customer’s Response to Service Failure

The unhappy or dissatisfied customer is the focus of service recovery – the organization’s attempt to make right or compensate for
a service failure. An unhappy customer can do any one or combination of four actions:
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Never Return
First, the customer can leave vowing never to return. Here, the
company has lost a stream of potential future revenue. As already
noted, lifetime customer values can be substantial, and when guests
walk out vowing never to return, it all goes away.
One main reason for empowering servers to provide on-the-spot

service recovery is to keep dissatisfied customers from leaving that
way. Fixing a service problem before the guest leaves the facility is the
best thing you can do to diminish the impact of a failure and prevent
loss of that customer’s future business.
Complains
The second action a customer can take is to complain to someone in
the organization. A popular book on this subject is A Complaint is a
Gift. Good hospitality managers believe that to be true. They
encourage guests to complain and thank them when they do. Hart,
Heskett, and Sasser wrote in The Profitable Art of Service Recovery,
“The surest way to recover from service mishaps is for workers on the
frontline to identify and solve the customer’s problem.”
Just as handling a complaint well can be to the organization’s benefit,

handling it poorly or not at all can hurt badly. If a dissatisfied customer
complains and then finds the organization can’t or won’t fix the
problem, the organization has now failed the customer twice, and everyone the customer knows will hear about it.
Bad Mouth the Organization

The third action an unhappy customer can take is to bad mouth the company, telling everyone who
will listen about the terrible experience. If the negative experience was costly for the customer wither
financially or personally, the customer is even more likely to spread the bad word. The greater the
costs to the customer, the greater the motivation to tell. Obviously, the more important the
experience is to the customer, the quicker the customer will complain, leave, and tell people about
the experience.
Retaliate
The fourth action an unhappy guest can take is to find a way to retaliate.
Getting back at the offending company can take several forms:
• take their concerns to the press, newspapers, or their legislative
representative
• create nongovernmental organizations (NGOs) to protest the
organization and the practices that have led to the service failure
• organize boycotts against the company
• file lawsuits that take company time and money to resolve
• take out their frustration on the company’s employees
Recovering From Service Failure

While the exact mechanisms of a good service recovery system will depend on the specific nature of business and its service
product, in general a service recovery strategy should satisfy several criteria.
First, the strategy should ensure that the failure is addressed quickly and fixed in some positive way if possible.
Second, recovery strategies must be communicated clearly to the employees charged with responding to customer dissatisfaction.
The service people must know that the organization expects them to find and resolve customer problems as part of their jobs.
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Third, recovery strategies should be easy for the customer to find and use. Finally, they should be flexible enough to accommodate
to both the different types of failures and the different expectations that customers have of their guest experiences. The service
recovery strategy developed should be based on management understanding that because the customer defines the quality of the
service experience, the customer also defines its failures and the appropriateness of the recovery strategies.
No Better Makes It Worse

A strategy that does not improve the situation for the complaining customer is
worse than useless because the organization makes it obvious that it can’t or
won’t recover from failure even when informed of it.
Costs of Failure to Guests

One reason that customers may view many recovery strategies as insufficient
is that they do not really consider all of the costs to the customer. Bad meal?
Replace it. The park attraction broken? Give a complimentary one-day return
pass. Busy signal on the telephone line for airport information? Add a
recorded apology.
After such recovery efforts, the organization may think that the relationship is back where it started but, for the customer, many other
tangible and intangible costs may be associated with failures. The effective organization will try to identify these costs and include
some recognition of them in selecting the appropriate service recovery. After all, the customer will think the fact that the service
failed is “not my fault” (e.g. Why should I have to return ten miles to the restaurant because the drive-through people didn’t get the
order right?).
Making It Right Is Not Enough

Customers clearly think that when a failure occurs, organizations need to do more than simply make it right by replacing it or doing it
over again. Of course, organizations should do that, but they should do more.
For example, if a dad tells his family about the terrific time they
will have at a famous resort, uses his only week of vacation to
go there, and spends all extra money he has carefully saved, he
has a lot at stake. If the experience fails somehow to meet the
family’s expectations, the dad loses his time, his money, and his
credibility with his family.
The outstanding hospitality organization systematically

considers how to compensate guests for losses other than
financial and makes extra effort to ensure that dissatisfied
guests not only have their financial losses addressed but the
guests have their ego and esteem needs met as well.
Being Wrong With Dignity

Even when the guests themselves make mistakes, good hospitality organizations help to correct them with sensitivity. That way,
guests leave feeling good about their overall experience and appreciating how the organization’s personnel helped them redeem
themselves.
Imagine how depressed you would feel if you came back to the parking lot after a long day at an amusement park to find out that
you have lost your car keys and are locked out of your car. Then you see the park’s “Auto Patrol” coming to your rescue. They even
make you a new set of keys for free!
Even though such problem is not the fault of the organization, it believes that the guest needs to be wrong with dignity. It knows that
the guests who are angry at themselves may transfer some of the anger to the organization. To overcome this very human
tendency, guest-centric organizations find ways to fix problems so that angry, frustrated people leave feeling good because a bad
experience has not been allowed to overshadow or cancel out all the good.
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References:
Ford, R. C., Sturman, M. C., & Heaton, C. P. (2012). Total Quality Management for Hospitality and Tourism (Philippine Reprint Edition). Cengage
Learning Asia Pte. Ltd.

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ILOILO CITY COMMUNITY COLLEGE

Bachelor of Science in Tourism Management

III. Learning Activities

Types of Service Failures

1. Service product failures – These include any failure in:

The Customer’s Response to Service Failure

One main reason for empowering servers to provide on-the-spot

Just as handling a complaint well can be to the organization’s benefit,

Bad Mouth the Organization

Recovering From Service Failure

No Better Makes It Worse

Costs of Failure to Guests

Making It Right Is Not Enough

The outstanding hospitality organization systematically

Being Wrong With Dignity

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