Exam 13: Managing Service Failures and Implementing Effective Recovery Strategies

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• The customer's perception of whether the recovery strategy is just includes evaluations of the recovery process itself; the outcomes connected to the recovery strategy; and the interpersonal behaviors enacted during the recovery process. Accordingly, perceived justice consists of three components: distributive justice procedural justice, and interactional justice.
• Distributive justice focuses on the specific outcome of the firm's recovery effort. In other words, what specifically did the offending firm offer the customer to recover from the service failure, and did this outcome (output) offset the costs (inputs) of the service failure? Typical distributive outcomes include compensation (e.g., gratis, discounts, coupons, free upgrades, and free ancillary services); offers to mend or totally replace/reperform; and apologies.
• The second component of perceived justice, procedural justice, examines the process that is undertaken to arrive at the final outcome. Hence, even though a customer may be satisfied with the type of recovery strategy offered, recovery evaluation may be poor due to the process endured to obtain the recovery outcome. For example, research has indicated that when implementing identical recovery strategies, those that are implemented "promptly" are much more likely to be associated with higher consumer effectiveness ratings and retention rates than their "delayed" counterparts.
• Interactional justice refers to the manner in which the service recovery process is implemented and how recovery outcomes are presented. In other words, interactional justice involves the courtesy and politeness exhibited by personnel, empathy, effort observed in resolving the situation, and the firm's willingness to provide an explanation why the situation occurred.
• A limited amount of research exists that specifically examines the influence of perceived justice on recovery strategy effectiveness. However, the bottom-line is that the three components of perceived justice must be taken into consideration when formulating effective service recovery strategies.