Service Failures and Recovery in Tourism and Hospitality: A Practical Manual Erdogan Koc

Chapter 2 Understanding and Dealing with Service Failures in Tourism and Hospitality

Learning Objectives Define and explain a service failure. Explain when and why a service failure occurs. List and describe the different types of service failures. Describe how hospitality managers can learn from service failures. Explain how to properly deal with a service failure in a hospitality setting. Describe the important steps that lead to selecting the most appropriate recovery strategy for a specific service failure.

Defining Service Failure When something goes wrong in the delivery of a service, it is called a service failure. In the hospitality industry, when a hospitality organization falls short of the customer’s expectations then a service failure occurs. Service failures are quite common in hospitality settings as there is a high level of interaction between guests, passengers, patrons and the hospitality employees (waitresses, flight attendants, servers, bartenders, front desk agents, etc.).

Moment of Truth A moment of truth refers to a single incident where there will be a person-to-person interaction between the guest and the hospitality employee. These interactions can be face-to-face, over the phone, on the Web, or by mail, e-mail or texting. The success or failure of the guest experience strongly depends on how a single moment of truth between a hospitality employee and the guest is handled.

The Characteristics of Services Intangibility Inseparability Heterogeneity/variability Perishability

Intangibility Unlike physical products, the hospitality product cannot be seen, tasted, felt, heard or smelled before it is purchased. The hospitality product is experiential only and guests, travellers, passengers, patrons, etc. will not know the quality of the product until after they have experienced it. They can only rely on what they will read on the resort hotel’s brochure, website and in guest reviews; and in what they see in photos of the hotel property they will look at, or in a virtual tour they might take online.

Inseparability Unlike physical goods that are produced, then stored, later sold and still later consumed, the hospitality product is first sold and then produced and consumed simultaneously. Customers and employees must understand that service-delivery system because they are co-producing the service. Therefore, they both need to respect each other. The issue of emotional labour.

Heterogeneity/Variability Services are highly variable and heterogeneous as they depend on who provides them, when and where and for whom they are provided. A number of reasons can lead to service variability. Services are produced and consumed simultaneously, which limits quality control. The heterogeneity characteristic of services is largely connected with the vagaries of human interaction between and among service contact employees and consumers. No two services will be exactly alike as the person who delivers the service could have a different attitude or be in a different mood during that time.

Perishability Services cannot be stored. Revenue lost from not selling the rest of the rooms, tables or seats is lost forever. Hospitality organizations have come up with other ways to tackle this issue, such as charging guests holding guaranteed reservations when they fail to arrive or selling their product at a very low rate rather than letting them go unsold.

Types of Service Failure Service product failures. Failure to meet explicit or implicit customer requests. Failures caused by employee actions and inactions. Failures caused by other guests, random events, or circumstances beyond the control of the organization but which guests will still expect to be fixed. Ford et al. (2012, pp. 440-441)

Service Product Failures Any failure in the core service products Service settings Service systems Unavailable service Slow service

Failure to Meet Explicit or Implicit Customer Requests Inability to provide what guests ask for Inability to respect and grant special requests Inability to respect special needs Inability to respect special preferences Inability to honour a reservation Customer errors

Failures Caused by Employee Actions and Inactions Intentional or unintentional acts The level of attention Any unusual action Cultural norms Adverse conditions

Other Service Failures Failures caused by other guests Random events Circumstances beyond control of the organization but which guests will still expect to be fixed Drunkenness Verbal and physical abuse Breaking company policies and rules Dealing with uncooperative guests

Hoffman, Kelley and Rotalsky’s (1995) Types of Service Failures Category ‘service delivery system failures’ Product defect failures Slow/unavailable service failures Failures deriving from facility problems Failures related to unclear policies Failures related to out-of-stock conditions such as inadequate supply of menu items Category ‘implicit/explicit customer requests’ Food not cooked to order Failures related to seating problems

Hoffman, Kelley and Rotalsky’s (1995) Types of Service Failures Category ‘unprompted/unsolicited employee actions’ Failures occurring due to inappropriate employee behaviour Service failures based on wrong orders, lost orders or guests being mischarged

Customers’ Response to Service Failures in Hospitality Settings Visible and invisible consequences of service failures (Koc et al., 2017). Three types of customer participation (Koc et al., 2017): a) Mental participation b) Physical participation c) Emotional participation ‘When customers participate in the service, they seem to care less for the negative outcome arising out of a service failure’ (Koc et al., 2017, p. 395). Gender and younger guests do matter.

Customers’ Response to Service Failures in Hospitality Settings Reactions are associated with the severity of the service failure. Generally speaking, if guests are unhappy or dissatisfied with a product or service, they will directly express their concerns face-to-face to the hospitality employee, supervisor, or manager on duty. If their voice is not heard, then they will most likely turn to social media or places such as TripAdvisor or Yelp to write a review, submit their complaint and inform others about their experience.

Customers’ Response to Service Failures in Hospitality Settings Send an e-mail or write a letter upon their return home. They may place a phone call to the customer service line. Directly contact the headquarters and submit a formal complaint through the company’s online complaint form so the problem can be resolved though higher management. Others do not want to be bothered. Others will bypass any sort of interaction with the hotel management or staff and go directly to the internet to report their complaint.

Customers’ Response to Service Failures in Hospitality Settings Those guests who express their complaint to the hospitality organization are guests who are loyal or truly care about the company. Guests who don’t complain are usually indifferent and care very little about the company’s success. There are three primary reasons why people do not complain: They feel it is not worth it They do not know where or how to complain, and They believe that nothing will be done even if they do complain.

Customers’ Response to Service Failures in Hospitality Settings Another factor that could strongly discourage guests’ willingness to express their complaints to hotel management is their participation in services. However, it is unable to guarantee the complete abolition of those complaints. In fact, customer participation can totally backfire. The locus of causality, which refers to guests’ perception of who is to blame, strongly controls their reactions (Koc et al., 2017).

Most Common Mistakes when Dealing with Service Failures Not listening to customers’ concerns. Not taking customer concerns or complaints seriously. Doing nothing about service failures Not realizing the urgency of resolving a complaint or service failure as quickly as possible. Resolving the specific guest complaint, but not taking any measures to ensure it will not happen again.

Most Common Mistakes when Dealing with Service Failures Refusing to receive customer complaints. Inability to identify the most appropriate way to respond to a customer complaint and how to properly handle it. Inability to identify the most appropriate recovery strategy to follow. Avoiding responsibility and blame shifting. Not learning from each service failure that occurs.

Evaluating the Severity of the Situation Service failures are inevitable. Service failures are healthy. Service failures are opportunities. Service failures are marketing tools. Service failures are advertising.

Evaluating the Severity of the Situation Service failure comes in degrees, ranging from catastrophic failures that make newspaper headlines to those that are annoying, to insignificant slip-ups that are barely noticed. They range in frequency from those that happen often to those that are rare. Each customer will perceive differently the severity of a service failure.

Evaluating the Severity of the Situation When a service failure occurs, the hospitality manager should: Carefully evaluate the situation Make sure to ask the right questions Conduct a thorough investigation as to what really happened, and Gather all the facts to have a clear picture of the incident in order to determine the most appropriate service recovery strategy.

Defining Service Recovery Service recovery is the integrative actions a company takes to re-establish customer satisfaction and loyalty after a service failure (customer recovery), to ensure that failure incidents encourage learning and process improvement (process recovery) and to train and reward employees for this purpose (employee recovery). (Michael et al., 2009, p. 267) Service recovery involves those actions designed to resolve problems, alter negative attitudes of dissatisfied customers and to ultimately retain these customers. (Miller et al., 2000, p. 388)

Eight Important Steps Thank the guest for sharing this valuable information with you. Explain why you appreciate the complaint. Apologize to the customer about the incident and any inconvenience it may have caused. Promise to do something about the problem immediately. Ask the guest for all the essential information about the incident, so you can more effectively try to resolve it. Correct the mistake promptly. Check customer satisfaction. Ensure that appropriate action will be taken to prevent this incident from happening again in the future.

Service Recovery Strategies Thinking that only monetary strategies can fix a problem and make guests happy is a naïve and narrow-minded approach when it comes to managing service recoveries. There are other acts of kindness such as a warm smile, a sincere promise and empathy that can also go a long way. The most important lesson learned, though, that applies to every sector of the hospitality industry, is to fix the problem quickly and fix it well.

Hotel Service Recovery Strategies When it comes to hotel guests, there are the following two types of service recovery strategies: a) those that can be implemented while the guest is still staying at the hotel property, and b) those that will take place after the guest has departed from the hotel.

How to Wow Affected Guests Make time for people and make them the top priority at all times. Show guests how much you truly care about them. Don’t just address the service failure and make up for whatever the cost was (monetary or emotional/psychological, etc.), but take it a step further and wow the affected guest. Great planning, smart use of the information received by technology and your creativity and thoughtfulness can make a difference and create guest loyalty, and significantly improve the hospitality organization’s image.