Contents

• Introduction 2
• Service Failure and Customers 3
• Types of Service Recovery 5
• Developing a service recovery plan 7
• Findings and Conclusion 9
• References 11

Description

Businesses have always been based on the strength of relationships between the individuals or organizations in question. This has been true despite numerous rapid advances in the fields of technology, transportation, management, economics and others. If anything, these developments have increased the value of relationships between the parties in question. This is true for B2C, B2B, and other types of businesses (Schweizer, 2005). Research has always explored the various dynamics of the relationship between customers and businesses. For example, the various intricacies of the buyer-seller relationship are still being investigated. These factors indicate that it is extremely important to develop and maintain customer relationships. In fact, many companies today have dedicated customer relationship management departments. Technology has also developed in this direction with the availability of a number of CRM software (Brown, 2000). Customer relationships have also gained importance in today's world due to the intense competition that exists between private businesses today. This change has been rapid from an era in which customers were taken for granted. Factors such as word of mouth and loyal customers are extremely important to organizations. Better customer relationship management is not only in alignment with the vision and mission statements of various organizations, it has proven to make good business sense. The various phases that a potential customer passes through before he becomes an actual customer of an organization mean that it is extremely costly for organizations to develop loyal customers continuously. Instead it is cheaper and mutually beneficial for organizations to maintain customers who have been loyal to the company. Therefore, service recovery has emerged as an important force in the face of these developments. Through effective service recovery, it is not only possible to turn dissatisfied customers into loyal ones, a number of other positive benefits are realized within and outside the company such as a better customer centric work culture, positive marketing and various others (Goodhue et al. 2002). Therefore, in the below sections, we examine the various aspects of service failure and service recovery. In particular, we try to develop an effective service recovery strategy for a service failure experienced by a passenger of Virgin Atlantic so as to convert him into a satisfied customer.