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Service recovery paradox
The service recovery paradox (SRP) is a situation in which a customer thinks more highly of a company after the company has corrected a problem with their service, compared to how he or she would regard the company if non-faulty service had been provided. The main reason behind this thinking is that successful recovery of a faulty service leads to increased assurance and confidence among customers.〔Krishna, A., Dangayach, G. and Sharma, S. (2014). Service Recovery Paradox: The Success Parameters. ''Global Business Review'', 15(2), pp.263-277.〕 Understanding SRP has been an important goal for both researchers and managers, as service failure is one of the main determinants of customer switching behavior and successful recovery from these failures is critical for customer retention.〔McCollough, M., Berry, L. and Yadav, M. (2000). An Empirical Investigation of Customer Satisfaction after Service Failure and Recovery. ''Journal of Service Research'', 3(2), pp.121-137.〕 Recovery is especially important for service providers for whom ensuring an error-free service is impossible.〔Fisk, Raymond P., Stephen W. Brown, and Mary Jo Bitner (1993), Tracking the Evolution of the Services Marketing Literature, ''Journal of Retailing'', 69 (Spring), 61-103.〕 However, this view of service recovery is not shared by all. SRP contradicts the view that quality service is required to survive and succeed in the competitive environment.〔Sandhu, H. and Bala, N. (1990). Customers’ Perception towards Service Quality of Life Insurance Corporation of India: A Factor Analytic Approach. International Journal of Business and Social Science, 2(18), pp.219-231.〕
For example, a customer is travelling with Airline A. His/her flight gets cancelled, and when the customer calls Airline A, they place him on another available flight of his choice on the same day. However, if the customer had chosen Airline B, he/she would have travelled on his original planned flight without any cancellations or delays. According to the Service Recovery Paradox, the service recovery by Airline A would lead the customer to think highly of the company and be more loyal to Airline A, compared to his/her thoughts if he/she used Airline B which operated without any service failure.
==History==
A 1981 paper〔Etzel, M. and Silverman, B. (1981). A Managerial Perspective on Directions for Retail Customer Dissatisfaction Research. Journal of Retailing, 57(3), pp.124-136.〕 described possible ways of dealing with customer dissatisfaction. One such method was making a total adjustments for every case, even when customer complaints were unreasonable. The advantage of this method was described as a possible increase in confidence of the customer towards the firm, resulting in the customer making more purchases. This theory described similar effects with SRP. Before the term Service Recovery Paradox was first used, the concept was described by these quotes in the theoretical paper by Hart, Hessket and Sasser:〔Hart, C., Heskett, J. and Sasser Jr., W. (1990). The Profitable Art of Service Recovery. Harvard Business Review, 68(4), pp.148-156.〕 "A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, create more goodwill than if things had gone smoothly in the first place”. It was also theorized that this concept could be used strategically to increase customer retention.The term Service Recovery Paradox was coined in 1992 by Michael McCollough and Sundar Bharadwaj,〔McCollough, Michael A., and Sundar G. Bharadwaj. "The Recovery Paradox: An Examination of Customer Satisfaction in Relation to Disconfirmation, Service Quality, and Attribution Based Theories." In Marketing Theory and Applications, edited by Chris T. Allen, 119. Chicago: American Marketing Association, 1992.〕 who defined service recovery as "a situation in which a consumer has experienced a problem which has been satisfactory resolved, and where the consumer subsequently rates their satisfaction to be equal to or greater than that in which no problem had occurred". After its initial use, the concept has been a topic of research and the results on its existence have been inconclusive.
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