Confronting the Myth of Service Recovery | An Ounce of Prevention is Worth a Pound of Cure | by Rick Garlick
For the past several years, many hotel executives have ascribed to the widely circulated notion that a strong problem-recovery process is the key to enhancing customer loyalty. Some claim to possess statistics that show a higher intent to return among guests who experienced a problem followed by excellent resolution, compared to guests who had a problem-free stay.
The dangerous conclusion drawn from this belief is that guests don't expect perfection as long as problems are professionally addressed and resolved to the guests' satisfaction. As a result, hotel managers might relax their concerns regarding problem incidence, believing that an effective resolution system will redeem guest loyalty.
Maritz has studied literally thousands of hotel satisfaction surveys, both on the guest and meeting planner side of the business. The result of this extensive research: Maritz has found only one circumstance – discussed at a later point in this article – in which guests who experienced a problem showed greater affinity for the hotel than if no problem had occurred in the first place.
In all but a few cases, guests who experience a problem are significantly less satisfied with their experience, less likely to return, and less likely to recommend the property … even when service recovery exceeds their expectations, which it rarely does.
The Wrong Read
How did this belief become widespread in the hotel industry? There is some evidence in the business literature that effective service recovery in some industries can produce greater customer loyalty. Initial customer expectations relative to the problems they expect vary across industries and business sectors. For example, customers do not usually expect outstanding service from their insurance agents, cable companies, or government agencies. In such industries, a customer service representative who truly cares about a problem provides a noteworthy positive counter to a negative expectancy. However, when guests check into a hotel, especially an upscale hotel, they expect to experience a hassle-free stay. Anything else represents a negative violation of a positive expectancy.
Despite this no hassle expectancy, the data show that one-in-five guests experience some type of problem during their stay, even in more upscale hotels. This percentage is usually significantly higher in large city-center hotels and convention properties. On the meeting-planner side, one-in-three planners generally experience some type of a problem during the planning and execution of their event.
Since problems occur at a greater incidence than hotel managers would prefer, it is not surprising that they would adopt a focus on fixing problems effectively. Unfortunately, the data show that service recovery exceeds guest expectations in only one of 10 cases. In the remaining problem situations, service recovery efforts are likely to fall short of expectations.
In cases in which problem-resolution efforts meet, but do not exceed expectations, the data show that guests are still likely to hold the initial problem against the hotel. Satisfaction scores are significantly lower, as are scores for stated intent to return and recommend the property to others. Overall, hotels are four times more likely to fail to meet expectations than they are to exceed expectations.
As mentioned above, some hotel executives who study customer satisfaction data report that they see higher scores among guests who experienced excellent problem resolution compared to guests who had a problem-free stay. A more typical result is that guests who experience excellent problem resolution provide similar scores to guests who had a hassle-free stay. In either case, the difficulty and cost in providing the type of resolution that produces this result should be enough to convince a hotel executive that a focus on problem resolution isn't the most effective strategy for driving guest loyalty.
Even with all of these issues aside, drawing this type of conclusion from the data presents another problem: often, service recovery efforts are not examined in the context of the larger service experience.
A Balanced Approach
Maritz frequently studied items that gauge proactive elements of service. Such studies represent areas that assess the degree to which the staff has made a positive connection with guests – regardless of whether a problem has occurred. Such items include:
- The front desk staff really cared about the quality of my stay.
- The staff treated me as a valued customer throughout my stay.
- The staff anticipated my needs.
Maritz has examined the various combinations of strong/weak proactive service along with strong/weak service-recovery efforts. Guest satisfaction and loyalty is strongest when there is both strong proactive service and strong service recovery following a problem. As referenced previously, this is the one instance in which guests who experienced a problem gave higher ratings of the hotels than guests who had a problem-free stay.
However, a combination of strong service on the front end and strong recovery efforts on the back end rarely occurs. Approximately one of 20 guests who experience a problem reports this type of service experience. (In the majority of problem situations, there is neither good front end service nor strong recovery efforts.)
Meeting Planner Findings
Maritz has found the same principles to be true on the meeting-planner side of the business. The following data was collected from a nationally syndicated survey of meeting planners.
The first line of data shows the satisfaction scores and intent to return of meeting planners who experienced no problem during their events.
The second line of data shows those who rated service they received during the pre-event aspect of the meeting as excellent. Those individuals later experienced a problem, and had a resolution to their problem that exceeded their expectations.
The third line shows those who rated the pre-event service as excellent, but had problem resolution that either only met or failed to meet their expectations.
The fourth line reflects the opposite scenario; these individuals rated the pre-event service as less than excellent, but had problem resolution that exceeded expectations.
The final line shows planners who experienced neither excellent pre-event service nor excellent service recovery.
The data clearly show that the service a planner receives before the event takes place is far more important than service recovery following a problem. While having an excellent problem-resolution process is beneficial, the table above demonstrates that an ounce of prevention is worth a pound of cure.
The extremely low incidence of situations in which expectations are exceeded in problem resolution does not warrant as strong a focus on service recovery as it does on the front end to create positive impressions with customers before problems occur.
Of course, the data also show that some effort at problem resolution is highly preferable to little or no effort at all. However, strong problem resolution alone does not buy back much loyalty. Furthermore, the means required to exceed expectations in recovery generally represent a real cost to the hotel, in terms of both time and money. Building goodwill before a problem occurs is much less expensive than trying to rectify a problem after the fact.
The Final Word
In summary, several key points should be noted:
- It is very difficult to exceed guest expectations in service recovery. Hotels typically exceed guest expectations in problem situations in only one of 10 problem occurrences. Hotels are at least four times more likely to fail to satisfy a guest in recovery efforts than they are to exceed expectations.
- When hotels resolve problems in a manner that meets, but does not exceed expectations, satisfaction scores are significantly lower than when an experience is problem-free.
- The only time satisfaction and loyalty are improved after a problem is when service has been outstanding throughout the entire experience. Outstanding problem resolution is seen as a part of a larger service culture within the hotel, not as a stand-alone reaction.
- Recovery efforts arguably represent a much greater cost compared to the type of service that initially bonds a guest or meeting planner to a property.
The purpose of this article is to debunk the conventional wisdom that hotel customers don't really care about problems as long as they are effectively resolved. Other than rare cases in which a problem occurs in the context of an existing stellar service experience, problem incidence holds no arguable upside. There are far more effective ways to generate loyalty than after-the-fact heroics in response to a problem occurrence.
Wise hoteliers will focus on proactive, rather than reactive service strategies as a means to drive guest and meeting planner loyalty to their properties.
Date: Volume 18 - October 2005
About Maritz Research
As one of the world's largest marketing research firms, Maritz Research, a unit of Maritz, helps many of today's most successful companies improve performance through an actionable understanding of their customers, employees, and channel partners. Founded in 1973, Maritz Research offers a range of strategic and tactical solutions concentrating primarily in the automotive, financial services, hospitality, telecommunications and technology and retail industries. The company has achieved ISO:2 0252 registration, the international symbol of quality. Maritz Research is a member of CASRO and official sponsor of the American Marketing Association.
