Three outcomes of service recovery : Customer recovery, process recovery and employee recovery

Purpose – Based on a review of the literature, this paper sets out to suggest that an organisation's service recovery procedures lead to three distinct outcomes; customer, process, and employee recoveries. The objective of the paper is to investigate the impact of service recovery procedures (i.e. the way service recovery is managed and executed) on these three outcomes and their relative impact on an organisation's financial performance. Design/methodology/approach – A model, linking recovery procedures to the outcomes of recovery and financial performance, is tested using empirical data from a detailed survey of 60 organisations in the UK. Findings – It would appear that many organisations and academic researchers have focused their efforts on customer recovery and have, to some extent, ignored the potentially higher impact outcomes of process and employee recovery. The main finding was that service recovery procedures have a greater impact on employees and process improvement than on customers. Furthermore, while many organisations appear to be concerned with service recovery few seem to be good at it or gaining the benefits of recovered customers, improved processes or recovered employees. Research limitations/implications – This paper tries to encourage wider research into the impact of service recovery. The main limitations were sample size and selection. Practical implications – It challenges the way some organisations have focused their recovery procedures on satisfying or delighting customers and suggests that by doing so they are missing out on substantial benefits. It also suggests that many organisations have a long way to go to develop their recovery procedures. Originality/value – This work proposes three outcomes of service recovery and finds that the impact of process and employee recoveries may be more significant than customer recovery.