Service Recovery: Characteristics and Assessment in Outstanding Companies

Abstract

The extent of service is increasing in business and society in Iceland, as is the case in the rest of the world. Studies on service management in Iceland have been limited. This study explores the challenges and responses from companies when customers experience service failure. A successful service recovery is defined as a key component in retaining customers after a service failure. The research problem addressed is the limited knowledge of how companies facilitate an effective service recovery. This study examined in what ways companies with the most satisfied customers in Iceland support their service experience after a service failure and how service recovery has been effective. The study uses qualitative methodology, involving six interviews with representatives from as many companies that excelled in The Icelandic Satisfaction Scale in January 2024. The interview results suggest that these companies support customer satisfaction after a service failure by emphasizing service culture, employee empowerment, a human-centered approach, and improvements to service processes. When it comes to evaluating whether service recovery has been successful, the assessment is based on employees’ subjective evaluation or not evaluated at all. Systematic data collection on the outcomes seems to be not customary.