BUSI 4004 Week 10 Service Recovery Plan Example

When a Garment Is Lost or Ruined: A Standing Service Recovery Plan for a Neighborhood Dry Cleaner Setting Out Who Responds, What Counter Staff May Offer on the Spot, How the Customer Hears Back and How Fairness Is Judged

Student Name

Walden University

BUSI 4004: Customer Relationship Management for Small Business

Instructor Name

Month Day, Year

When a Garment Is Lost or Ruined: A Standing Service Recovery Plan for a Neighborhood Dry Cleaner Setting Out Who Responds, What Counter Staff May Offer on the Spot, How the Customer Hears Back and How Fairness Is Judged

Why Decide in Advance

Sooner or later, the course's composite Lansing cleaner will lose a customer's garment or ruin one. Last year it happened four times: a wool coat shrank, a leather trim bled onto a jacket, a silk blouse was scorched and a pair of trousers disappeared on the conveyor. Each was handled differently, depending on who was at the counter and how upset the customer was. This plan decides now what happens next time, so the response is fast, consistent and fair.

Tax et al. (1998) found that customers judge a complaint experience on three kinds of fairness: the outcome they receive, the process used to reach it and the way they are treated. The plan addresses all three.

Who Responds

The counter clerk who hears about the problem owns it until the customer leaves the counter or ends the call. The clerk records the problem in the customer's record, photographs the garment if it is present and tells the customer what will happen next and when. The owner takes over any case the clerk cannot settle on the spot and must contact the customer personally within one business day.

What Counter Staff May Offer Without Approval

Table 1

What Each Role May Offer

Grand River Cleaners and its limits are composite. The $75 limit covers about 80 percent of claims in the shop's records.

How the Customer Hears Back

For any case the clerk cannot settle, the customer receives three contacts. The first is at the counter or on the call: an apology, what will happen and when they will hear from the owner. The second is the owner's call or email within one business day, stating the facts and the options. The third is a written confirmation of whatever was agreed, so there is no dispute later. If a search or restoration takes longer, the owner sends an update every three business days until the case is closed, even if there is nothing new to report.

What Compensation Looks Like

For damaged or lost garments, the shop pays the cost of a comparable replacement. For garments under two years old, it pays the full replacement cost; for older garments, it pays at least 70 percent and the owner may pay more for long-standing customers. The customer keeps a damaged garment unless they would rather the shop dispose of it. In the restaurant and hotel settings studied by Smith et al. (1999), customers judged a recovery fairer when what they received was proportionate to what went wrong, which is why the plan scales the response rather than offering the same credit for a lost coat and a missing button.

How Fairness Is Judged

Each case is reviewed once a month by the owner, using three questions drawn from the fairness dimensions above. Was the outcome comparable to what other customers received for similar failures? Did the customer hear back on time at each step? Was the customer treated with respect, as shown in their own words in follow-up? The owner calls each customer two weeks after the case closes and asks one question: "Would you bring us your clothes again?" The answers are recorded.

Preventing Repeats

Every case is also logged by cause: pressing, chemical, labeling, conveyor or other. A second failure, even after a well-handled first one, sharply lowered satisfaction in the study by Maxham and Netemeyer (2002), so the monthly review must look for causes that repeat. The scorched silk blouse led to the rule that only the lead presser handles silk; the next pattern should lead to a rule of its own.

Limits

The plan cannot prevent every failure, and some customers will leave whatever the shop offers. It also costs money: four serious failures a year at an average of $150 is about $600, plus small credits. Bitner (1990) found that how employees respond to a failure shapes customers' judgment of the whole encounter, which means the plan's real value lies less in the payouts than in the clerks knowing exactly what they may do.

References

Bitner, M. J. (1990). Evaluating service encounters: The effects of physical surroundings and employee responses. Journal of Marketing, 54(2), 69-82. https://doi.org/10.1177/002224299005400206

Maxham, J. G., III, & Netemeyer, R. G. (2002). A longitudinal study of complaining customers' evaluations of multiple service failures and recovery efforts. Journal of Marketing, 66(4), 57-71. https://doi.org/10.1509/jmkg.66.4.57.18512

Smith, A. K., Bolton, R. N., & Wagner, J. (1999). A model of customer satisfaction with service encounters involving failure and recovery. Journal of Marketing Research, 36(3), 356-372. https://doi.org/10.1177/002224379903600305

Tax, S. S., Brown, S. W., & Chandrashekaran, M. (1998). Customer evaluations of service complaint experiences: Implications for relationship marketing. Journal of Marketing, 62(2), 60-76. https://doi.org/10.1177/002224299806200205