Business correspondence and literature summary

Business Letter and Literature Summary

Letter:

Bill Bryce

Tea Tree Lane

Salisbury

Wiltshire, United Kingdom

SP2 8JN

Service recovery, to be an effective marketing strategy, needs to mitigate internal costs yet far surpass the expectations of the customer for recovery. Depending on the severity of the lack of actual or perceived service or product quality, customers often internalize the service failure instead of seeing it as symptomatic of broken processes or systems (del Rio-Lanza, Vazquez-Casielles, Diaz-Martin, 2009). As a result of this perception, it is imperative for a services recovery strategy to meet or exceed the expectations of customers on a consistently high basis to be effective. Putting service recovery strategies purely into an economically-based approach that seeks monetize the lack of service and pay only what can be quantified often fail (Michel, Coughlan, 2009). Customers seek compensation for the anxiety, stress and perceived loss of choice when services do not meet their expectations. Merely monetizing their trouble by external events will not lead to service becoming an exceptional company differentiator and part of a company's unique value position over time. In conjunction with these factors there also must be a speed of response that matches the customers" perception of time as well (Wirtz, Mattila, 2004). As the basis of service problems often is based on a major variation in how customer perceived time, this also needs to be considered in any service recovery strategy. In fact this variation in time is responsible for the majority of the complaints about services (McCole, 2004).

For service recovery strategies to be effective there must be an empathy and monetization together, both aimed at surpassing customers' expectations. Customers must be moved beyond satisfied with service recovery, they must be delighted (del Rio-Lanza, Vazquez-Casielles, Diaz-Martin, 2009). This is achieved through combing the empathetic and monetization aspects of any service recovery act or strategy. The perceived severity of service loss or lack of service quality is proportional to the expectations that customers have of their extend of their service recovery treatment (Craighead, Karwan, Miller, 2004). This is where the judgment of organizations comes into play. In the case of the airline passenger on the Virgin Atlantic flight, the company had every right to dismiss Mr. Bryce's claims and say that the food served is indigenous to the Indian customers who are the majority of the passengers on the route. Instead, the better service recovery strategy was to focus on what empirical research suggest is most critical to British airline passengers, and that is the managing of customer request/fault scenarios (Lorenzoni, Lewis, 2004). Providing 15.000 credited miles on the Virgin Atlantic Flying Club is three times the amount of miles flown on the leg of the flight being complained about. This is payment for not only the flight but the stress of not having food for nearly eight hours that was palatable to the passenger. Again reverting to the perceived severity of the issue, opting to provide the 15,000 air lines is very low cost but very high perceived value, an excellent strategy for overcoming sever service recovery issues (Craighead, Karwan, Miller, 2004). Second, mailing the £100 American Express Gift Certificate in the letter written says that Virgin Atlantic is very sincere in its apology. In effect the Gift Certificate says that the discomfort of the passenger is so empathetically felt that now the customer can have an excellent meal anywhere in London they wish on the airline. Third, the call from Richard Branson seals the service strategy with accountability and transparency, two critical elements in any service recovery initiative (del Rio-Lanza, Vazquez-Casielles, Diaz-Martin, 2009). All of these factors must contribute to an over-balancing of the scales in the customers' perception if service recovery is to be complete (White, Yanamandram, 2007).