Service Failures – Reasons, Types, Impact

    Those occasions under which a service is either performed badly or is not performed at all are known as service failures.

    When taking satisfaction into consideration, service failures can be understood as situations when clients feel frustrated by a service or lack of it or are not interested in using a service as they are dissatisfied.

    Service failure usually occurs when service performance is lower than the satisfactory expectation level of clients. Customers usually do not avail of services from a particular firm if they are dissatisfied.

    Further, they share their bad experience with their friends and relatives. This creates an undesirable impact on the growth of the service firm.

    Thus, it can be said that dissatisfaction creates a quite shocking impact on the firm. Negative word-of-mouth communications and firm-switching behaviours of customers are not the evident outcomes of service failures.

    There are ways in which customers can be retained and recovered. The future purchase behaviour of clients depends significantly upon the way in which the company handles post-service failures rather than the extent of dissatisfaction from the experience of the original service.

    Reasons for Service Failure

    The key reasons for service failure are explained below:

    1. Inexperienced Staff

    A significant factor responsible for service failure is the reluctance or unwillingness of the staff members to be accountable and take responsibility for important aspects of service delivery.

    This unwillingness is mainly because of a lack of adequate experience. In order to avoid this, the employees must be provided with the right training.

    They should be authorized to take necessary decisions independently regarding customer complaints. Also, appropriate training should be provided in terms of how to address and respond to the needs of customers.

    2. Employee Attitude

    When customers are mistreated by the employees’ misbehaviour or bad attitude, service failure occurs. Many times employees do not treat customers in a pleasant manner and behave rudely.

    3. Lack of Communication

    Lack of communication or poor communication among employees and between employees and customers also results in service failure.

    In order to avoid this, there should be proper training provided to the employees regarding how to properly communicate with customers and among themselves.

    Also, proper communication channels should be developed between the management and personnel.

    4. Multifaceted Activities

    When there are complex or multi-dimensional processes involved in service delivery tasks, the chances of service failure increase.

    Such processes should be divided into more controllable processes and analyzed thoroughly.

    5. Delay in Service Delivery

    Service failure often occurs due to the issues in the service system like long queues, delayed check-in, busy tables, etc.

    Such issues cause delays in service delivery, which ultimately results in service failure. These issues often result due to a wrong or poorly designed service system.

    6. Mechanical Breakdown

    Mechanical breakdowns and failures also result in service failure. They may include malfunctioning mechanical designs or breakage of equipment like water heaters, computers, cars, etc.

    Mechanical breakdown often results in customer disappointment or dissatisfaction as it acts as a hurdle to on-time service delivery.

    7. Unusual Reasons

    These reasons for service failure include various societal or natural factors that are uncontrollable or unmanageable for the service firm.

    These factors may include undesirable climatic conditions, natural disasters, traffic congestion, etc. Apart from taking necessary precautions, there is nothing much a service firm can do to tackle these factors.

    Types of Service Failure

    The various types of service failure are explained below:

    System Failures

    These failures denote the type of occurrence in situations when the service companies make blunders in providing the core service.

    There is a basic commitment that lies at the centre of any product or service that a customer expects.

    For example, a person who booked a hotel room will at least expect a clean room, comfortable bed, proper ventilation, hygienic toilet, luggage safety, etc.

    The expectations of a core customer are improbable to be similar to every client or service as they are defined by the conditions of the market.

    The service delivery system failures include employee responses to the following three different kinds of system failures:

    Response to Unavailable Service

    For example, the loss of customers’ personal items from the hotel room or the presence of insects in the food served at the restaurant.

    Under such conditions, the response of the frontline staff has a great potential to determine the extent of customer satisfaction/dissatisfaction, i.e., the staff can quickly admit the mistake and take immediate action or can do nothing to argue.

    Response to Unreasonably Slow Service

    For example, a customer has to wait a long time to receive his food order due to slow service delivery.

    In such cases, the response of the delivery boy can make the customer satisfied (i.e., by apologizing or offering discounts) or disappointed (i.e., giving no explanation or rude behaviour).

    Response to Other Core-Service Failure

    It includes everything that belongs under the category of core-service failures.

    Customer Needs and Requests

    Often, customers have special needs or customized needs. For example, in a restaurant, a person may demand specific food items cooked in low-fat oil if he is on a strict diet.

    Similarly, a senior citizen may require extra attention during air travel. In order to deal with such situations, the frontline employees change or adapt the service delivery system so as to meet the special needs of clients.

    Since the response of frontline staff determines the extent of customer satisfaction/dissatisfaction, there are the following kinds of needs that the frontline staff may have to give a response to or quick attention to:

    Special Needs

    Depending on numerous factors like diet, age, medical aspects, sociological issues, etc., customers often have special kinds of needs. Service failure can occur if the frontline staff does not respond in a desirable manner.

    For example, if a senior citizen is being provided special care with medical facilities in airlines (satisfied response) or is left unattended (dissatisfied response).

    Customer Preferences

    It includes the ‘special requests’ or the personal preferences of customers. They are not usually related to the demographic, cultural, or physical attributes of the customers.

    For example, a person demanding a window seat or aisle seat in an aircraft.

    Admitted Error

    Very often, the activities of customers like loss of travel ticket or wrong address for delivery cause service failure.

    The response of employees under such circumstances can satisfy or dissatisfy customers. Customer satisfaction results when the frontline staff properly addresses customers’ issues and takes responsibility for resolving them.

    On the other hand, if the frontline staffs blame, laughs, or ignores customers’ issues, it can severely disappoint the customers.

    Disruptive Others

    Sometimes, the behaviour of other customers affects some customers.

    For example, talkative customers like to chat with their fellow customers during travel; some customers might not like talking to strangers.

    Under such conditions, the frontline staff can intervene and set the sitting pattern accordingly. On the other hand, if the employees do not take charge, it can disappoint the customers.

    Unprompted and Unsolicited Employee Actions

    Unprompted and unsolicited employee actions involve those employees’ actions and events that are unexpected or unanticipated by the customers.

    These actions are not part of core service procedures and are also not requested by the clients. These actions consist of a surprise element and thus, can be both satisfying and non-sati&tying.

    For example, a stressful and rude staff member is non-satisfying, while polite behaviour or intimate service is satisfying.

    The kinds of unprompted and unsolicited employee actions may include cultural norms like being punctual or honest, unusual efforts that touch the sentiments of customers, attention level, etc.

    Service Failures Versus Product Failures

    Basis of Difference Service Failure Product Failure
    1. Market estimation Unsuitable product visualization from the customers’ viewpoint. Profit margins are reduced due to over-estimation of market size.
    2. Market Research  Insufficient creative research for identifying the unsatisfied needs of different market segments. Marketers often make the wrong predictions regarding the needs of the customers due to improper research. As a result, the product does not satisfy the needs of the customers.
    3. Satisfaction Customers can become disappointed due to the incapability of minimizing the psychological discomfort related to the service. Customer dissatisfaction can result from the poor quality of the product.
    4. Availability Customers can deter from using the services due to the unavailability of proper service delivery. When a product fails to reach the targeted customers, it shows the inability of the supply chain management due to which customers switch to other market players.
    5. Design


    If the service system design is not correct, it may keep customers waiting, which is not good. The service system should be properly designed by blueprinting design. The product gets failed if it has a poor design and is not convenient to use.
    6. Image An unclear service image of the product is created due to the minimal reach of conventional mass media. The product cannot be sold through unessential claims of the marketers; the product image is already engraved in customers’ minds.

    Impact of Service Failures

    The impact of service failures is explained below:

    Voice Responses

    Items that are directly involved in disappointing customer experience and are external to the social circle of customers (retailers, distributors, etc.) are targeted under the voice of consumer complaint behaviour.

    This category also involves non-behavioural responses.

    For example, seeking compensation from the seller and getting nothing in return.

    Private Responses

    Items that are not directly involved in the disappointing customer experience and are internal to the social circle of customers (relatives, friends, family, etc.) are included under private consumer complaint behaviour.

    For example, word-of-mouth communication.

    Third-Party Responses

    Items that are not directly included in the disappointing customer experience (like legal agencies, newspapers, customer agencies, etc.) and are external to the social circle of customers are included under third-party consumer complaint behaviour.

    For example, taking legal action.

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