Addressing Service Failure and Recovery in Digital Service Systems: Opportunities and Challenges

Abstract

Digital service systems are changing the world as we know it, enabling companies to embrace new forms of relationship with their customers. The aim of this article is to propose a categorization of service failures in digital service systems and an illustration of recovery solutions based on life situations. Thus, this article used an exploratory case study research conducted in a Portuguese private bank. Data collection involved multiple sources, such as semistructured interviews, customer complaints from an online database, and direct observation. The case revealed that digital service systems are not failure proof and service failures are inevitable. As a result, companies are struggling to consistently maintain high service standards across all channels and, for that purpose, have essentially invested on automated interactions. On the other hand, humanized recovery solutions are expected to enable organizations to make significant progress, including prevention and corrective actions, that will mitigate the perception of poor service delivery. While current studies tend to focus on what is going wrong in digital engagement, researchers have hitherto not investigated sufficiently this digital breakdown and the subsequent recovery solutions.

The Influence of E-Customer Relationship Management on Customer Experience in E-Banking Service

“…On the other hand, the efforts of banks to employ technology in providing services contributed to the emergence of many cases the failure of adopted electronic systems (Mathew et al, 2020). Even though the electronic and digital communities have a high level of efficiency and accuracy in completing financial transactions, the possibility of an error occurring that could lead to service failure is not excluded, this error may occur as a result of the customer's limited knowledge in entering information for forms of E-service applications and software on his phone or personal computer, and in some cases, the error is related to the electronic system approved by the bank (Reis et al, 2018;Zhu et al, 2021). No matter what the reason behind the error, service failure has negative consequences on customer attitudes and satisfaction, and E-word of the mouth (E-WOM) towards the bank (Keramati et al, 2018), this requires the adoption of effective mechanisms for service failure recovery focused on addressing Possible errors through procedures that are far from complex and do not drain the customer's time (Mansori et al, 2014)…”