Doctoral Candidate Steve Samaha presented a lecture about Service Failure and Service Recovery. Within days, my son and I personally identified with these concepts.
Service failure can occur on multiple dimensions. A core service failure occurs when a customer is not able to use the product or service they have purchased. A service encounter failure occurs when customer interaction with employees of a firm leave the customer feeling negative about the firm. Inadequate responses to other types of service failures entail their own category of service failure.
My son experienced the first type of service failure. On Saturday morning, he discovered that his World of Warcraft Account had been hijacked. The hijacker put an authenticator on his account, so he could not log in. (An authenticator is a second level of password protection which requires hardware that gets plugged into a USB drive. A random number generator generates a second password, which must be entered after the first password.)
My son's father is the accountholder, so efforts to contact Blizzard went through him. Telephone support was impossible, so my ex contacted Blizzard via e-mail and got an automated response that they would get back to him. In the mean time, my son contacted one of his guild members (If you play WoW, you know what that means, if you don't, it doesn't matter for this marketing example.) via chat, and let her know that his account had been hacked. She let him know when the hacker had been online, and later when he logged in. My poor son could do nothing. He knew his character was online, probably selling all of his good stuff, and he was powerless to do anything.
On the five dimensions of service quality, Blizzard ranked high on 'assurance' and 'empathy,' however, they failed to deliver 'reliability' and 'responsiveness,' which resulted in the service failure. (I am ignoring 'tangibles,' as I cannot find a way that it would apply.)
When Blizzard responded, they took immediate steps to restore my son's account to him. My son had to make a second request to get the authenticator removed. His account was restored to him Sunday evening. Overall, Blizzard did a great job, albeit not as quickly as we would have liked. (We later learned that a different support channel would have served him quicker.) They assured my son that all of his items would be returned to his characters within 36 hours. The items were returned within 4 hours. The hacker had looted the Guild Bank; my son expected he would have to go through the logs and return all of those items manually. Blizzard actually returned all of those items directly to the Guild Bank. In addition, Blizzard let my son keep the gold that the hacker had acquired but not yet sold.
Blizzard also took the time to educate my son about how to contact them in the future. They actually have a dedicated support channel for when a person's account is hacked.
Overall, this was a successful service recovery, and my son will probably be more loyal to Blizzard, as the service failure was modest and the recovery exceeded his expectations. He now will be an easier customer to service, as he knows that there are multiple support channels, and he will use the appropriate one in the future.