Final answer:
The statement that service recovery is vital when customer expectations are not met is true. Service recovery helps maintain customer relationships and loyalty, and it's essential across various scenarios, including technology failures and product design flaws.
Step-by-step explanation:
When something does not go as the customer needs or expects, service recovery becomes a vital step in maintaining the relationship. The correct answer to this question is A) True. Service recovery is essential for preserving customer loyalty, especially after a service failure or when the product does not meet expectations. For instance, if we consider a situation where a manager is viewed as the most important internal customer, offering exceptional customer service can result in positive feedback and potential career opportunities.
Furthermore, businesses heavily rely on technology for operations, and a failing phone or computer, as indicated in FIGURE 8.7 from the question, could lead to detrimental impacts on customer satisfaction and revenue. Therefore, prompt and effective service recovery strategies are crucial when tech issues arise. Additionally, addressing issues originating from poor design decisions early in the development process demonstrates a proactive approach to service recovery and ensures future offerings better meet customer needs.