BACKGROUND: Patient satisfaction and retention can be influenced by the development of an effective service recovery program that can identify complaints and remedy failure points in the service system. Patient complaints provide organizations with an opportunity to resolve unsatisfactory situations and to track complaint data for quality improvement purposes. SERVICE RECOVERY: Service recovery is an important and effective customer retention tool. One way an organization can ensure repeat business is by developing a strong customer service program that includes service recovery as an essential component. The concept of service recovery involves the service provider taking responsive action to "recover" lost or dissatisfied customers and convert them into satisfied customers. Service recovery has proven to be cost-effective in other service industries. THE COMPLAINT MANAGEMENT PROCESS: The complaint management process involves six steps that organizations can use to influence effective service recovery: (1) encourage complaints as a quality improvement tool; (2) establish a team of representatives to handle complaints; (3) resolve customer problems quickly and effectively; (4) develop a complaint database; (5) commit to identifying failure points in the service system; and (6) track trends and use information to improve service processes. SUMMARY AND CONCLUSIONS: Customer retention is enhanced when an organization can reclaim disgruntled patients through the development of effective service recovery programs. Health care organizations can become more customer oriented by taking advantage of the information provided by patient complaints, increasing patient satisfaction and retention in the process.