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Service Recovery - 1

Service recovery plays a crucial role in achieving customer satisfaction. Customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases. If second service failure occurs, customers are less likely to be satisfied.

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Ruban Jebadurai
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126 views18 pages

Service Recovery - 1

Service recovery plays a crucial role in achieving customer satisfaction. Customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases. If second service failure occurs, customers are less likely to be satisfied.

Uploaded by

Ruban Jebadurai
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Chapter 13:

Achieving Service Recovery and Obtaining Customer Feedback

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 1

Overview of Chapter 13
Customer Complaining Behavior

Customer Responses to Effective Service Recovery


Principles of Effective Service Recovery Systems

Service Guarantees

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 2

Customer Complaining Behavior

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 3

Customer Response Categories to Service Failures (Fig 13.1)


Complain to the service firm Take some form of Public Action Complain to a third party Take legal action to seek redress Defect (switch provider) Negative word-ofmouth

Service Encounter is Dissatisfactory

Take some form of Private Action


Take No Action

Any one or a combination of these responses is possible


Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 - 4

Understanding Customer Responses to Service Failure


Why do customers complain? What proportion of unhappy customers complain? Why dont unhappy customers complain? Who is most likely to complain? Where do customers complain? What do customers expect once they have made a complaint? procedural justice interactional justice outcome justice
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 - 5

Customers Often View Complaining as Difficult and Unpleasant (Fig 13.2)

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 6

Customer Responses to Effective Service Recovery

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 7

Importance of Service Recovery


Plays a crucial role in achieving customer satisfaction Tests a firms commitment to satisfaction and service quality
Employee training and motivation is highly important

Impacts customer loyalty and future profitability


Complaint handling should be seen as a profit center, not a cost center

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 8

The Service Recovery Paradox


Customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases than customers without problems (Note: not all research supports this paradox) If second service failure occurs, the paradox disappears customers expectations have been raised and they become disillusioned Severity and recoverability of failure (e.g., spoiled wedding photos) may limit firms ability to delight customer with recovery efforts Best strategy: Do it right the first time
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 - 9

Principles of Effective Service Recovery Systems

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 10

Components of an Effective Service Recovery System (Fig 13.4)


Do the job right the first time Effective Complaint Handling Increased Satisfaction and Loyalty

Conduct research
Identify Service Complaints Monitor complaints Develop Complaints as opportunity culture Develop effective system and training in complaints handling Conduct root cause analysis

Resolve Complaints Effectively

Learn from the Recovery Experience

Close the loop via feedback


Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 - 11

Strategies to Reduce Customer Complaint Barriers (Table 13.1)


Complaint Barriers for Dissatisfied Customers
Inconvenience Hard to find right complaint procedure Effort involved in complaining Doubtful Pay Off Uncertain if action will be taken by firm to address problem Unpleasantness Fear of being treated rudely

Strategies to Reduce These Barriers


Put customer service hotline numbers, e-mail and postal addresses on all customer communications materials Have service recovery procedures in place, communicate this to customers Feature service improvements that resulted from customer feedback Thank customers for their feedback Train frontline employees

Hassle, embarrassment
Slide 2007 by Christopher Lovelock and Jochen Wirtz

Allow for anonymous feedback


Services Marketing 6/E Chapter 13 - 12

How to Enable Effective Service Recovery


Be proactiveon the spot, before customers complain

Plan recovery procedures


Teach recovery skills to relevant personnel

Empower personnel to use judgment and skills to develop recovery solutions

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 13

Service Guarantees

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 14

Service Guarantees Help Promote and Achieve Service Loyalty


Force firms to focus on what customers want Set clear standards Highlight cost of service failures Require systems to get and act on customer feedback Reduce risks of purchase and build loyalty
Slide 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 - 15

How to Design Service Guarantees


Unconditional Easy to understand and communicate Meaningful to the customer Easy to invoke Easy to collect

Credible

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 16

Types of Service Guarantees


Table 13.2

Single attribute-specific guarantee


One key service attribute is covered

Multiattribute-specific guarantee
A few important service attributes are covered

Full-satisfaction guarantee
All service aspects covered with no exceptions

Combined guarantee
All service aspects are covered Explicit minimum performance standards on important attributes
Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 17

The Hampton Inn 100% Satisfaction Guarantee

(Fig 13.5)

Slide 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 18

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