L9.
Complaint handling and service recovery

Two main types of service failure

Customer response options to serve failure

Service recovery

Principles of effective service recovery

Outcome failure - What customers actually receive from the service

  • The organization does not fulfil the basic service need or perform the core service

Service Failure

  • Marketing/Sales making a promise to customers
  • Service Delivery delivers the promise to customers
  • Service delivery is often very complicated as the one making the promise is not the one delivering it

Process Failure - How they receive the service

  • The delivery of the core service is fulfilled but flawed or deficient in some way
  • Systematic efforts by a firm to correct a problem following a service failure and to retain customers' goodwill
  • Complaints should be seen as a "profit center" rather than a "cost center" as it helps firm to improve

Service recovery paradox

  • Describes the phenomenon where customer who experience a service failure that is satisfactorily resolved may be more likely to make future purchases than customers without problems
  • if second failure occurs and service paradox disappear, customer would be disappointed as expectation has been raised
  • Standard expected to deal with service failure increases
  • Severity and recoverability of failure will ability ability to delight customer with recovery efforts ie. wedding photos, ruined holiday

Do the job right the first time

  • 1.Effective complaint handling
    • = Increase satisfaction and loyalty
  • 2.Identify service complaint
    • Conduct research, monitor complaints, develop a "complaint as opportunity" culture
  • 3.Resolve complaint effectively
    • Develop effective system and training in complaints handling
  • 4.Learn from the recovery experience
    • Conduct a Root-Caused analysis
  • Take public action
    • Complain to service firm
    • Complain to third party
    • Take legal action to seek redress
  • Take private action
    • Switch provider
    • Negative word of mouth
  • Take no action

Effective service recovery

  • Be proactive (do not wait until customer make complaints)
  • Employee empowerment
  • Plan recovery procedures
  • Teach recovery skills to relevant personnel