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L9. Complaint handling and service recovery (Service recovery (Service…
L9.
Complaint handling and service recovery
Two main types of service failure
Outcome failure
- What customers actually receive from the service
The organization does not fulfil the basic service need or perform the core service
Process Failure
- How they receive the service
The delivery of the core service is fulfilled but flawed or deficient in some way
Customer response options to serve failure
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
Service recovery
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
Effective service recovery
Be proactive (do not wait until customer make complaints)
Employee empowerment
Plan recovery procedures
Teach recovery skills to relevant personnel
Principles of effective service recovery
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
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