Chapter 13 Complaint Handling

8/19/2019 Chapter 13 Complaint Handling

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CHAPTER 13

Complaint Handling and S ervice Recovery


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Overview of Chapter 13

Customer Complaining Behavior

Customer Responses to Effective Service Recovery

Principles of Effective Service Recovery Systems

Service Guarantees

Jaycustomers


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Customer

Complaining Behavior


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Customer Response Categories toervice !ailures (Fig. 13.3)


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"nderstanding Customer Responses to ervice!ailure

Why do customers complain?

Otain compensation

Release their anger

!elp to improve the service

Because of concern for others

What proportion of unhappy customers complain?

Why don"t unhappy customers complain?

Who is most li#ely to complain?

Where do customers complain? What do customers e$pect once they have made a complaint?

Procedural% interactional and outcome &ustice



3 #imensions of Perceived !airness in erviceRecovery Process (Fig. 13.7)



#ealing with Complaining Customers andRecovering from ervice !ailure

'a#e complaints professionally and not personally

Be prepared to deal (ith angry customer (ho may ehave inan insulting (ay to service personnel (ho may not e atfault

'a#e the perspective that customer complaints allo( firm achance to

Correct prolems%

Restore relationships

)mprove future satisfaction for all

*evelop effective service recovery procedures



Customer Responses toEffective

Service Recovery



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Customer did notcomplain Complaint (asnot resolved Complaint(as resolved Complaint (asresolved 6uic#ly

Prolem cost 7 8/33 Prolem cost 8/ 9 2

, of :nhappyCustomers Retained

So+rce Claes -ornell, .irer Wernerfelt, / Model for C+sto1er Co1!laint Manae1ent, Marketin

Science, 3ol4 ), 5o4 % 6S+11er, "9**7, !!4 2*)#29*

$mpact of Effective ervice Recovery onCustomer %oyalty


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$mportance of ervice Recovery

Plays a crucial role in achieving customer satisfaction'ests a firm"s commitment to satisfaction and service

6uality

Employee training and motivation is highly important

)mpacts customer loyalty and future profitaility

Complaint handling should e seen as a profit center%not a cost center



The ervice Recovery Parado&

Customers (ho e$perience a service failure that issatisfactorily resolved may e more li#ely to ma#e futurepurchases than customers (ithout prolems ;

)f second service failure occurs% the parado$ disappears

customers" e$pectations have een raised and theyecome disillusioned

Severity and @recoverailityA of failure ;eg% spoiled(edding photos> may limit firm"s aility to delightcustomer (ith recovery efforts

Best strategy= *o it right the first time



Principles of EffectiveService

Recovery Systems

trategies to Reduce Customer


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trategies to Reduce CustomerComplaint 'arriers (Table 13.1)

How to Ena(le


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How to Ena(leEffective ervice Recovery

Be proactiveOn the spot% efore customers complain

Plan recovery procedures

)dentify most common service prolems and have prepared

scripts to guide employees in service recovery

'each recovery s#ills to relevant personnel

Empo(er personnel to use &udgment and s#ills todevelop recovery solutions

How )enerous


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How )eneroushould Compensation 'e*

Rules of thum for managers to consider=What is positioning of our firm?

!o( severe (as the service failure?

Who is the affected customer?


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Service Guarantees


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The Power of ervice )uarantees

orce firms to focus on(hat customers (ant

Set clear standards

Re6uire systems to get Dact on customer feedac#

orce organiations tounderstand (hy they failand to overcome potentialfail points

Reduce ris#s of purchaseand uild loyalty


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How to #esign ervice )uarantees

:nconditional

Easy to understand and communicate

Feaningful to the customer

Easy to invo#e

Easy to collect

Credile

Types of ervice )uarantees


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Types of ervice )uarantees(Table 13.2)

Single attriute9specific guarantee

One #ey service attriute is covered

Fultiattriute9specific guarantee

fe( important service attriutes are covered

ull9satisfaction guaranteell service aspects covered (ith no e$ceptions

Comined guarantee

ll service aspects are covered

E$plicit minimum performance standards

on important attriutes

i l i (l d


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$s it Always uita(le to $ntroduce a )uarantee*

)t is not appropriate to introduce guarantees (henCompanies have a strong reputation for service e$cellence

Company does not have good 6uality level

Huality cannot e controlled ecause of e$ternal forces

Consumers see little financial% personal or physiological ris#associated (ith the purchase


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Jaycustomers

Add i th Ch ll f + t


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Jaycustomer= customer (ho ehaves ina thoughtless or ausive fashion% causingprolems for the firm% its employees% andother customers

Fore potential for mischief in service

usinesses% especially (hen manycustomers are present


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yp y - .The Cheat and Thief

'he Cheat= thin#s of various (ay to cheat the firm

'he 'hief=


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yp y - .The Rule(rea0er

Fany services need to estalish rules to guide customers safelythrough the service encounter

Government agencies may impose rules for health and safetyreasons

Some rules protect other customers from dangerous ehavior

eg s#i patrollers issue (arnings to rec#less s#iers y attaching orangestic#ers on their lift tic#ets

Ensure company rules are necessary% not should not e too much orinfle$ile

even Types of +aycustomers, -3.


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Shouts loudly% maye mouthing insults% threats and curses

Service personnel are often aused even (hen they are not to e lamed

Confrontations et(een customers and service employees can easilyescalate

irms should ensure employees have s#ills to deal (ith difficult

situations

yp y - .The 'elligerent

Confrontations between Customers and Service Employees Can Easily Escalate

)n a pulic environment% priority isto remove person from othercustomers

Fay e etter to supportemployee"s actions and get securityor the police if necessary if anemployee has een physicallyattac#ed

even Types Of +aycustomers, -.


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amily euders= People (ho get into arguments (ith other customers often memers of their o(n family

'he Iandal=

Service vandalism includes pouring soft drin#s into an# cash machinesKslashing us seats% rea#ing hotel furniture

Bored and drun# young people are a common source of vandalism :nhappy customers (ho feel mistreated y service providers ta#e

revenge

Prevention is the est cure

yp y - .!amily !euders And 2andals

even Types Of +aycustomers, -.


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The #ead(eat

Customers (ho fail to pay ;as distinct from @thievesA (ho never

intended to pay in the first place> Preventive action is etter than cure99eg% insisting on prepaymentK

as#ing for credit card numer (hen order is ta#en

Customers may have good reasons for not paying

-)f the clientLs prolems are only temporary ones% consider long9term value of maintaining the relationship

#ealing with Customer !raud


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#ealing with Customer !raud

)f in dout% elieve the customer

Meep a dataase of ho( often customers invo#e service guarantees or ofpayments made for service failure

)nsights from research on guarantee cheating=

mount of a guarantee payout had no effect on customer cheating

Repeat9purchase intention reduced cheating intent Customers are reluctant to cheat if service 6uality is high ;rather than &ust

satisfactory>

Fanagerial implications=

irms can enefit from offering /33 percent money9ac# guarantees

Guarantees should e offered to regular customers as part of memershipprogram since regular customers are unli#ely to cheat

E$cellent service firms have less to (orry aout than average providers

ummary of Chapter 13 4ervice


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When customers are dissatisfied% they can

'a#e some form of pulic action

'a#e some form of private action

'a#e no action

'o understand customer responses to service failures% some 6uestions to as#are

Why do customers complain?

What proportion of unhappy customers complain?

Why don"t unhappy customer complain?

Who is most li#ely to complain?

Where do customers complain?

What do customers e$pect once they have made a complaint?

Recovery and Customer !eed(ac0 -1.

ummary of Chapter 13 4ervice


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Effective service recovery can lead to customer loyalty

'he service recovery parado$ does not al(ays hold trueetter to get itright the first time

Guiding principles for effective service recovery include

Fa#e it easy for customers to give feedac#

Enale effective service recovery

ocusing on ho( generous compensation should e

)ssues to consider in having services guarantees are

Po(er of service guarantees

!o( to design service guarantees

)s full satisfaction the est a firm can guarantee?

)s it al(ays appropriate to introduce a service guarantee?

Recovery and Customer !eed(ac0 -/.

ummary of Chapter 13 4erviceR d C ! d( 0 -3.


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'here are seven types of &aycustomers

'he Cheat

'he 'hief

'he Rule Brea#er

'he Belligerent 'he amily euders

'he Iandal

'he *eadeat

'o discourage ause and opportunistic ehavior% (e need to deal(ith customer fraud

Recovery and Customer !eed(ac0 -3.

Chapter 13 Complaint Handling

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Transcript of Chapter 13 Complaint Handling