service_recovery-hm.ppt

7/27/2019 service_recovery-hm.ppt

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SERVICE RECOVERY

At the end of this module the learning

outcomes are:

What is the importance of service recovery? What are the various types of complainers? What are the expectations of customers? What are the various types of service recovery

strategies?


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SERVICE RECOVERY

SUGGESTED READINGS

Services Marketing by Zeithmal and Bitner2nd. Edition, Chapter 7.


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SERVICE RECOVERY

SERVICE RECOVERY

IBM

A complaint is a gift.

Why

Complaints mean

Where we are going wrong

Where we need to improve

No complaints means something is wrong Receive more than 50000 complaints annually

How to deal with this?


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SERVICE RECOVERY

Best companies have service failures

Inspite of best effortsFailures

WhyInvolvement of people

What do you do?You have to recover?

Service recovery


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SERVICE RECOVERY

Service RecoveryRefers to the actions by an organization inresponse to a service failure

Why failure Unavailable when promised Delivered too late or slowly Rude employees Cause huge problems to organisations Bad word of mouth


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SERVICE RECOVERY

When customers are annoyed you need to fixproblems

This builds Customer satisfaction Customer loyalty Improves bottomline.

Effective service recovery is critical.


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SERVICE RECOVERY

Types of Complainers.

1.Passives2. Voicers3. Irates4. Activists


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SERVICE RECOVERY

Passives

- Keep quiet- Do not complain

- Do not spread negative word of mouth- Feel if they complaint nothing willhappen.


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SERVICE RECOVERY

Voicers- Vociferous- Actively complain

- Less likely to spread negative word ofmouth

- Give company a second chance- By complaining companies improve


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SERVICE RECOVERY

Irates- More vociferous- High negative word of mouth

- Speak to friends and relatives- Do not give provider a second chance- Switch to competition.


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SERVICE RECOVERY

Activists

Complain everywhere- Friends- Relatives- Third parties

Consumers can become terrorists

Feel consequences are positive.


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SERVICE RECOVERY

When customers complain

What do they expect?

Fair treatment

1. Outcome Fairness2. Procedural Fairness

3. Interaction fairness


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SERVICE RECOVERY

Outcome Fairness

- Outcome or compensation- Match their dissatisfaction- What can it be

- Monetary compensation- Apology- Future free service- Reduced charges- Replacements- Equality

Company pay for mistakes


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Procedural Fairness

Southwest Airlines Delayed flight Technical problems

Vacationers

Arrived ten hours late

Sensing delay, airlines acts quickly

Arranged lavish dinner at airport

All procedural delays were removed


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SERVICE RECOVERY

. Procedural FairnessCustomer expect fairness in terms of

- Policies

- Rules- Timeliness of the complaint process- Easy access to complaint process

- Quick handling


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SERVICE RECOVERY

Interaction Fairness- Customers expect to be treated politely, with care

and honesty- Company employees treat customers with fairness

Singapore Airlines

- Customer baggage misplaced- Employee gives money to customer immediately- Promises to keep him informed about tracking of lost

baggage


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SERVICE RECOVERY

Singapore AirlinesInform customer

- Every two hours- Progress on baggage- Courteous

Customer gets a feeling that SIA is interactingpositively and concerned about the baggage

Customer treated with grace, smile and care


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SERVICE RECOVERY

SERVICE RECOVERY STRATEGIES

Various strategies are:

Do it right the first time Welcome and encourage complaints Act quickly Treat customers fairly Learn from recovery experiences

Learn from lost customers Return to Doing it Right


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Do it right the first time

- When things go bad- Company bear the cost

- How to avoid?- Things do not go bad?- Total quality management-Create a culture of Zero defects

- Training- Empowerment of employees


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SERVICE RECOVERY

. Welcome and encourage complaints

- Zero defect Culture- Still failures

- Encourage complaints- Complaints should be

anticipated

encouraged

tracked


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SERVICE RECOVERY

BRITISH AIRWAYSEncourages customers to complaint

- Complaint points- Reservation counter

- Lounge- inside aircrafts- Recorded and tracked- Use of information technology to analyze complaints- Encouraging and handling complaints positively


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SERVICE RECOVERY

Act quickly

Three Steps Take care of problems on the frontline

Empower employees Allow customers to solve their own

problems


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a Take care of problems on the front line

- Customers expect employee to solve complaints- Employee

- Training- Empowerment- Speedy handling- Use of phones by employees- E-mail


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SERVICE RECOVERY

b Empower Employees

- Quick handling of complaints- Effective handling- Proper training

- Solve problems of customers- Listening complaints- Taking initiative- Identifying solutions- Taking decisions

Bending rules from time to time to help customers


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Empower employees

Ritz-Carlton Hotel

- Employees authorized to spend 2000$ on behalf ofthe customer

- Solve complaint- Amount rarely used- Employees have a feeling that it can be used when

required


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c. Allow customers to solve their own

problems- Some problems can be fixed by customers

- Use of technologyFederal Express

- Encourage customers to track consignments- Use of technology

- Most queries are answered


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Treat customers fairly- Fair treatment- Discussed earlier

- Don't discriminateCustomers are very particular about

this?


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Learn from recovery experiences

- When customer complain- You have attended

- Try to analyze- What went wrong?- Area needing improvement

Ensure mistakes are not repeated


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. Learn from lost customers- Lost customers- Find out- Why they left- How were they handled- Conduct- Market research- Indepth interviews

Customers may give a more frank option to market

researchers than to you


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SERVICE RECOVERY

. Return to "Doing it Right"- The first point- Is our service recovery department becoming large

or small- Large

Danger, why?More customers are dissatisfied

- SmallEncouraging, why?Complaint handling is improving

Important aspect of service recovery

service_recovery-hm.ppt

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