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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
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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Passives
- Keep quiet- Do not complain
- Do not spread negative word of mouth- Feel if they complaint nothing willhappen.
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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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Activists
Complain everywhere- Friends- Relatives- Third parties
Consumers can become terrorists
Feel consequences are positive.
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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 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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SERVICE RECOVERY
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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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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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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. 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