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Service Recovery -1

Service Recovery -1

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Published by: Ruban Jebadurai on Feb 12, 2013
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02/19/2015

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Chapter 13

:

Achieving Service Recovery and Obtaining Customer Feedback

Slide © 2007 by Christopher Lovelock and Jochen Wirtz

Services Marketing 6/E

Chapter 13 - 1

2 .Overview of Chapter 13  Customer Complaining Behavior  Customer Responses to Effective Service Recovery  Principles of Effective Service Recovery Systems  Service Guarantees Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

3 .Customer Complaining Behavior Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

Customer Response Categories to Service Failures (Fig 13.1) Complain to the service firm Take some form of Public Action Complain to a third party Take legal action to seek redress Defect (switch provider) Negative word-ofmouth Service Encounter is Dissatisfactory Take some form of Private Action Take No Action Any one or a combination of these responses is possible Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .4 .

Understanding Customer Responses to Service Failure  Why do customers complain?  What proportion of unhappy customers complain?  Why don’t unhappy customers complain?  Who is most likely to complain?  Where do customers complain?  What do customers expect once they have made a complaint? procedural justice interactional justice outcome justice Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .5 .

2) Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .6 .Customers Often View Complaining as Difficult and Unpleasant (Fig 13.

7 .Customer Responses to Effective Service Recovery Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

8 . not a cost center Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .Importance of Service Recovery  Plays a crucial role in achieving customer satisfaction  Tests a firm’s commitment to satisfaction and service quality  Employee training and motivation is highly important  Impacts customer loyalty and future profitability  Complaint handling should be seen as a profit center.

The Service Recovery Paradox  Customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases than customers without problems (Note: not all research supports this paradox)  If second service failure occurs.9 ..g. spoiled wedding photos) may limit firm’s ability to delight customer with recovery efforts  Best strategy: Do it right the first time Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 . the paradox disappears— customers’ expectations have been raised and they become disillusioned  Severity and “recoverability” of failure (e.

10 .Principles of Effective Service Recovery Systems Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

11 .Components of an Effective Service Recovery System (Fig 13.4) Do the job right the first time Effective Complaint Handling Increased Satisfaction and Loyalty + = Conduct research Identify Service Complaints Monitor complaints Develop “Complaints as opportunity” culture Develop effective system and training in complaints handling Conduct root cause analysis Resolve Complaints Effectively Learn from the Recovery Experience Close the loop via feedback Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

e-mail and postal addresses on all customer communications materials  Have service recovery procedures in place. embarrassment Slide © 2007 by Christopher Lovelock and Jochen Wirtz  Allow for anonymous feedback Services Marketing 6/E Chapter 13 . communicate this to customers  Feature service improvements that resulted from customer feedback  Thank customers for their feedback  Train frontline employees  Hassle.Strategies to Reduce Customer Complaint Barriers (Table 13.12 .1) Complaint Barriers for Dissatisfied Customers Inconvenience  Hard to find right complaint procedure  Effort involved in complaining Doubtful Pay Off  Uncertain if action will be taken by firm to address problem Unpleasantness  Fear of being treated rudely Strategies to Reduce These Barriers  Put customer service hotline numbers.

13 .How to Enable Effective Service Recovery  Be proactive—on the spot. before customers complain  Plan recovery procedures  Teach recovery skills to relevant personnel  Empower personnel to use judgment and skills to develop recovery solutions Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .

Service Guarantees Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .14 .

Service Guarantees Help Promote and Achieve Service Loyalty  Force firms to focus on what customers want  Set clear standards  Highlight cost of service failures  Require systems to get and act on customer feedback  Reduce risks of purchase and build loyalty Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .15 .

How to Design Service Guarantees  Unconditional  Easy to understand and communicate  Meaningful to the customer  Easy to invoke  Easy to collect  Credible Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .16 .

2  Single attribute-specific guarantee  One key service attribute is covered  Multiattribute-specific guarantee  A few important service attributes are covered  Full-satisfaction guarantee  All service aspects covered with no exceptions  Combined guarantee  All service aspects are covered  Explicit minimum performance standards on important attributes Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .Types of Service Guarantees Table 13.17 .

5) Slide © 2007 by Christopher Lovelock and Jochen Wirtz Services Marketing 6/E Chapter 13 .18 .The Hampton Inn 100% Satisfaction Guarantee (Fig 13.

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