This action might not be possible to undo. Are you sure you want to continue?
1. To provide an overview of customer service 2. To access customer service as a strategic function 3. To explore how to develop a customer service culture 4. To discuss why organizations should plan for service
5. To present the steps to service recovery 6. To explore the hidden benefits of service recovery
Customer service refers to all customer-provider
interactions other than proactive selling and the core product delivery offering that facilitate the organization’s relationship with its customers.
Customer Service as a Strategic Function Customer Service as an Information Resource Customer Service as an Input for Service Design Improvements Customer Service as an Opportunity to Enhance Customer Relationships 4 .
5 .americanexpress. "A dissatisfied customer is an opportunity.Developing a Customer Service Culture When the customer service function is elevated to a strategic level.mbna." Senior executives at MBNA (http://www.com) noted. As a former CEO of American Express (http://www.com) spend four hours each month listening in on customer service telephone calls. the service organization signals its importance to all employees.
One significant function of customer service is to enable the organization to recover from failures that caused customer dissatisfaction and complaints.Developing a Customer Service Culture (cont’d) Service organizations and manufacturing organizations are realizing that customer service is a major corporate asset. 6 .
Developing a Customer Service Culture (cont’d) 7 .
FedEx’s “Hierarchy of Horrors” 1. 3. wrong-day delivery right day. late delivery pick-up not made lost package customer misinformed by FedEx billing and paperwork mistakes employee performance failures damaged packages 8 . 8. 5. 7. 6. 2. 4.
Service Recovery Service recovery is the effort an organization expends to win back customer goodwill once it has been lost due to service failure. 9 .
spoiled wedding photos) may limit firm’s ability to delight customer with recovery efforts 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 If second service failure occurs.g.Service Recovery Service Recovery • Plays a crucial role in achieving customer satisfaction by testing a firm’s commitment to satisfaction and service quality • Impacts customer loyalty and future profitability • Severity and “recoverability” of failure (e. the paradox disappears Best Strategy: Do it Right the First Time 10 ..
process) • May want to avoid confrontation • Don’t want to take the time to write letter/email/call • May not see service important enough to bother complaining • Believe no one will be concerned with the complaint • Feel complaining is stressful/unpleasant 11 .Customer Response Categories to Service Failures • Don’t know how to complain (i.e.
correct the problem Altruistic reasons • 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? 12 .Understanding Customer Responses to Service Failure • Why do customers complain? Obtain compensation Vent their anger – emotional release from frustration Help to improve the service .
Complaining Outcomes Voice • High => store manager • Medium => sales clerk • Low => no one associated with the store Exit • High => never purchases again • Medium => only purchases if other alternatives are not available • Low => continues to shop as usual 13 .
Complaining Outcomes Retaliation • High => tells lots of people and attempts to physically damage the store • Medium => tells a few people and created minor inconveniences • Low => does not retaliate at all 14 .
The Need for Service Recovery The High Cost of Lost Customers Losing customers is expensive When Is Service Recovery Needed? Each point at which the customers encounter the service organization may influence their perception of the service’s excellence (the moment of truth) Other Means of Identifying Recovery Needs Many ways to detect when service recovery efforts may be needed 15 .
Components of an Effective Service Recovery System 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 Resolve Complaints Effectively Develop effective system and training in complaint handling Learn from the Recovery Experience Close the loop via feedback 16 Conduct root cause analysis .
Strategies to Reduce Customer Complaint Barriers 17 .
yet it is important to recognize that service organizations do sometimes fall short. Action is taken quickly & making an effort to correct the problem. the failure. Making the effort to understand & comprehend why customer is disappointed.Steps to Service Recovery Step 1 Apology To apologize means to admit failure. room upgrade on next visit Step 2 Urgent Reinstatement Step 3 Empathy Step 4 Symbolic Compensation To amend in some tangible way of making up for Step 5 Follow-up To check whether the effort to win back customer’s goodwill was successful & well received. --coupon for free lunch. 18 .
free upgrade. Coupons. or by offering a substitute. free products Providing an identical offering. correction (defective product is repaired) or substitution Verbal to indicate that firm is sorry either from frontline providers or upper-level management. correction to the original offering. Simply does not respond to customer complaints about service failures. Restoration Apologetic Reimbursement Unresponsive 19 . Total replacement. discounts.Service Recovery Strategy Selection What Should the Customer Receive to Offset the Failure? Compensatory Compensate the customer to off-set the costs of the service failure. Provide the customer with a refund or store credit.
Benefits of Service Recovery There are several ways systematic service recovery programs benefit an organization: The process can help improve the overall quality of service delivery as the service occurs Keeping track of the sources of dissatisfaction that create a need for recovery can help the organization Service recovery can reduce the incidence of bungled/ failed/ poor moments of truth if information regarding customers’ dissatisfaction is put to good use 20 .
Customer Complaint Management Process 21 .
Handling a Dissatisfied Customer A dissatisfied customer is an opportunity Isolate complaining customer in shared services Apologize and let customer vent/outlet Explain without being defensive Allow customer to choose options Personalize follow-up for satisfaction and suggestions 22 .
Service Guarantees 23 .
Service Guarantees Help Promote and Achieve Service Loyalty • Force firms to focus on what customers want • Set clear standards • Highlight cost of service failures • Help firm identify and overcome fail points • Reduce the risk of purchase decision and build long-term loyalty 24 .
How to Design Service Guarantees • • • • • • Unconditional Easy to understand and communicate Meaningful to the customer Easy to invoke/appeal Easy to collect on Credible 25 .
or physiological risk associated with the purchase 26 .Is it Always Suitable to Introduce a Guarantee? • It may not be appropriate to introduce guarantees when Companies have a strong reputation for service excellence Company does not have good quality level Quality cannot be controlled because of external forces Consumers see little financial. personal.
especially when many customers are present • No organization wants an ongoing relationship with an abusive customer 28 . causing problems for the firm. its employees. and other customers • More potential for mischief in service businesses.Addressing the Challenge of Jaycustomers • Jaycustomer: A customer who behaves in a thoughtless or abusive fashion.
bypassing electricity meters. circumventing TV cables..g.Seven Types of Jaycustomers The Cheat Thinks of various ways to cheat the firm The Thief No intention of paying — sets out to steal or pay less Services lend themselves to clever schemes to avoid payment e. riding free on public transportation Firms must take preventive actions against thieves. but make allowances for honest but absent-minded customers 29 .
should not be too much or inflexible 30 .g. ski patrollers issue warnings to reckless skiers by attaching orange stickers on their lift tickets • Ensure company rules are necessary.Seven Types of Jaycustomers The Rulebreaker • Rules guide customers safely through the service encounter Government agencies may impose rules for health and safety reasons Some rules protect other customers from dangerous behavior e.
and curses Service personnel are often abused even when they are not to be blamed Confrontations between customers and service employees can easily escalate • Firms should ensure employees have skills to deal with difficult situations 31 . threats. maybe mouthing insults.Seven Types of Jaycustomers The Belligerent (Loudmouthed) • Shouts loudly.
Seven Types Of Jaycustomers Family Feuders People who get into arguments with other customers – often members of their own family The Vandal Service vandalism includes pouring soft drinks into bank cash machines. and unhappy customers who feel mistreated by service providers take revenge Prevention is the best cure 32 . breaking hotel furniture Sources: bored and drunk young people. slashing bus seats.
consider longterm value of maintaining the relationship 33 . insisting on prepayment.Seven Types Of Jaycustomers The Deadbeat (Idlers/ lazybones) Customers who fail to pay (as distinct from “thieves” who never intended to pay in the first place) Preventive action is better than cure — e. asking for credit card number when order is taken Customers may have good reasons for not paying If the client's problems are only temporary ones.g..
p. 168 Sprint (http://www.bestbuy. p. 168 Angie’s List (http://www.com). 168 Best Buy (http://www.com). 169 American Express (http://www.americanexpress. p. p. 170 34 . p.Web Sites Stew Leonard’s (http://www.com).com).stew-leonards.angieslist.com).sprint.
com). 173 K-Mart Holding Company (http://www.scandinavian. p. p.com).sewell.com).Web Sites (cont’d) MBNA (http://www. p.kmartcorp.ichotelsgroup.com). 170 Sewell Village Cadillac (http://www. 174 Circuit City (http://www.net).com). 175 35 .circuitcity. 174 Holiday Inn (http://www. p. 175 Scandinavian Airlines (SAS) (http://www. p.mbna. p.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.