Switching vs Staying

Compare and Contrast

Presented By:-
Group 5
Service Recovery

It refers to the actions taken by an organization in response to a service

failure to improve the situation for the customer.

 Service Failure occurs for many kinds of reasons

1. Unavailability of Service when promised,

2. Service Delivered late or too slowly.
3. Outcome may be incorrect or poorly executed.
4. Employees may be rude or uncaring.
Service Recovery Failure: Research

Complaining Customers: The Tip of the Iceberg

source: Data from TARP Worldwide Inc., 2007.
Customer Complaint Actions Following Service Failure

Service
Failure

Dissatisfaction

No complaint Complaint
action Action

Complain to Negative
Third party
Word of
Provider Action
Mouth

Exit/Switch Stay
Exit/Switch Stay
Causes of Service Switching
Causes of Service Staying

 Switching barriers
1. Customer Inertia:
Customer commit to developing relationships with firms is that a certain
amount of effort may be required to change firms.

2. Switching cost:
It includes investment of time money or effort such as- setup cost,
learning cost – that make it challenging for the customer to move to
another provider.
SWITCHING VS STAYING

 Researchers found that customers who were not satisfied with the service
recovery were much likely to switch to a different provider.

 The magnitude and criticality of the failure will clearly be a factor in the
future repurchase decisions; If the failure more serious, customer is to switch
no matter what the recovery effort.

 To remain loyal to the service provider or to switch to another provider.

Unhappy Customers’ Repurchase
Intentions
45%
% Definitely will Repurchase

40%

35%

30%

25%

20% 41%
15%
29%
10%
17%
5%
8%
0%

satisfied Mollified Dissatisfied Non complainants

complainants complainants complainants
Source: 2015 Customer Rage study, conducted by Customer care Measurement and
Consulting and the centre for Services Leadership at Arizona state University.
Customers’ relationship with the firm also
influence whether the customers stay or
switch:-

If customers have a true relationships with service providers are more forgiving
of service failures and less likely to switch than are those who have a pseudo-
relationship or a first time encounter.

 True relationship : customer has had repeated contact over time with the
same service provider.
 First time encounter : customer has had only one contact.
 Pseudo relationship : customer has interacted many times with the same
company, but with different service providers each time.
Indian Service Strategy Insight

 Mahindra Ingenious drive.

- Mr Vikramjeet Ghosh stuck up in heavy rain.
- Called to the Maruti helpline but did not got help.

- He dialled the India Garage Service Station which serves Mahindra vehicles.

- It was Mahindra Service Culture that encompassed all its partners so

passionately, whereas for Maruti it was a service delivery failure.