1

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?

2

SERVICE RECOVERY

SUGGESTED READINGS

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

3

SERVICE RECOVERYSERVICE 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?

4

SERVICE RECOVERY

Best companies have service failures    Inspite of best efforts    Failures

Why

Involvement of people    What do you do?    You have to recover?    Service recovery

5

SERVICE RECOVERY

• Service RecoveryRefers to the actions by an organization in response  to a service failureWhy failure     ·  Unavailable when promised     ·   Delivered too late or slowly     ·   Rude employees     ·   Cause huge problems to organisations     ·   Bad word of mouth

6

SERVICE RECOVERY

When customers are annoyed you need to fix problems

This builds    § Customer satisfaction    § Customer loyalty    § Improves bottomline.

 Effective service recovery is critical.

7

SERVICE RECOVERY

Types of Complainers.

    1.Passives    2. Voicers    3. Irates    4. Activists

8

SERVICE RECOVERY

Passives    - Keep quiet    - Do not complain    - Do not spread negative word of mouth    - Feel if they complaint nothing will

happen.

9

SERVICE RECOVERY

Voicers    - Vociferous    - Actively complain    - Less likely to spread negative word of

mouth    - Give company a second chance    - By complaining companies improve

10

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.

11

SERVICE RECOVERY

Activists

Complain everywhere     -  Friends     -  Relatives     -  Third parties

Consumers can become ‘’terrorists’’Feel consequences are positive.

12

SERVICE RECOVERY

When customers complain

What do they expect?Fair treatment

    1. Outcome Fairness    2. Procedural Fairness    3. Interaction fairness

13

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  

14

SERVICE RECOVERY

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

15

SERVICE RECOVERY

. Procedural FairnessCustomer expect fairness in terms of    - Policies    - Rules    - Timeliness of the complaint process    - Easy access to complaint process    - Quick handling

16

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

17

SERVICE RECOVERY

• Singapore Airlines

Inform customer    - Every two hours    - Progress on baggage    - CourteousCustomer gets a feeling that SIA is interacting positively and concerned about the baggage

Customer treated with grace, smile and care

18

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”

19

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

20

SERVICE RECOVERY

. Welcome and encourage complaints

    - “Zero defect” Culture    - Still failures    - Encourage complaints    - Complaints should be    anticipated

encouragedtracked

21

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

22

SERVICE RECOVERY

Act quicklyThree Steps    • Take care of problems on the frontline    • Empower employees    • Allow customers to solve their own problems

23

SERVICE RECOVERY

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

24

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

   

25

SERVICE RECOVERY

Empower employees Ritz-Carlton Hotel

    - Employees authorized to spend 2000$ on behalf of the customer    - Solve complaint    - Amount rarely used    - Employees have a feeling that it can be used when

required

26

SERVICE RECOVERY

c. Allow customers to solve their own problems    - Some problems can be fixed by customers    - Use of technology Federal Express    - Encourage customers to track consignments    - Use of technology    - Most queries are answered

27

SERVICE RECOVERY

Treat customers fairly    - Fair treatment    - Discussed earlier    - Don't discriminateCustomers are very particular about this?

28

SERVICE RECOVERY

Learn from recovery experiences

    - When customer complain    - You have attended    - Try to analyze    - What went wrong?    - Area needing improvement

 Ensure mistakes are not repeated

29

SERVICE RECOVERY

. 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

30

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    - Small      Encouraging, why?      Complaint handling is improving

  Important aspect of service recovery