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Complaint Handling and Service Recovery - Chapter 13-2

This document discusses the importance of effective service recovery and obtaining customer feedback. It notes that service recovery plays a crucial role in achieving customer satisfaction and impacts loyalty and future profitability. While complaints from customers are rare, there are barriers that prevent dissatisfied customers from complaining such as inconvenience, doubt of payoff, and unpleasantness. The document provides strategies to reduce these complaint barriers and discusses how to design service guarantees and learn from customer feedback to improve service quality.

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Berk Bilgiç
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223 views

Complaint Handling and Service Recovery - Chapter 13-2

This document discusses the importance of effective service recovery and obtaining customer feedback. It notes that service recovery plays a crucial role in achieving customer satisfaction and impacts loyalty and future profitability. While complaints from customers are rare, there are barriers that prevent dissatisfied customers from complaining such as inconvenience, doubt of payoff, and unpleasantness. The document provides strategies to reduce these complaint barriers and discusses how to design service guarantees and learn from customer feedback to improve service quality.

Uploaded by

Berk Bilgiç
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Achieving Service

Recovery and Obtaining


Customer Feedback
Customer Response Categories to
Service Failures
Complaining Customers: The Tip of the
Iceberg
Why don’t customer complain?
Need to develop ways for clients to
complain
Customer Responses to
Effective Service Recovery
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
Seinfeld – The car rental
http://www.youtube.com/watch?v=HWTMa76BzH0&featur
e=related
Passenger not allowed to board earlier plane
https://www.youtube.com/watch?v=YsYkPJ1BTwk
The Service Recovery Paradox

“The best service recovery ever” story:


https://www.youtube.com/watch?v=Z2iBxdF1lNg
The Service Recovery Paradox
 If second service failure occurs, the paradox
disappears—customers’ expectations have been
raised and they become disillusioned

 Severity and “recoverability” of failure (e.g., spoiled


wedding photos)

 Service recovery is expensive

 Best strategy: Do it right the first time


What do customers want from service
recovery?
 Have the product repaired or service fixed
 Be reimbursed for the hassle of having
experienced a problem
 Receive a free product or service in the future
 Explanation by the firm as to what happened
 Assurance that the problem will not be repeated
 A thank you for the customer’s business
 An apology from the firm
 An opportunity for the customer to vent his or
her frustrations to the firm
Example of poor service recovery

 Airbnb news example of poor service recovery


 https://amp.cnn.com/cnn/2019/04/05/europe/irel
and-airbnb-hidden-camera-scli-
intl/index.html?__twitter_impression=true
Principles of Effective
Service Recovery Systems
Components of an Effective Service
Recovery System
Strategies to Reduce Customer
Complaint Barriers
Complaint Barriers for Strategies to Reduce These
Dissatisfied Customers Barriers
Inconvenience  Put customer service hotline
 Hard to find right complaint numbers, e-mail and postal
procedure addresses on all customer
 Effort involved in complaining communications materials
 Have service recovery
Doubtful Pay Off procedures in place,
 Uncertain if action will be communicate this to customers
taken by firm to address  Feature service improvements
problem that resulted from customer
feedback
 Thank customers for their
Unpleasantness
feedback
 Fear of being treated rudely
 Train frontline employees
 Hassle, embarrassment
 Allow for anonymous feedback
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
Learning from Customer
Feedback
Key Objectives of
Effective Customer Feedback Systems
 Assessment and benchmarking of service quality
and performance
 Customer-driven learning and improvements
 Creating a customer-oriented service culture
Customer Feedback Collection Tools

 Total market surveys


 Post-transaction surveys
 Ongoing customer surveys
 Customer advisory panels
 Employee surveys/panels
 Focus groups
 Mystery shopping
 Complaint analysis
 Capture service operating
data
Entry Points for Unsolicited Feedback
 Frontline employees
 Intermediaries acting for original supplier
 Managers contacted by customers at
head/regional office
 Complaint cards deposited in special box or mailed
 Telephone or e-mail
 Complaints passed to company by third-party
recipients
 Consumer advocates
 Trade organizations
 Legislative agencies
Service Guarantees
The Hampton Inn
100% Satisfaction Guarantee

 What are benefits of such a


guarantee?
 Are there any downsides?
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
Disadvantages of satisfaction guarantees

 LL Bean changes its lifetime satisfaction


guarantee due to abuse:
https://www.cnbc.com/2018/02/17/why-ll-bean-
ended-its-lifetime-return-policy.html
How to Design Service Guarantees

 Unconditional
 Easy to understand and communicate
 Meaningful to the customer
 Easy to invoke
 Easy to collect
 Credible
Satisfaction guarantees in hotel industry
 Hampton Inn
 “If you’re not 100% satisfied, we don’t expect you to pay. That’s our promise and
your guarantee.”
 La Quinta
 “At La Quinta Inns & Suites, your satisfaction is 100% guaranteed. If there’s a
problem, please contact the front desk for assistance. We guarantee we’ll
resolve it or your night’s stay is on us!”
 Comfort Inn
 “If you’re not satisfied with our accommodations or service, please let the front
desk know without delay so we can make it right.”
 Fairfield Inn
 “We promise you’ll be satisfied, or we’ll make it right. That is our commitment to
you. If an issue arises, promptly alert the General Manager or a Front Desk
associate so they can resolve it. Hotel associates will make every effort to
resolve the problem to the guest’s satisfaction. If compensation is granted, it will
be limited to the price of one night’s stay or Marriott Rewards points for a future
stay.”
 Radisson
 “If guests are not entirely happy with any aspect of a hotel’s offerings, the team
will make it right, or the guest won’t pay.”

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