Service Failure:
Definition and Types
Impact on customers
Customer Complaints
Service Recovery:
Strategies for effective recovery
Definition: When service performance does not meet customer expectations, resulting in dissatisfaction.
Consequences: Leads to customer dissatisfaction, anger, negative word of mouth, and increased switching behavior.
Key Insight: Organizations can't completely avoid failures but can develop strategies for recovery.
Failures occur due to:
Inseparability: Services are produced and consumed simultaneously.
Perishability: Services cannot be stored.
Intangibility: Services cannot be physically possessed.
Subjectivity: Customer perceptions of service vary.
Failures often arise during direct interactions with service providers.
Service Delivery Failures: Unavailable service, slow service, core service failures.
Customer Needs and Requests: Inadequate attention to special needs or preferences.
Unprompted Employee Actions: Unexpected behavior from staff.
Customer Behavior: Issues caused by problematic customers may include abusive behavior and rule-breaking.
Economic Loss: Seeking refunds or compensation.
Emotional Reasons: Venting anger or frustration.
Service Improvement: Providing feedback for better future service.
Altruism: Helping other customers avoid similar issues.
Passives: Do not take action or complain.
Voicers: Actively complain to providers but do not spread negative word of mouth.
Irates: Likely to spread negative feedback; moderate in complaints to the provider.
Activists: Highly likely to complain across all platforms, including third parties.
A jaycustomer causes disruptions or dissatisfaction through:
Types include: The Cheat, The Thief, The Rulebreaker, The Belligerent, The Family Fueders, The Vandal, The Deadbeat.
Customer switching is a cumulative process influenced by ongoing decisions and service interactions rather than a single event.
Service Recovery: Actions taken by a business to rectify service failures and regain customer satisfaction.
Act swiftly to address issues.
Build relationships with customers.
Provide clear communication and explanations.
Outcome Fairness: Compensation should reflect the customer's dissatisfaction.
Procedural Fairness: Timely and clear processes for resolving complaints.
Interactional Fairness: Politeness and care in employee interactions.
After recovery, it’s vital to:
Track and encourage customer complaints.
Learn from recovery and lost customer experiences.
Implement fail-safe processes to prevent future issues.
A proper recovery can enhance customer loyalty, potentially leading to greater goodwill than if no failure had occurred initially.
Characteristics of Effective Guarantees: Ease of invocation and understanding.
Benefits: Improves company focus on customer standards and generates constructive feedback.
Cautions Against Guarantees: May not fit the company image or could be abused.
Customers dissatisfied with service may act publicly or privately.
Firms must understand the motivations behind customer complaints for effective resolution.
Effective recovery strategies can enhance loyalty through the recovery paradox.
Failures can result from organizational issues, employee motivation, or customer behavior.