Summary Lecture 9 Notes

Page 3: Today's Session Topics

  • Service Failure:

    • Definition and Types

    • Impact on customers

  • Customer Complaints

  • Service Recovery:

    • Strategies for effective recovery

Page 4: Understanding Service Failure

  • 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.

Page 6: Reasons for Service Failures

  • 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.

Page 7: Types of Service Failures

  • 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.

Page 9: Motivations for Customer Complaints

  • 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.

Page 10: Types of Complainers

  • 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.

Page 11: Jaycustomer Behaviors

A jaycustomer causes disruptions or dissatisfaction through:

  • Types include: The Cheat, The Thief, The Rulebreaker, The Belligerent, The Family Fueders, The Vandal, The Deadbeat.

Page 12: Service Switching Causes

Customer switching is a cumulative process influenced by ongoing decisions and service interactions rather than a single event.

Page 14: Service Recovery Defined

Service Recovery: Actions taken by a business to rectify service failures and regain customer satisfaction.

Page 15: Strategies for Service Recovery (Fixing the Customer)

  • Act swiftly to address issues.

  • Build relationships with customers.

  • Provide clear communication and explanations.

Page 16: Fairness in Service Recovery

  • 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.

Page 17: Addressing the Root Problem

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.

Page 18: The Service Recovery Paradox

A proper recovery can enhance customer loyalty, potentially leading to greater goodwill than if no failure had occurred initially.

Page 21: Service Guarantees

  • 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.

Page 22: Summary of Key Points

  • 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.

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