chapter 13 Flashcards
why do people not complain (6)
*#1. It Requires Too Much Effort
*#2. Customers Believe There’s No Point
*#3. Unknown Outcomes
*#4. Personality
*#5. You Never Asked
*#6. They Have Made Up Their Minds
Recognize the actions that customers may take in response to service failures. (7)
7 Steps:
1. Failure: service failure occurs
2. Customer complaining
3. Customer expectations once a complaint is made
4. Customer responses to an effective service recovery
5. Principles of effective recovery systems
6. Service guarantees
7. Jaycustomers
why do customer complain?
*Obtain compensation
*Release their anger
*Help to improve the service
*Out of concern for others
what customers expect after they complain (3)
When customers complain they expect the business to address their concerns effectively
- Procedural justice (fair process)
-Customers expect a transparent, structured, and accessible complaint-handling process.
-Clear and simple complaint procedures.
-Reasonable response times.
-No excessive bureaucracy. - Interactional Justice (fair treatment)
-Customers expect to be treated with respect, empathy, and honesty during the complaint process.
-Active listening.
-Clear communication.
-Courteous and professional behavior.
-Apologies when necessary.
3.Outcome justice
-Customers expect fair and adequate compensation that reflects the inconvenience or loss they experienced.
-Refunds.
-Discounts or future credits.
-Replacements or repairs.
-Assurance that the issue won’t happen again.
how do customer respond to effective service recovery
-helps achieve customer satisfaction
-tests firms commitment to satisfaction & service quality
-confidence benefits
-impact loyalty and profitability
Service recovery paradox
customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases
-however if they fail again, the paradox dissapears
-severity and recoverability may limit delight with recovery efforts
Know the principles of effective service recovery systems.
/Strategies to reduce customer complaint barriers (3)
1.Inconvenience: hard to find the right way to send in a complaint
Solution: put customer service hotline numbers, email address, websites
2.Doubtful payoff: uncertain whether any or what action will be taken by the firm to address the issue
Solution: reassure customers that feedback will be taken seriously, features service improvements from the customer feedback
3.Unpleasantness: fear of being treated rudely, harassed, embarrassed
Solution: make providing feedback a positive experience, thank customers, train service employees, allow anonymous feedback
How to Enable Effective Service Recovery
*Be proactive
–On the spot, before customers complain
*Plan recovery procedures
–Identify most common service problems and have prepared scripts to guide employees in service recovery
*Teach recovery skills to relevant personnel
*Empower personnel to use judgment and skills to develop recovery solutions
How Generous Should Compensation Be?
–What is the positioning of our firm?
–How severe was the service failure?
–Who is the affected customer?
Rules for Staff (7)
1.Have fun
2.Acknowledge the customer immediately
3.Involve the customer in important business decisions\
4.Don’t be afraid to say, “I am sorry” and mean it
5.Disarm difficult customers and turn them into satisfied ones
6.Measure customer satisfaction
7.Continuously motivate and train staff
guidelines for front-line employees on how to handle complaining customers and recover from a service failure. (11)
*Time is of the essence to achieve a full recovery
*Acknowledge the customer’s feelings
*Don’t argue with customers
*Show that you understand the problem from the customer’s point of view
*Clarify the facts and sort out the cause
*Give customers the benefit of the doubt
*Propose the steps needed to solve the problem
*Keep customers informed of progress
*Consider compensation
*Persevere to regain customer goodwill
*Self-check the service delivery system and improve it
Recognize the power of service guarantees.
*Force firms to focus on what customers want
*Set clear standards
*Require systems to get & act on customer feedback
*Force organizations to understand why they fail and to overcome potential fail points
*Reduce risks of purchase and build loyalty
Understand how to design effective service guarantees.
*Whatever is promised in the guarantee must be totally unconditional.
*The customer must be clearly aware of the benefits that can be gained from the guarantee.
*The guarantee must be on something that is important to the customer; the compensation should be more than adequate to cover the service failure.
*It should be easy for the customer to invoke the guarantee.
*If a service failure occurs, the customer should be able to easily collect on the guarantee.
*The guarantee should be believable
Know when firms should not offer service guarantees.
*Companies that already have a strong reputation for service excellence may not need a guarantee.
*A firm whose service is poor must first work to improve quality to a level above what is guaranteed.
*Service firms whose quality is truly uncontrollable should not offer a guarantee.
*If consumers see little risk associated with a service, a guarantee adds little value.
what is a jay-customer? name all 7
*Jaycustomer: A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees,
and other customers
*More potential for mischief in service businesses, especially when many customers are present
*No organization wants an ongoing relationship with an abusive customer
- the cheat,
2.the thief,
3.the rulebreaker - the belligerant
- the family freuder
- the vandal
- the deadbeat
the cheat
thinks of various way to cheat the firm
The Thief
No intention of paying
-sets out to steal or pay less
-Services lend themselves to clever schemes to avoid payment
-e.g., bypassing electricity meters, circumventing TV cables, riding free on public transportation
–Firms must take preventive actions against thieves, but make allowances for honest but absent-minded customers
The Rulebreaker
*Many services need to establish rules to guide customers safely through the service encounter
*Government agencies may impose rules for health and safety reasons
*Some rules protect other customers from dangerous behavior
*Ensure company rules are necessary, should not be too much or inflexible
The Belligerent
*Shouts loudly, maybe mouthing insults, threats and curses
*Service personnel are often abused even when they are not to be blamed
*Confrontations between customers and service employees can easily escalate
*Firms should ensure employees have skills to deal with difficult situations
–In a public environment, priority is to remove the person from other customers
–May be better to support employee’s actions and get security or the police if necessary if an employee has been physically attacked
Family Feuders:
-People who get into arguments with other customers―often members of their own family
The Vandal:
–Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture
–Bored and drunk young people are a common source of vandalism
–Unhappy customers who feel mistreated by service providers take revenge
–Prevention is the best cure
The Deadbeat
*Customers who fail to pay (as distinct from “thieves” who never intended to pay in the first place)
–Preventive action is better than cure–e.g., insisting on prepayment; asking for credit card number when order is taken
–Customers may have good reasons for not paying
§If the client’s problems are only temporary ones, consider long-term value of maintaining the relationship
Dealing with Customer Fraud
*If in doubt, believe the customer
*Keep a database of how often customers invoke service guarantees or of payments made for service failure
*Insights from research on guarantee cheating
–Amount of a guarantee payout had no effect on customer cheating
–Repeat-purchase intention reduced cheating intent
–Customers are reluctant to cheat if service quality is high (rather than just satisfactory)
*less to worry about than average providersManagerial implications
–Firms can benefit from offering 100 percent money-back guarantees
–Guarantees should be offered to regular customers as part of membership program since regular customers are unlikely to cheat
–Excellent service firms have
