Chapter 8: managing service recovery

Question 1

In what ways can customers complain and what type of complainers exist?

Answer 1

Ways to complain
- Complain to provider
- Negative offline WoM
- Negative online WoM
- Third party action (testaankoop)
Types of complainers:
- Passives = do not tend to complain to anyone, since they don’t believe it is worth spending time and energy to do so.
- Voicers = will directly contact the service provider, and won’t engage in negative word-of-mouth.
- Irates = irritated and frustrated customers that will not always contact the service provider. They are more inclined to switch and spread negative word-of-mouth before giving the service provider a chance to recover.
- Activists = Will complain to service provider and will spread negative WoM, online as well as offline. In most cases they will also involve a third party and are very likely to switch.

Question 2

Why do customers complain? In what ways can they perceive fairness in service recovery?

Answer 2

Customers complain to get:
- Understanding and accountability/taking responsibility
- Fair treatment
Different perceptions of fairness in service recovery
- Outcome fairness = The results that customers receive from complaints e.g. refunds
- Procedural fairness = The policy rules and timeliness of the complaint process e.g. rule that all complaints are dealt with within two weeks.
–> Procedural fairness is often linked to standards discussed in previous chapters. What is the process in which the service recovery will be dealt with? What is the timeline of the service recovery?

• Interactional fairness = The interpersonal treatment received during the complaint process e.g. attitude of individuals assigned to deal with the complaint.

Question 3

What are service recovery effects?

Answer 3

= Service recovery impacts satisfaction levels, which on its turn influences loyalty and word-of-mouth (WOM) and even performance. Ex. The case with the guitar: due to bad service recovery, the stock price of United was impacted.

Question 4

What is the service recovery paradox?

Answer 4

= the phenomenon where customers that have experienced a good service recovery will be more satisfied than if the service failure wouldn’t have happened at all.

Question 5

What are some service recovery strategies?

Answer 5

• Make the service fail-safe = Design the service delivery in such a way that failure is unlikely. In that way you don’t have to deal with recovery. And if failure occurs, it is easy to deal with since it is a rarity.
• Encourage and track complaints = The best way to deal with failure is being aware of them. If you encourage and track complaints, you have a good overview of failures and you can recover in a better manner. This also gives the company a map of the painpoints in the service delivery process.
• Act quickly = customers expect companies to act quickly after service failure. By doing this, companies can limit the damage and prevent switching behavior.
• Provide adequate explenations = Customers want to know what went wrong and they want companies to take accountability. By providing an adequate explenation, companies can envoke more understanding with their customers.
• Treat customers fairly = customers find it very important to be treated in a fair manner.
• Cultivate relationships with customers = Based on good service recovery, companies can build better relationships with customers and it is a possibility to create loyal customers.
• Learn from recovery experiences = Use service failures and complaints to optimize the service delivery process and the standards that you use.
• Learn from lost customers = This is a last ditch effor to learn from customers, however, it is better to do everything you can to keep them on board.

Question 6

What is the impact of service recovery and what factors determine switching behavior of customers within a service environment ?

Answer 6

Impact of service recovery = Service recovery impacts satisfaction levels, which on its turn influences loyalty and word-of-mouth (WOM) and even performance. Ex. The case with the guitar: due to bad service recovery, the stock price of United was impacted.

Switching behavior is caused by:

• Price = high price, price increase, unfair pricing, deceptive pricing, …
• Inconvenience = location, wait for service, poor website, no mobile app, …
• Core service failure = service mistakes, billing errors, service catastrophe, online service disruption, …
• Service encounter failure = uncaring, impolite, unresponsive online and offline, unknowledgeable, …
• Responsive to service failure = negative response, no response, reluctant response, …
• Competition = found better service
• Ethical problems = cheat, hard, unsafe, conflict of interests, …
• Involuntary switching = customer moved, providers closed, …