Part 5 Ch15 Service recovery Flashcards
Service failure
service performance that falls below a customer’s expectations and leads to customer dissatisfaction.
Service recovery
the actions taken by an organization in response to a service failure.
Service Recovery effects
successful service recovery make customers every more loyal - generate positive WOM
Service Recovery Paradox
Customers who are initially dissatisfied with a service experience but then experience a high level of excellent service recovery tend to become even more satisfied and are more likely to repurchase.
Customer Responses to Service Failure
Negative Emotions:
anger, discontent, disappointment, self-pity, and anxiety.
Evaluation:
- negative emotions influence how customers evaluate service recovery effort.
Return Decision:
- decision on whether to return to the service provider or not.
Types of Complainers
- Passives:
- Least likely to take action.
- Unlikely to complain directly to the provider, on social media, or to a third party.
- Doubt the effectiveness of complaining. - Voicers:
- Complain to the service provider.
- Less likely to spread negative word-of-mouth (WoM).
- Willing to give the company a second chance.
- Viewed as “best friends” as they believe complaining brings social benefits. - Irates
- More likely to engage in negative word-of-mouth.
- Less likely to give the provider a second chance.
- May switch to a competitor, sharing negative experiences with others. - Activists:
- Above-average propensity to complain on all dimensions.
- Complaining aligns with their personal norms.
- Very positive about the outcome of complaining.
Customer Recovery Expectations
- Service Fixed:
- Customers often expect the service issue to be promptly and effectively resolved. - Reimbursement:
- Expectations may include reimbursement or compensation for any inconvenience or negative experience. - Free of Charge in the Future:
- Customers may expect future services to be provided free of charge as a gesture of goodwill. - Zero Cost Actions:
In cases where high-cost actions are impractical, customers may still accept:
- Apology.
- Smile.
- Explanation of the issue.
Customers’ Recovery Expectations - Fair Treatment
1) Procedural Justice:
- How the issue is solved, involving fair and transparent processes.
- policies and procedures.
2) Interactional Justice:
- How the service provider deals with the customer, emphasizing treating people with dignity.
3) Outcome (Distributive) Justice:
- fair and satisfactory resolutions.
- refund or a sincere apology
contribute to their overall satisfaction with the recovery process.
Service Recovery
Strategies- TRACK COMPLAINS (AND ENCOURAGE THEM)
1) Develop a Positive Mindset:
- opportunities for growth and valuable feedback.
2) Simplify the Complaining Process:
- ensuring customers know where to go and how to provide feedback.
3) Be an Active Listener:
- signaling that the company cares about addressing issues.
4) Gather Detailed Information:
- ensure a thorough understanding.
5) Conduct Periodic Surveys:
-Feedback Collection:
proactive identification of potential issues.
Service Recovery
Strategies- ACT QUICKLY
Key Principle:
prepared to fix customer issues as soon as possible.
Employee Role:
Empowerment m:
- quick response
- Reduces the likelihood of dissatisfied customers
Importance:
- Quick and effective responses contribute to customer satisfaction, loyalty, and positive WOM
Empowerment
- process of granting individuals the authority, autonomy, and responsibility to make decisions and take action in their roles or positions within an organization.
- It involves giving employees the power and confidence to act independently, make choices, and contribute actively to the organization’s goals.
Service Recovery Strategies - Cultivating Relationships with Customers
Benefits
1) Increase Post-Failure Satisfaction:
customers feel valued and understood.
2) Decrease Negative (eWOM):
customers give the service provider the benefit of the doubt.
3) Less Immediate Compensation:
Service Recovery Strategies - Learning from Service Recovery
Learning Dimensions:
1) From the Issue:
- Adjustment, improvements, Revision
2) From the Customer:
- Understanding Customers Better:
gain insights and better understand customers
- Continuous Improvement:
Service Recovery Strategies - service garuantees
- provides standards for organization
- Enhance customer loyalty
- Reduces the risk of uncertainty typical of service sectors
