Week 12: Handling Customer Complaints and Managing Service Recovery

Question 1

LO1: Outline courses of action open to dissatisfied customers.

Answer 1

• Do nothing (reputation suffers and consumers defect if it happens again)
• Complain in some form to the service firm
• Take private action with a third party (e.g. legal action)
• Defect and not go back to the firm, but engage in negative WOM

Question 2

LO2: Explain the factors influencing complaint behaviour.

Answer 2

• Level of dissatisfaction
• Personal importance of the service
• Benefit of complaining
• Resources available for making a complaint
• Culture

Question 3

LO3: Identify principles of an effective service recovery system.

Answer 3

Complaints should be seen as opportunities to improve: Factors of effective recovery:
• Act Fast
• Apologise, but don’t be defensive
• Show you understand from the customers point of view
• Don’t argue with the customers
• Acknowledge the customers feelings
• Consider compensation
• Try to regain customer goodwill and protect brand equity

Question 4

LO4: Explain techniques for identifying cause of service failures.

Answer 4

• Fishbone Diagram: Cause and effect chart for identifying causes of service failures
• Includes aspect such as equipment, materials, frontstage personnel, backstage personnel, procedures and information
• Allows identification of the root cause into where the service failures may have occurred