1 service recovery at the end of this module the learning outcomes are: what is the importance of...
TRANSCRIPT
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SERVICE RECOVERY
At the end of this module the learning outcomes are:
• What is the importance of service recovery? • What are the various types of complainers? • What are the expectations of customers? • What are the various types of service recovery
strategies?
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SERVICE RECOVERY
SUGGESTED READINGS
Services Marketing by Zeithmal and Bitner2nd. Edition, Chapter 7.
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SERVICE RECOVERYSERVICE RECOVERY
IBM
A complaint is a gift.
Why
Complaints mean
Where we are going wrong
Where we need to improve
– · No complaints means something is wrong–
· Receive more than 50000 complaints annually–
· How to deal with this?
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Best companies have service failures Inspite of best efforts Failures
Why
Involvement of people What do you do? You have to recover? Service recovery
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SERVICE RECOVERY
• Service RecoveryRefers to the actions by an organization in response to a service failureWhy failure · Unavailable when promised · Delivered too late or slowly · Rude employees · Cause huge problems to organisations · Bad word of mouth
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When customers are annoyed you need to fix problems
This builds § Customer satisfaction § Customer loyalty § Improves bottomline.
Effective service recovery is critical.
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Types of Complainers.
1.Passives 2. Voicers 3. Irates 4. Activists
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SERVICE RECOVERY
Passives - Keep quiet - Do not complain - Do not spread negative word of mouth - Feel if they complaint nothing will
happen.
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Voicers - Vociferous - Actively complain - Less likely to spread negative word of
mouth - Give company a second chance - By complaining companies improve
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SERVICE RECOVERY
Irates - More vociferous - High negative word of mouth - Speak to friends and relatives - Do not give provider a second chance - Switch to competition.
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Activists
Complain everywhere - Friends - Relatives - Third parties
Consumers can become ‘’terrorists’’Feel consequences are positive.
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When customers complain
What do they expect?Fair treatment
1. Outcome Fairness 2. Procedural Fairness 3. Interaction fairness
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Outcome Fairness
- Outcome or compensation - Match their dissatisfaction - What can it be - Monetary compensation - Apology - Future free service - Reduced charges - Replacements - Equality
Company “pay” for mistakes
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SERVICE RECOVERY
Procedural Fairness
Southwest Airlines– Delayed flight– Technical problems– Vacationers– Arrived ten hours late– Sensing delay, airlines acts quickly– Arranged lavish dinner at airport– All procedural delays were removed
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. Procedural FairnessCustomer expect fairness in terms of - Policies - Rules - Timeliness of the complaint process - Easy access to complaint process - Quick handling
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Interaction Fairness - Customers expect to be treated politely, with care and honesty - Company employees treat customers with fairness Singapore Airlines
- Customer baggage misplaced - Employee gives money to customer immediately - Promises to keep him informed about tracking of lost
baggage
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• Singapore Airlines
Inform customer - Every two hours - Progress on baggage - CourteousCustomer gets a feeling that SIA is interacting positively and concerned about the baggage
Customer treated with grace, smile and care
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SERVICE RECOVERY STRATEGIES
Various strategies are: • Do it right the first time • Welcome and encourage complaints • Act quickly • Treat customers fairly • Learn from recovery experiences • Learn from lost customers • Return to “Doing it Right”
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SERVICE RECOVERY
Do it right the first time
- When things go bad - Company bear the cost - How to avoid? - Things do not go bad? - Total quality management
-Create a culture of “Zero defects” - Training - Empowerment of employees
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. Welcome and encourage complaints
- “Zero defect” Culture - Still failures - Encourage complaints - Complaints should be anticipated
encouragedtracked
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BRITISH AIRWAYSEncourages customers to complaint
- Complaint points - Reservation counter - Lounge - inside aircrafts - Recorded and tracked - Use of information technology to analyze complaints - Encouraging and handling complaints positively
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Act quicklyThree Steps • Take care of problems on the frontline • Empower employees • Allow customers to solve their own problems
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a Take care of problems on the front line
- Customers expect employee to solve complaints - Employee - Training - Empowerment - Speedy handling - Use of phones by employees - E-mail
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b Empower Employees
- Quick handling of complaints - Effective handling - Proper training - Solve problems of customers - Listening complaints - Taking initiative - Identifying solutions - Taking decisions ‘Bending’ rules from time to time to help customers
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Empower employees Ritz-Carlton Hotel
- Employees authorized to spend 2000$ on behalf of the customer - Solve complaint - Amount rarely used - Employees have a feeling that it can be used when
required
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c. Allow customers to solve their own problems - Some problems can be fixed by customers - Use of technology Federal Express - Encourage customers to track consignments - Use of technology - Most queries are answered
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Treat customers fairly - Fair treatment - Discussed earlier - Don't discriminateCustomers are very particular about this?
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Learn from recovery experiences
- When customer complain - You have attended - Try to analyze - What went wrong? - Area needing improvement
Ensure mistakes are not repeated
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. Learn from lost customers - Lost customers - Find out - Why they left - How were they handled - Conduct - Market research - Indepth interviews
Customers may give a more frank option to market researchers than to you
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. Return to "Doing it Right" - The first point - Is our service recovery department becoming large
or small - Large Danger, why? More customers are dissatisfied - Small Encouraging, why? Complaint handling is improving
Important aspect of service recovery