service recovery, managing demand, services management

8/12/2019 Service Recovery, Managing Demand, Services Management

1/29

Customer Feedback and

Service Recovery


2/29

Customer Response Categories To A

Service Failure

Service Encounter

is Dissatisfactory

Take some form

of public action

Take some form

of private action

Take no action

Complain to the

service firm

Complain to a

third party

Take legal actionto seek redress

Defect (switch

provider)

Negative word-of-

mouth

Any one or a combination of

these responses is possible


3/29

Understanding Customer response

to a service failure

Why do customers complain? (obtain restitution or

compensation; vent their anger; help to improve the

service; altruistic reasons)

What proportion of unhappy customers complain?

(5 to 10% or still lower)

Why dont unhappy customers complain? (no time

to waste; useless activity as no one is concerned &

willing to resolve it; afraid of the confrontation)


4/29

Service paradox

Customers who experience a service failure,which has then been resolvedto their full

satisfaction are more likely to make future

purchases than customers who have no

problemin the first place

Only good for oneservice failure


5/29

Service Guarantees

Its a PROMISEthat if a service delivery failstomeet predefined standards, the customer is

entitled to compensation,

Replacement, refund or credit

Primary function --to lowerthe perceived risks

associated with purchase

Also make it easier for the customer to complaint


6/29

Types of Service Guarantees

Single attribute-specific guaranteeone key

service attribute is covered(Eg: any of 3 specified

pizzas to be served in 10 mins of ordering on working

days between 10 am to 2pm. If delivery is late, the

pizza is free)

Multiattribute-specific guaranteea few important

service attributes are covered (Eg: A friendly

efficient check in ; A clean & comfortable room where

everything works)


7/29

Types of Service Guarantees

Full-satisfaction guaranteeall serviceaspects covered with no exceptions (Eg: If

you are not completely satisfied with any item

you buy from us , return it & we will refund the

full purchase price)


8/29

The Hampton Inn 100% Satisfaction

Guarantee

What are the benefits of

such a guarantee?

Are there any downsides?


9/29

System Through Customer Feedback

Tools

A. Total Market Surveys

Measures satisfaction with allmajor consumer

service processes & products

Objectiveattaining indicator of satisfaction of entire

firm

B. Transactional Surveys

Conducted after customers have completed a specific

transaction

Feedback can tell firm why customers are happy or

unhappy with the process


10/29

System Through Customer Feedback

Tools

C. Service Feedback Cards

Process involves giving customers a feed

back card after completion of process &

inviting them to return it by mail

Not an exact method due to mood swings of the

customer


11/29

System through customer feedback

tools

D. Mystery Shopping

Method often used to determine the whether

frontline staff is displaying desired behavior

Eg: Mystery caller survey to assess whether

courteousness is followed, up-selling & cross-

selling is done, friendly greetings made to the

caller & phone lifted up in certain no. of rings


12/29

Balancing Demand

and Capacity


13/29

Relating Demand to Capacity:

Four Key Concepts

Excess demand: too much demand relative to capacity

at a given time

Excess capacity: too much capacity relative to demand

at a given time Maximum capacity: upper limit to a firms ability to

meet demand at a given time

Optimum capacity: point beyond which service quality

declines as more customers are serviced


14/29

Capacity

VOLUME DEMANDED

TIME CYCLE 1 TIME CYCLE 2

Maximum AvailableCapacity

Optimum Capacity(Demand and Supply

Well Balanced

Low Utilization(May Send Bad Signals)

Demand exceeds capacity(business is lost)

Demand exceedsoptimum capacity(quality declines)

Excess capacity(wasted resources)

CAPACITY UTILIZED


15/29

Alternative Demand Management

Strategies

Take no action

let customers sort it out

Reduce demand

higher prices

Increase demand

lower prices

communication, including promotional incentives

vary product features to increase desirability

more convenient delivery times and places


16/29

Alternative Demand Management

Strategies .

Developing off peak pricing & promotionscheme

Creation of reservation system


17/29

Managing Capacity or Controlling

Supply

Using parttime

employees

Increasingefficiencyof existingpersonnel

Sharingcapacity

with others

Investingin

expansionplans


18/29

Alternative Queuing Configurations

Single line, single server, single stage

Single line, single servers at sequential stages

Parallel lines to multiple servers

Designated lines to designated servers

Single line to multiple servers (snake)

Take a number (single or multiple servers)28

2921

20

24

23

30 25

3126

2732


19/29

Targets for a Hotel by Segment and

Time Period

Out of commission for renovation

Executive service

guests

Transient guestsWeekend

package

Groups and conventions

Airline contracts

100%

50%

Week 7(Low Season)

MNights: TuTime

W Th F S Sn

Executive service guests

Transient guests

W/E

package

Groups (no conventions)

Airline contracts

Week 36(High Season)

M Tu W Th F S Sn

Capacity (% rooms)


20/29

Types of DemandRising demand

Falling demand

Zero demand

Full demand

Overfull demand

Negative demand

Latent demand

Seasonal demand


21/29

Rising Demand

Service offer in growth stage of PLC

Customers are aware of service category &

service brand

More buyers making repeat purchases

Eg: rising demand of cell phones across all

sections


22/29

Falling Demand

Due to direct competition, substitute competition,unattractive pricing, poor service delivery

Marketer should analyze the causes & take

corrective measures

Eg: declining popularity of pool parlors, across

Mumbai


23/29

Zero Demand

Market may not be having need for a particularservice offer

Various demographic, socio-economic factors

Eg: 1.There may not be any demand for English

language in rural parts of Jharkhand

2. Western Union Money transfer in an area where

there is not much migration & people do not

transfer money


24/29

Full Demand

Demand is equal to the supply

Ideal situation for the marketer

Problem arises when a competitor comes out with

an offer

Firms fight for the same pie

Firms then engage into price war with margins

falling


25/29

Overfull Demand

Demand outstrips the supply

Marketer is not able to cater to the demand

Implies either there are very few capable players

or large entry barriers

Eg: 1. There is a great demand for LPG supply

2. Till the advent of mobile phones, there was a

huge demand for telephone which the Telecom

dept. was unable to cater3. Berths in Indian railways especially during

summers & any other holiday seasons


26/29

Negative Demand

Kind of an anti-demand

Customers would do anything to avoid the service

With increasing media reports about harmful

effects of cosmetic surgery or beauty treatment

surgery, there might be negative demand about

the same


27/29

Latent Demand

Demand deep inside the customer

Unquenched as no service satisfies it

Consumer may not be able to articulate his

demand

Eg: good day care centers & crche; FM radio

service


28/29

Seasonal or Irregular Demand

Demand for certain services fluctuates withseasons

Peak demand in some seasons, lesser in others

Eg: 1. hotel accommodation in Lonavala during the

weekends

2. easy availability of movie tickets for the

matinee or afternoon show as compared to the

night or evening show


29/29

THANK YOU

service recovery, managing demand, services management

Documents