Flashcards in Chapter 7 - Service Recovery Deck (40):
How are complaining customers like the tip of the iceberg?
1-5% complain to management or headquarters
45% complain to frontline employee
50% encounter a problem but do not complain
So this means that for every complaint management receives, there is 20-100 of the same complaint going unnoticed
Define a service failure
When a service performance falls below a customers expectations in such a way that leads to customer dissatisfaction.
Define service recovery
actions taken by organization in response to a service failure
Successful service recovery has what effects on customers satisfaction, loyalty, and word of mouth communication, and bottom line performance?
They will be more loyal and then of course more profitability for firms previously learned.
What if service recovery fails?
If the customer is not pleased with the service recovery, they will shop there even less than if they had decided not to complain at all! So its powerful
With service failures, how do people talk about the situation?
They talk to 8 people for successful service recovery, and 18.5 when dissatisfied with response!
How can not having an effective recovery strategy lose employees?
They get aggravated and reduced morale, so that they bounce and then the often overlooked costs of not having an effective service recovery strategy is really expensive
What is the recovery paradox?
This is when someone who encounters a service failure but is then so pleased with service recovery that they become much more satisfied and loyal than if there was no problem at all!
What are the 5 problems with the strategy based on recovery paradox to screw up a little, so that they can recover superbly?
1. As iceberg showed, most don't complain so can't recover what they aren't aware of
2. It is expensive to fix mistakes
3. Ludicrous to encourage service failures, reliability is one of the 5 critical service quality determinents
4. Research suggests customers won event think more highly of firm in long run
5. No guarantee that the customer will end up more satisfied
In short, don't make it a strategy, but if service failure does happen, try to make recovery paradox happen!
What are 6 emotions that can be felt after service failure by customer?
Why are some people likely to not complain?
They may blame themselves, not know of complaint channels, seek social support, and that no good would come of it
Also if he service is unimportant or doesn't mean a lot, of course they would feel less motivation to complain
What are people with complaining personalities?
These guys just like to complain or cause trouble
What type of complaint is often best case scenario for company?
Complaining on the spot to service provider, which allows the firm to recover!
Proactively complaining right after failure or shortly after by phone or something is called what? (2 terms)
voice response or seeking redress
What are three types of complaint channels?
1. Proactive voice response
2. Word of mouth
3. Third Parties such as BBB or government
What are the 4 types of complainers?
These guys don't complain really
complain to service provider, but don't spread neg WOM, these are firms best friends!
Average propensity to complain to company, but will spread WOM and just switch companies
These guys will complain on all fronts, so to provider, WOM, third parties (a lot more than any other group)`
What type of complainer is most likely to complain to third parties?
Service recovery strategies fall into what two types?
Fix the customer
Fix the problem
Both are important, but usually best to fix customer before the problem
What are 4 steps of fixing the customer?
1. Respond quickly
2. Provide appropriate communication
3. Treat customers fairly
4. Cultivate relationships with customers
What are 4 steps of fixing the problem?
1. encourage and track complaints
2. learn from recovery experiences
3. Learn from lost customers
4. Make the service fail safe
More than half of customers resolved in less than 24 hours are completely satisfied, but ping ponging (going to service agent to service agent) is shitty. What is the lesson?
Quick response to service failure can goa long way in appeasing a dissatisfied customer
Does appropriate communication work during service failure?
Yup, and people that are met with an explanation that takes accountability and apology with reassurance it will not recur are more satisfied and likely to be more loyal
In order for an explanation to be perceived as adequate, it must have two primary charactieristics?
1. Content of explanation must be appropriate (relevant facts and pertinent info)
2. Style of delivery
So not via text such as with Malaysia
What are three types of justice customers are looking for following their complaints?
1. Outcome Fairness
(outcome of complaint)
2. Procedural fairness
(was policies, rules, and timelines adequate)
3. Interactional fairness
(interpersonal treatment during complaint process)
How do customers with a strong relationship handle service failures?
They actually require less, and it is easier to fix these customers than non relationship customers. Reaffirming the importance of relationship marketing
When conducting lost customers research, what should be done?
Senior people in the company should do it, and they should focus on only doing it for profitable customers who have left, not just everyone.
What is the first rule of service quality, and arguably the best service recovery strategy?
To do it right the first time! So recovery is unnecessary. So reliability is the most important dimension
What are poka yokes?
These are automatic warnings or controls in place to make sure that mistakes are not made. Such as surgical trays being labelled in hospitals
Define a service guarantee
pledge or assurance that a product offered by a firm will perform as promised, and if not then some form of reparation will be undertaken by the firm
What are the 4 characteristics of effective guarantees?
3. Easy to understand
4. Easy to invoke
What are the two types of service guarantees?
1. unconditional satisfaction guarantee
(There are no limits to the outmode as long as it is satisfying customer)
2. Service attribute guarantees
(So if an aspect of service such as delivery time fails, it is made up)
What are 6 benefits of Service Guarantees?
1. Focuses company to focus on customers
2. Sets clear standards for organization
3. Generates immediate and relevant feedback from customers
4. When evoked there is an instant opportunity to recover
5. Information generated from guarantee can be tracked and integrated into continuous improvement efforts
6. Builds assurance in customers
What are 6 characteristics that make it not appropriate to use guarantees?
1. Existing service quality is poor
2. Guarantee does not fit the company's image
3. Service quality is truly uncontrollable
4. Potential for customers to abuse guarantee
5. Costs of guarantee outweigh benefits
6. Customers perceive little risk of service
What are the 8 causes of switching after service failure?
3. Core service failure
4. Service encounter failures
5. Response to service failure
7. Ethical problems
8. Involuntary switching
Why do people who don't complain have less repurchase intentions than people who complaint but went unresolved ?
Because the ones that complained probably had a higher involvement product/service
For tangible products, what is often done in the form of a warranty?
Why are services often not guaranteed?
1. Cannot return the service
2. Service experience is intangible (so what do you guarantee)
What are the 4 characteristics of effective service guarantees?
(has to happen, no strings attached)
(Should cover the customer dissatisfaction)
3. Easy to understand and communicate
(Customers needs to know what to expect, and employees need to know what to do)
4. Easy to invoke and collect
(Firm should make it easy for customers to collect on guarantee)
How is service guarantee icing?
Its icing on cake, not cake