Chapter 13 Complaints and Service Recovery Management Chapter

Chapter 13 Complaints and Service Recovery Management

Chapter Objectives • Discuss the psychology of complaining behavior, including the types of complainers and the types of complaints. • Explain customer complaining behavior with regards to the reasons customers do or do not complain, and the outcomes associated with customer complaints. • Describe the organic and mechanistic steps involved in developing a service recovery management program. • Understand the value of tracking and monitoring service failures and employee recovery efforts. • Discuss the basic rules of thumb of the art of service recovery. © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Opening Vignette: Hell Now Hath No Fury Like a Customer Scorned! • There are countless examples of situations where customers received poor customer service and the firm’s inadequate response actually exacerbated the failure situation • Customers have taken justice into their own hands and become consumer activists • Business. Week devoted a recent cover story to Consumer Vigilantes with the tagline: “Memo to Corporate America: Hell now hath no fury like a customer scorned” • One ignored Comcast customer visited the office and after waiting for two hours without seeing a manager, came back with a hammer and smashed a computer keyboard and telephone • Another uploaded a video of him smashing his nonworking Macbook to smithereens with a sledgehammer © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Complaints • Instrumental complaints: complaints expressed for the purpose of altering an undesirable state of affairs – Example: complaining to a waiter about an overcooked steak • Noninstrumental complaints: complaints expressed without expectation that an undesirable state will be altered – Example: complaints about the weather (“It’s too hot!”) • Ostensive complaints: complaints directed at someone or something outside the realm of the complainer – Example: “The chef overcooked this steak!” • Reflexive complaints: complaints directed at some inner aspect of the complainer – Example: “I wasn’t clear about how I wanted my steak to be prepared. ” © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Complainers 1. The Meek Customer – A customer who generally never complains 2. The Aggressive Customer – A customer who complains on a regular basis, often at length and often loudly enough for everyone else to hear 3. The High-Roller Customer – A customer who expects the best and is willing to pay for it 4. The Rip-Off Customer – A customer who wants more than they’re entitled to receive 5. The Chronic Complainer Customer – A customer who is never satisfied yet continues to return © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13. 1: Why Customers “Do” and “Don’t” Complain? © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes • Voice – High voice: complains to store manager – Medium voice: complains to store clerk – Low voice: complains to others but no one associated with the store © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes (cont’d) • Exit – High exit: never purchase from the firm or buys the product again – Medium exit: only purchases if other alternatives are not available – Low exit: continues to shop as usual © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes (cont’d) • Retaliation – High retaliation: tells lots of people and attempts to physically damage the store – Medium retaliation: tells a few people and creates minor inconveniences for the firm – Low retaliation: consists of minor negative word-of-mouth and no retaliation at all against the provider or firm © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13. 2: Developing a Service Recovery Management Program © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13. 3: The Four Types of Service Failure Identification © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Service Failure Attribution: Identifying the Root Cause • Locus – Who is responsible for the failure? Is the source of the failure the service provider, the service firm, the customer, or some external force? • Stability – Is the cause of the failure likely to recur? Is this a one-time incident (unstable), or is the cause of the failure likely to recur (stable)? • Controllability – Did the responsible party have control over the cause of the failure? © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Recovery Strategy Selection • What should the customer receive to offset the failure? – Compensatory strategies – Restoration strategies – Apologetic strategies – Reimbursement strategies – Unresponsive strategies © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Recovery Strategy Implementation • How should the recovery strategy be presented to the customer? – Perceived justice consists of three components: 1. Distributive justice – Outcomes (e. g. , compensation) 2. Procedural justice – Process (e. g. , time) 3. Interactional justice – Human content (e. g. , empathy, friendliness) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Providing Feedback to Employees • Employees feel role conflict when a service failure finds them caught between a customer’s expectations for service and the company’s goals of cost containment • Employees feel role ambiguity when they do not know how to recover from a service failure • Employees need training and feedback – About the types of service failures and failure attributions likely to happen – About the types of recovery strategies available to them – About the manner in which recovery strategies should be offered – To reinforce the firm’s positive service recovery culture © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Art of Service Recovery: Basic Rules of Thumb • Service recovery paradox: a situation in which the customer rates performance higher if a failure occurs and the contact personnel successfully recover from it than if the service had been delivered correctly in the first place © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Art of Service Recovery: Basic Rules of Thumb (cont’d) • • Measure the costs Actively encourage complaints Anticipate needs for recovery Train employees Empower the front line Respond quickly Close the loop © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.