SERVICE RECOVERY At the end of this module

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? 1

SERVICE RECOVERY SUGGESTED READINGS Services Marketing by Zeithmal and Bitner 2 nd. Edition, Chapter 7. 2

SERVICE 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? 3

SERVICE RECOVERY Best companies have service failures Inspite of best efforts Failures Why Involvement of people What do you do? You have to recover? Service recovery 4

SERVICE RECOVERY • Service Recovery Refers to the actions by an organization in response to a service failure Why failure · Unavailable when promised · Delivered too late or slowly · Rude employees · Cause huge problems to organisations · Bad word of mouth 5

SERVICE RECOVERY When customers are annoyed you need to fix problems This builds § Customer satisfaction § Customer loyalty § Improves bottomline. Effective service recovery is critical. 6

SERVICE RECOVERY Types of Complainers. 1. Passives 2. Voicers 3. Irates 4. Activists 7

SERVICE RECOVERY Passives - Keep quiet - Do not complain - Do not spread negative word of mouth - Feel if they complaint nothing will happen. 8

SERVICE RECOVERY Voicers - Vociferous - Actively complain - Less likely to spread negative word of mouth - Give company a second chance - By complaining companies improve 9

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. 10

SERVICE RECOVERY Activists Complain everywhere - Friends - Relatives - Third parties Consumers can become ‘’terrorists’’ Feel consequences are positive. 11

SERVICE RECOVERY When customers complain What do they expect? Fair treatment 1. Outcome Fairness 2. Procedural Fairness 3. Interaction fairness 12

SERVICE RECOVERY 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 13

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 14

SERVICE RECOVERY. Procedural Fairness Customer expect fairness in terms of - Policies - Rules - Timeliness of the complaint process - Easy access to complaint process - Quick handling 15

SERVICE RECOVERY 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 16

SERVICE RECOVERY • Singapore Airlines Inform customer - Every two hours - Progress on baggage - Courteous Customer gets a feeling that SIA is interacting positively and concerned about the baggage Customer treated with grace, smile and care 17

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” 18

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 19

SERVICE RECOVERY. Welcome and encourage complaints - “Zero defect” Culture - Still failures - Encourage complaints - Complaints should be anticipated encouraged tracked 20

SERVICE RECOVERY BRITISH AIRWAYS Encourages 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 21

SERVICE RECOVERY Act quickly Three Steps • Take care of problems on the frontline • Empower employees • Allow customers to solve their own problems 22

SERVICE RECOVERY 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 23

SERVICE RECOVERY 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 help customers 24

SERVICE RECOVERY 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 25

SERVICE RECOVERY 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 26

SERVICE RECOVERY Treat customers fairly - Fair treatment - Discussed earlier - Don't discriminate Customers are very particular about this? 27

SERVICE RECOVERY Learn from recovery experiences - When customer complain - You have attended - Try to analyze - What went wrong? - Area needing improvement Ensure mistakes are not repeated 28

SERVICE RECOVERY. 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 29

SERVICE RECOVERY. 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 30