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What Is Service Recovery??
What Is Service Recovery??
By
Nothing Complain in some form to the Service Firm Take Action Through a 3rd Party Switch to a Competitor & Spread Negative WOM
Propensity for customers not to complain Complaints often dont identify the root of the problem Complaints often dont reach management. Satisfying complaining customers can increase brand loyalty Increase in ease of access to firms can increase complaints Likelihood of complaining is directly related to the severity of the problem Complainers tend to be the heaviest users of the service Dissatisfied customers spread negative WOM.
1970s and 1980s service recovery was the plan for dealing with telecommunications problems or recovering particular services. Companies adopted systems that produced zero defects, to produce a high quality service and a cost effective production line approach. In the late 1970s marketers began to recognise the importance of service recovery for different areas of business and specific service problems. However the idea of zero defects in services is simply an unattainable goal. Use of the word recovery originated from British Airways Putting the Customer First Campaign in the late 1990s
Act Quickly
Service Recovery
Learn form Recovery Experiences
Service Guarantees
Customers value reliability over all other dimensions Statement explaining the service the customer may expect (the promise) and what the company will do if it fails to deliver (the payout). Promise of consistency compared to other services Cover customer costs Repeat business Assure customers subsequent service will be higher quality => change attitudes
Benefits
Provision of error free service due to promise Focus on knowing what the customer really wants Increases volume of customers and lifetime value to firm Encourages purchase Positive word of mouth Customer loyalty Reduced price sensitivity to service
Benefits
Internally:
Sets performance standards Boosts employee performance & morale => tangibilises commitment to the employee & customer Examination of service delivery failure points Generates reliable data through payouts Guards against over promises => honest communication between firm and customer Justified expense as customer retention improves
Why it works
Greatest ailment afflicting service firms is lack of decent systems for generating and acting on customer data. Customer has less incentive to complain:
No evidence No warranty Customers dont know their rights (e.g. is 15 mins too long to wait?) Often have to complain to the person rendering the poor service Comment cards: too short, impersonal, & perceived as useless for resolving problems => guarantee is incentive and vehicle for bringing complaints to management.
Conclusion
Service firms are unable to implement service recovery strategies if they are not informed of their shortcomings, therefore customers must be encouraged to complain. Service recovery is the key to customer satisfaction and achieving this should be a primary goal for service organisations Service recovery strategies play a crucial role in customer satisfaction, as illustrated through the use of Zeithaml and Bitners diagram Service guarantees are an incentive and a vehicle for bringing customer complaints to the organisation.