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  • Word Count: 701
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Chapter 5
Handling Customer Complaints and Managing Service Recovery
Chapter 5 Objectives
To outline the courses of action open to a dissatisfied customer
Explain the factors influencing complaint behaviour
Identify the principles of an effective service-recovery system
Explain the techniques for identifying the root cause of service failures

Customer Satisfaction
Customer satisfaction is linked not only to fault free service, but also to what transpires when something does go wrong.

First law of quality might be: “do it right the first time” - but service failure does occur.

Customer Response to Service Failure
Do nothing, but the service provider’s reputation is diminished
Complain to the service firm
Take action with a third party such as ACCC
Defect and do not use the provider again
Complaints as Research Data
Responsive organisations look at complaints in two ways:
As a stream of market research information highlighting where improvements are needed
Series of individual customer problems which need to be solved
Capturing Complaints
Complaints may be made through:
the service provider’s own employees
intermediary organisations acting on behalf of the original supplier
managers who normally work backstage but are contacted by a customer seeking higher authority
suggestions or complaint cards mailed or placed in a special box
complaints to third parties

Complaining Behaviour in South-East Asia
Asian consumers may be less willing to send written complaints than others
Asian consumers are less likely to complain about poor service
Service failures are more likely to be tolerated
Individuals may restrain their own self interest if it would disturb others

SOCAP-TARP 1995 Study

57% of respondents had experienced at least one problem with products/services in the past 12 months
73% with a serious problem took some action to have it corrected (this varied between 49% and 93% depend...

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