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Length: 3 Pages 701 Words

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 ne Continue...


ed 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 productsservices in the past 12 months 73 with a serious problem took some action to have it corrected (this varied between 49 and 93 depending on the industry and nature of problem). This is best done by speedy and effective remedies at the first point of contact. does it seem worth it Cost of complaining e. 4 contacts in an effort to have their most serious problem resolved Satisfaction declined the further up the hierarchy the customer had to go to get it resolved On average, a dissatisfied complainant tells nine other people, while a satisfied complainant tells half as many Factors Influencing Complaining Behaviour Level of dissatisfaction i. value of the outcome Likelihood of resolution i. time and effort Benefits of complaining i. Only 34 who took action were satisfied with the way the problem was resolved 89 of those who were not happy with their complaint outcome said they would not deal with the same firm again Complaining households made an average 3. Service Recovery A crucial element in achieving a satisfied customer A true test of the organisation's commitment to the customer Justice considerations have a large impact on how customers evaluate a provider's recovery efforts The Role of Justice in the Complaint Handling Procedure Procedural justice concerns the policies and rules that comprise the complaining process Interactional justice concerns the behaviour of the firm's representatives during the complaint resolution process Outcome or distributive justice relates to how fairly consumer's are compensated for their complaints Principles of Effective Service Recovery Top management commitment 'Complaints as opportunity' culture Training and empowerment Ownership of complaint Guidelines for Effective Complaint Resolution Act fast: time is of the essence to achieve full recovery Apologise but do not be defensive: it is important to impress on the consumer that the problem is an infrequent occurrence Show understanding for the customer's viewpoint Guidelines for Effective Complaint Resolution Do not argue with customers: gather facts to reach a mutually acceptable solution Acknowledge the customer's feelings to help build rapport Give customers the benefit of the doubt Clarify the steps needed to solve the problem Guidelines for Effective Complaint Resolution Keep customers informed of progress: uncertainty breeds anxiety Consider compensation: this may reduce further complaints and legal action Persevere to regain customer goodwill: outstanding recovery efforts can build loyalty and referrals Learning From Experience Blueprinting: understand the processes behind service delivery to identify potentially weak links Control charts: displaying performance as measured by specific criteria over a period of time Learning From Experience Fishbone diagram: a cause and effect analysis Pareto analysis: 8020 rule . belief that the problem willcan be solved satisfactorily Factors Influencing Complaining Behaviour Available resources for making a complaint Access to a means of registering a complaint Knowing who is to blame for the problem Demographics e. younger and better educated people are more likely to complain Standards for Complaint Handling " The overriding aim of any complaints handling process is to turn dissatisfied consumers into satisfied consumers.