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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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