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 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
ed to be solvedCapturing ComplaintsComplaints may be made through:the service provider"tms own employeesintermediary organisations acting on behalf of the original suppliermanagers who normally work backstage but are contacted by a customer seeking higher authoritysuggestions or complaint cards mailed or placed in a special boxcomplaints to third partiesComplaining Behaviour in South-East AsiaAsian consumers may be less willing to send written complaints than othersAsian consumers are less likely to complain about poor serviceService failures are more likely to be toleratedIndividuals may restrain their own self interest if it would disturb othersSOCAP-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 itCost of complaining e. 4 contacts in an effort to have their most serious problem resolvedSatisfaction 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 manyFactors Influencing Complaining Behaviour Level of dissatisfaction i. value of the outcomeLikelihood of resolution i. time and effortBenefits 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 againComplaining households made an average 3. "Service RecoveryA crucial element in achieving a satisfied customerA true test of the organisation"tms commitment to the customerJustice considerations have a large impact on how customers evaluate a provider"tms recovery effortsThe Role of Justice in the Complaint Handling ProcedureProcedural justice concerns the policies and rules that comprise the complaining processInteractional justice concerns the behaviour of the firm"tms representatives during the complaint resolution processOutcome or distributive justice relates to how fairly consumer"tms are compensated for their complaintsPrinciples of Effective Service Recovery Top management commitment "Complaints as opportunity"tm culture Training and empowerment Ownership of complaint Guidelines for Effective Complaint ResolutionAct fast: time is of the essence to achieve full recoveryApologise but do not be defensive: it is important to impress on the consumer that the problem is an infrequent occurrenceShow understanding for the customer"tms viewpointGuidelines for Effective Complaint ResolutionDo not argue with customers: gather facts to reach a mutually acceptable solutionAcknowledge the customer"tms feelings to help build rapportGive customers the benefit of the doubtClarify the steps needed to solve the problemGuidelines for Effective Complaint ResolutionKeep customers informed of progress: uncertainty breeds anxietyConsider compensation: this may reduce further complaints and legal actionPersevere to regain customer goodwill: outstanding recovery efforts can build loyalty and referralsLearning From Experience Blueprinting: understand the processes behind service delivery to identify potentially weak linksControl charts: displaying performance as measured by specific criteria over a period of time Learning From ExperienceFishbone diagram: a cause and effect analysisPareto analysis: 8020 rule . belief that the problem willcan be solved satisfactorilyFactors Influencing Complaining BehaviourAvailable resources for making a complaintAccess to a means of registering a complaintKnowing who is to blame for the problem Demographics e. younger and better educated people are more likely to complainStandards for Complaint Handling " The overriding aim of any complaints handling process is to turn dissatisfied consumers into satisfied consumers.