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    4362ch11 Sp10 4362ch11 Sp10 Presentation Transcript

    • Chapter 11: Regaining Customer Confidence Through Customer Service and Service Recovery
      Customer service refers to all customer-provider interactions other than proactive selling and the core product delivery offering that facilitate the organization’s relationship with its customers.
    • Developing a CustomerService Culture
      Service Culture – a culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers is considered a natural way of life and one of the most important norms by everyone; good culture is the norm
      Behavior of employees heavily influenced by the culture of that organization
    • Service Culture
      Leadership and Service Culture – culture is employees perception of what management really believes;
      Employees understand what is important in the organization through the daily experiences they have with organizational leaders.
      What do leaders say and do? How do they treat others? – How does this impact culture?
    • Service Culture
      Implications:
      In many service settings, employees interact with customers with no management present. In such instances, the firm must rely on its service culture to influence employee thoughts, feelings, and behaviors.
      Customer service is a major corporate asset.
      One significant function of customer service is to enable the organization to recover from failures that caused customer dissatisfaction and complaints.
    • Service Recovery
      Service recovery is the effort an organization expends to win back customer goodwill once it has been lost due to service failure.
      Actions taken in response to service failure
    • The Need for Service Recovery
      The High Cost of Lost Customers
      Losing customers is expensive
      When Is Service Recovery Needed?
      Each point at which the customers encounter the service organization may influence their perception of the service’s excellence (the moment of truth)
    • The Need for Service Recovery
      Other Means of Identifying Recovery Needs
      Welcome and Encourage Complaints – complaints should be anticipated, encouraged, and tracked.
      Fail-Safe the Service – Do It Right the First Time.
    • The Need forService Recovery (cont’d)
      A moment of truth is any contact point with a service organization that the customer uses to evaluate the service delivery.
      Service encounters as “moments of truth”
    • The Service Encounter
      is the “moment of truth”
      occurs any time the customer interacts with the firm
      can potentially be critical in determining customer satisfaction and loyalty
      types of encounters:
      remote encounters, phone encounters, face-to-face encounters
      is an opportunity to:
      build trust
      reinforce quality
      build brand identity
      increase loyalty
    • A Service Encounter Cascadefor a Hotel Visit
      Check-In
      Bellboy Takes to Room
      Restaurant Meal
      Request Wake-Up Call
      Checkout
    • Sources of Pleasure and Displeasure in Service Encounters
      Recovery:
      Adaptability:
      employee response
      to service delivery
      system failure
      employee response
      to customer needs
      and requests
      Spontaneity:
      Coping:
      unprompted and
      unsolicited employee
      actions and attitudes
      employee response
      to problem customers
    • Recovery – Employee Response to Service Delivery System Failures
      They lost my room reservation but the manager gave me the V.P. suite for the same price.
      We had made advance reservations at the hotel. When we arrived we found we had no room – no explanation, no apologies, and no assistance in finding another hotel.
      Do: Acknowledge problem; Explain causes; Apologize; Compensate/upgrade; Lay out options; Take responsibility
      Don’t: Ignore customer; Blame customer; Act as if nothing is wrong; “Pass the buck”
    • Adaptability – Employee Response to Customer Needs and Requests
      My car broke down. All area hotels were full. One understood my situation and offered to rent me a bed set up in a small banquet room.
      Despite our repeated requests, the hotel staff would not deal with the noisy people partying in the hall at 3 a.m.
      Do: Recognize the seriousness of the need; Anticipate; Attempt to accommodate; Adjust the system; Explain rules/policies
      Don’t: Ignore; Promise, but fail to follow through; Show unwillingness to try; Embarrass the customer; Avoid responsibility
    • Sponteneity – Unprompted and Unsolicited Employee Actions
      The hotel staff greeted our team with a “Welcome UCA Bears” banner in the hotel lobby.
      The person at the front desk was paying more attention to the TV than to the hotel guests.
      Do: Take time; Be attentive; Anticipate needs; Listen; Provide information
      Don’t: Exhibit impatience; Ignore; Yell/laugh/swear; Discriminate
    • Coping – Employee Response to Problem Customers
      Flight attendant asked the unruly, intoxicated passenger if he would be driving when the plane landed and offered him coffee. He accepted the coffee and became quieter and friendlier
      The co-pilot was called and asked the man to sit down and leave the others alone, but the man refused. The co-pilot then “decked” the man, knocking him into his seat.
      Do: Take time; Be attentive; Anticipate needs; Listen; Provide information
      Don’t: Exhibit impatience; Ignore; Yell/laugh/swear; Discriminate
    • Service Recovery
      What do you do when you receive poor service?
    • Response to Failures
      If the service failure is really important, if it has critical consequences for the customer, or if the customer has much ego involvement in the service experience, he is more likely to complain.
    • Why Do Customers Complain?
      Obtain restitution or compensation
      Vent their anger
      Help to improve the service
      For altruistic reasons
    • Why Don’t Unhappy Customers Complain?
      Time/Effort/Uncertainty
      Unpleasant experience
      Role perceptions and social norms
    • Unhappy Customers’ Repurchase Intentions
      Unhappy Customers Who Don’t Complain
      9%
      Unhappy Customers Who Do Complain
      19%
      Complaints Not Resolved
      54%
      Complaints Resolved
      82%
      Complaints Resolved Quickly
      Percent of Customers Who Will Buy Again after a
      Major complaint (over $100 losses)
    • Recovery Paradox
      When customer complaints are resolved quickly, the percentage of customers that will repurchase is high.
      Therefore should the company intentionally fail the customer, only to recover quickly?
    • Recovery Paradox
      Recovery paradox: service failures should be encouraged
      Fallacy of Recovery Paradox
      Fixing mistakes is expensive
      Service failure may be too much to be overcome by any recovery effort
      Best strategy: Do it right the first time
    • Customers’ Recovery Expectations
      An apology
      An explanation as to what happened
      An assurance problem would not be repeated
      An opportunity for customer to vent his frustrations
      If firm does nothing about service failure, 86 percent of customers are dissatisfied. If firm provides apology, percentage of dissatisfied customers drops to 20 percent
    • When They Complain, What Do Customers Expect?
      Outcome fairness: outcomes, or compensation should match the level of their dissatisfaction:
      “Their refusal to refund our money or make up for inconvenience and cold food was inexcusable”
    • When They Complain, What Do Customers Expect?
      Procedural fairness: fairness in terms of policies, rules, and timeliness to the complaint process:
      “They should have assisted me with the problem instead of giving me a phone number to call”
    • When They Complain, What Do Customers Expect?
      Interactional fairness: the interpersonal treatment received during the complaint process
      “The receptionist was very rude; she made it seem like the doctor’s time was important but mine was not.”
    • Steps to Service Recovery
      Apology
      Urgent Reinstatement – act quickly; make effort correct the problem; shows customer satisfaction is important to the organization.
      Empathy – make effort to understand why customer is disappointed; listening and empathy skills.
      Symbolic Atonement – tangible compensation: free dessert, ticket for future flight, room upgrade.
      Follow-up – telephone call, letter, email; was recovery effort appreciated? Customer’s low regard for organization changed?
    • Why do they give Poor Service?
      Re-Visiting Cycle of Failure
      Service industries search for productivity: short-term profits, cut costs
      Simplify work routines
      Hire workers as cheaply as possible
      Jobs: repetitive, requires little or no training
      Fast-food, department stores
    • Why do they give Poor Service?
      Cycle of Failure (cont.)
      Low skill levels
      Emphasis on rules, not service
      Use technology for quality control
      Bored employees who lack ability to respond to customer problems
      Become dissatisfied, poor service attitude
    • Why do they give Poor Service?
      Cycle of Failure (outcome)
      Low service quality, high employee turnover.
      Weak profit margins
      The cycle repeats itself with hiring more low-paid employees to work in an unrewarding atmosphere
    • Cycle of Failure, Low Morale = Service Sabatoge (Hostility)
      Routinized = ingrained in the culture
      “Many customers are rude or difficult, not even polite like you or I. Getting your own back evens the score. There are lots of things that you do that no one but you will ever know – smaller portions, dodgy wine, a bad beer – all that and you serve with a smile! Sweet revenge!
      -- Waiter
    • Cycle of Failure, Low Morale = Service Sabatoge (Hostility)
      Routinized = ingrained in the culture
      “Managers always ask for more than is fair and customers have always want something for nothing. Getting back at them is natural – it’s always happened, nothing new in that.”
      -- Front-of-House Operator
    • Cycle of Failure, Low Morale = Service Sabatoge (Hostility)
      Intermittent = individual response
      “I don’t often work with them but the night shift here really gets to me. They are always complaining. So to get back at them, just occasionally, I put a spanner in the works – accidently on purpose I misread their food orders, slow the service down – nothing heavy”
      Senior Chef
    • Poor Service? – Cycle of Mediocrity
      Rigid rules, focus on standardization, operational efficiencies,
      Salary/promotions based on longevity
      Success measured by absence of mistakes rather than productivity and outstanding customer service
      Employees reluctant to leave
      Bureaucratic hassles, lack of service flexibility, customer resentment
    • Poor Service? – Cycle of Mediocrity
      Customer resentment = hostility toward service employees who feel trapped in their jobs and are powerless to improve the situation.
      Employees protect themselves through indifference, play by strict rules, counter rudeness with rudeness.
      Cycle: Unhappy customers complain to helpless employees, generating greater defensiveness on part of employees.
    • Cycle of Success
      Take long-term view of financial performance
      Investing in people (focused recruitment, intensive training, better wages)
      Employee satisfaction = customer satisfaction, loyalty
      Higher profit margins
    • Challenge
      Gap 1: Not Knowing What Customers Expect (Insufficient Marketing Research).
      Gap 2 – Not selecting the right service designs and standards.
      Gap 3 – Not delivering to service standards.
      Gap 4 – Not matching performance to promises (Overpromise).
      Which gap do you think is hardest to close? Why?
    • Challenge
      If firms can get away with poor service, they will. True or False?
      If employees know that excellent service is valued and expected, and rewarded, they will respond.
      True or False?