Customers complain for several reasons: to receive compensation, release anger, or improve service. However, most unhappy customers do not complain. Those in higher socioeconomic levels are more likely to complain. Customers usually complain where the service took place and expect fair treatment and compensation when making a complaint. Handling complaints properly involves acting quickly, acknowledging customers' feelings, not arguing, proposing solutions, considering compensation, and regaining goodwill.

1. Customer response to
Failure
LAKSHMI MOHAN

3. Understanding customer complaining
behaviour
Why do customers complaint ?
• Obtain compensation : To recover some economic loss by seeking a refund, compensation,
and/or have the service performed again.
•Release their anger: To rebuild self-esteem and/or to release their anger or frustration.
•Help to improve the service: When customers are highly involved with a service, they give
feedback to try & contribute toward service improvements.
•Because of concern of other: Customers want to spare other customers from experiencing the
same shortcomings, and they may feel bad if they fail to draw attention to a problem that will
raise difficulties for others if it remains uncorrected.

4. What proportion of unhappy customers complaint ?
Research shows that on an average, only 5% to 10% of customers who have been unhappy with
a service actually complain.

5. Why don’t unhappy customers complaint ?
• Customers may not want to take the time to write a letter, send an email or make a phone call,
particularly If they don’t see the service as worth the effort.
• Customers believe that no one would be concerned about their problem or would be willing to
resolve it.
•In some situations, people don’t know where to go or what to do.
•Many people feel that complaining is unpleasant. They may be afraid of confrontation, especially
if the complaint involves someone whom the customer knows & may have to deal gain.

6. Who is most likely to complaint?
People in higher socioeconomic levels are more likely to complain than those in lower levels.
Their better education, higher income, & greater social involvement give them the confidence,
knowledge, and motivation to speak up when they encounter problems.

7. Where do customers complain?
Majority of complaints are made at the place where the service was received.
Customers tend to use non interactive channels to complain when they really want to release
their anger & frustration, but resort to interactive channels such as face to face or the
telephone when they want a problem to be fixed or redressed.
Without a formal customer feedback system, only a tiny portion of the complaints may reach
corporate headquarters.

8. What do customer expect once they have made a
complaint?
Whenever a service failure occurs, people expect to be adequately compensated in a fair
manner. However, recent studies show that many customers feel they have not been treated
fairly nor received adequate recompense. When this happens, their reactions tend to be
immediate, emotional, and enduring.
Variation in the satisfaction with a service recovery was determined by 3 dimensions of fairness:
•Procedural justice
•Interactional justice
•Outcome justice

12. How to handle customers Complaints
Act fast
Acknowledge the customer’s feelings
Don’t argue with customers
Propose the steps needed to solve the problems
Consider compensation
Persevere to regain customer goodwill
Check the service delivery system & pursue eminence

13. Example :
The steps you will take to recover a service failure.
Take the case of a customer being unsatisfied with the service that he has received from Cafe
Coffee Day and is complaining about it. The following steps should be followed:
1. Listen to the customer’s complaint and ask him what he find missing in the beverage served to
him. He might be unhappy about the richness or temperature of the brew as compared to his earlier
experience with the service product.
2. Having understood the problem, apologies to the customer for being unable to satisfy him. Take
the product back and replace it with a newly prepared product.
3. You may appease the customer with some complementary products like cookies, etc.