This document discusses service failures, customer complaints, and service recovery strategies. It defines service failures as when a customer does not receive what was promised. There are four types of service failures related to core services, requests, unprompted employee actions, and problematic customer behavior. The document also examines why customers do and do not complain, as well as outcomes of complaining related to voice, exit, and retaliation. Finally, it outlines essential aspects of service recovery management including attributing failure, apologizing, empowering employees, providing compensation, and appropriate recovery responses to improve loyalty, sales, and business growth.

1. Service Failures
and
Recovery Strategies

2. SERVICE FAILURE:
STATE WHEN CUSTOMER HAS NOT BEEN
SERVED WHAT HE PROMISED

3. FAILURE REASONS:
ALL THE GAPS IN GAP MODEL ARE THE SOUL
REASON OF SERVICE FAILURE .

4. TYPES OF SERVICE FAILURES
Group 1 Failures
• Core service failures
slow service
unavailable service
other core service failures

5. TYPES OF SERVICE FAILURES
Group 2 Failures
• Responses to implicit/explicit requests
special needs
customer preferences

6. TYPES OF SERVICE FAILURES
Group 3 Failures
• Unprompted/Unsolicited employee actions
level of attention
unusual action
cultural norms
adverse conditions

7. TYPES OF SERVICE FAILURES
(new category)
Group 4 Failures (Employee-reported incidents)
• Problematic customer behavior
drunkenness
verbal and physical abuse
breaking company policies or laws
uncooperative customers

8. TYPES OF COMPLAINTS
Instrumental
• expressed for the purpose of altering an undesirable
state of affairs
Non-instrumental
• expressed without the expectation that an
undesirable state will be altered

9. WHY DO CUSTOMERS COMPLAIN?
Correct the problem
Emotional release from frustration
Regain some measure of control by spreading negative w-o-m
Solicit sympathy
Test for consensus
Create an impression of being more intelligent and discerning

10. WHY DON’T CUSTOMERS COMPLAIN?
Don’t know who to complain to
Don’t think it will do any good
May doubt their own subjective evaluation
May accept part of the blame
May want to avoid confrontation
May lack expertise

11. COMPLAINING OUTCOMES
Voice
• High => store manager
• Medium => sales clerk
• Low => no one associated with the store
Exit
• High => never purchases again
• Medium => only purchases if other alternatives are not available
• Low => continues to shop as usual

12. COMPLAINING OUTCOMES
Retaliation
• High => tells lots of people and attempts to physically damage
the store
• Medium => tells a few people and created minor inconveniences
• Low => does not retaliate at all

13. TRENDS IN COMPLAINT RESOLUTION
Complaints are more likely to be acted upon when:
• complaints are made to managers
• formally designated complaint handlers are involved
• someone with a personal tie to the company is involved

14. SERVICE RECOVERY
 It’s a response of service provider in case of service failure.
 Primary focus on customer retention not attraction.
 Complaint management (reactive )vs service recovery
(proactive).
Service recovery paradox.

15. DEVELOPING A SERVICE RECOVERY
PROGRAM
Measure the costs
• calculate the lifetime value of a customer
Actively encourage complaints
Anticipate needs for recovery
Respond quickly
Train employees
Empower the front-line
Close the loop

16. Essentials of SRM
• ATTRIBUTION or RECOGINITION OF FAILURE.
• APOLOGIZING.
• EMPOWEREMENT.
• COMPENSATION.
• EMPLOYEE BEHAVIOUR.
• RECOVERY ACTION
RESPONSE OF SERVICE RECOVERY- EXIT, VOICE AND LOYALITY

17. TYPICAL RECOVERY STRATEGIES
(distributive justice outcomes)
Compensatory strategies
• Gratis (offer for free)
• discounts
• upgrades
• free ancillary service
Refunds

18. TYPICAL RECOVERY STRATEGIES
(distributive justice outcomes)
Corrections
Replacement strategies
Apology
Disregard or No response.

19. Poor responses
• Fail to recognize the seriousness of the problem
• Fail to adequately accommodate the customer
• Act as though nothing is wrong
• Fail to explain why the problem occurred
• Leave the customer to solve the problem on his or her
own
• Promise to do something and don’t follow through

20. ADVANTAGES OF SERVICE
RECOVERY
• INCREASED CUSTOMER LOYALITY.
• HIGER UP SALE AND CROSS SALE
• INCREASED SATISFACTION & POSITIVE WORD OF MOUTH
• INCREMENT IN POSITIVE REFERALS & BUSINESS GROWTH