Customer Complaints And Service Recovery

7/31/2019 Customer Complaints And Service Recovery

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Complaint data can be invaluable to the development ofyour business, Allowing you to assess your performance,identify any complaint trends and better align your services

to suit customer expectation.Adopting a narrow definition of a complaint will mean youare notAble to assess accurately the real needs of your customers orthe true level of dissatisfaction.

Definition of a complaint is very broad:

..An expression of dissatisfaction made to a supplier inrelation to,


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# Why do customers complain?

o Obtain compensationo Release their angero Help to improve the serviceo Because of concern for others

# What proportion of unhappy customers complain?Generally 9% to 37% of unhappy customers can make complaints to the firms.

# Why dont unhappy customers complain?There are three primary reasons why dissatisfied customers dont complaint:1] They think that it is not worth the time or effort.2] They further think that no one would be concerned about their problem or solving it.

3] They do not know where to go or what to do.


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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


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Restitution:Restitution means making good a loss. If a customer facing any kind ofdamage or dissatisfaction during the working from the organization, they

can make complaint to that institution to take the proper restitution fromsuch firms.

Self-Esteem:Some customer can make complaint only for their self- esteem. Self-esteem means to thing yourself highly of or high regard. These people

think that we are the best in the organization.

Theoretical Explanation:These kinds of customers are listening or got any kind of informationfrom some other source and believe only on that.


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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.


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1]Passive: This group of customer is least likely to take any action. Theyare unlikely to say anything to the provider, less likely than others tospread negative words of mouth, and unlikely to complaint to a thirdparties.

2] Voicers: These customers actively complaint to service providers, butthey are less likely to spread negative word of mouth to go to thirdparties with their complaint. They tend to believe complaining as a socialbenefit and therefore dont hesitate to voice their opinion.

3] Irritate: These consumers are more likely to engage in the negativeword of mouth to the friends and relatives to switch provider than theothers.

4] Activists: These consumers are characterized by above propensity tocomplain on the entire dimension.


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1] An acknowledgement of receipt of the complaint:

It is a strong need that you acknowledge the receipt of all complaints,verbal or written. It is a good idea to allocate a complaint referencenumber and provides the customer with a contact point for furthercorrespondence.

2] An accurate and accessible record of complaint information:

Be sure that your recorded version of the complaint matches exactly thatof the customer. Also make sure that the complaint record is accessible byany area of the organization that the customer may contact.

3] Attachment to timeframes for resolution:

According to TIO, the company or firm should attempt to resolvecomplaints on first contact, but if this isnt possible, then a complaintshould be finalized within 30 days.


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4] Customers must be inform about any delays in resolving acomplaint:

As soon as the company realizes that they are unable to resolve acomplaint in the timeframes given, contact the customer, advising him orher of the delay and set a new timeline.

5] Rewarding Attachment amongst Your Staff:

The complaint handling procedures should be a standard componentofyour employee induction training and should also be included inOngoingtraining as required.

6] Inform Customers Of Complaint Handling Procedures:

A brochure or fact sheet is a great way to make customers aware of yourComplaint handling procedures. You should outline the maincomponents of your procedure and send it to customers with your firstbill and when they lodge a verbal or written complaint with you.


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DOING THE JOBRIGHT THE FIRST

TIME

EFFECTIVECOMPLAINTHANDLING

INCREASEDCUSTOMER

SATISFACTION ANDLOYALTY


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Do nothing, but the service providersreputation is diminished

Complain to the service firm

Take action with a third party such as ACCC

Defect and do not use the provider again


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Service Recovery in an organization progresses through a series ofstages, shown in the following points:

Stage 1, Expiring:

The service of the consumer in this stage is expire means finished.

There is no complaint handling. Angry customers are ignored.Letters to VIPs and even the CEO about a damaged shipment gounanswered.

Stage 2: Reactive:

Customer complaints are heard, and a response is made. But it's acareless process with no defined goals for the response and no oneowning this business process.

Stage 3: Active Listening:


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At this stage, the response to issues voiced by customers is structured.Specific people have the responsibility to respond to complaints andguidelines are in place for the response. However, it is still reactive.

Stage 4: Attentiveness:

The critical change from Stage 3 to 4 is the move from reactive toproactive solicitation of customers with issues.The solicitous role is accomplished by encouraging customer to voicetheir complaints.

Stage 5: Rechecking/ Frequentness:

The pinnacle of Service Recovery Practices is achieved when the

complaint identification merges with business process improvement orsix sigma programs to support root cause identification and resolution.

In essence, we see two levels of feedback loops. First, feedback from thecustomer to the organization. Second, feedback from the customer-facinggroups to its business partners within the organization.


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Fail safe your service

Welcome and Encourage Complaints

Act quickly

(a) Take Care of problems on the frontline

(b) Empower Employees

(c) Allow Customer to Solve Their Own Problem

(d) Treat Customer Fairly(e) Learn from Recovery Experiences

(f) Learn from Lost Customers


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1) Unconditional:-The service recovery should make itspromise unconditionally no strings attached.

2) Meaningful:-The firm should recover elements of theservice that are important to the customer. The payoutshould cover fully the customers dissatisfaction.

3) Easy to Understand and Communicate: Customersneed to understand what to expect. Employees need tounderstand what to do.

4) Easy to Invoke and Collect: The firm shouldeliminate hoops or red tape in the way of accessing orcollecting from the recovery.


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Guarantee is an assurance of the fulfillment of a condition.In a business context, a guarantee is a pledge or assurance that a productoffered by a firm will perform as promised and, if not, and then someform of reparation will be undertaken by the firm.For tangible products, aguarantee is often done in the form of a warranty.Services are often notguaranteed. Service experience is intangible.

The Power of Service Guarantees: Force firms to focus on what customers want. Set clear standards. Require systems to get & act on customer feedback. Force organizations to understand why they fail. Reduce risks of purchase and build loyalty.

How to Design Service Guarantees: Unconditional. Easy to understand and communicate. Meaningful to the customer. Easy to invoke.


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A good guarantee forces the company to focus on its customers.

An effective guarantee sets clear standards for the organization.

A good guarantee generates immediate and relevant feedback.

When the guarantee is invoked there is an instant opportunity to recover,thus satisfying the customer and helping retain loyalty.

Information generated through the guarantee can be tracked and integratedinto continuous improvement efforts.

Employee morale and loyalty can be enhanced as a result of having a service

guarantee in place.

A service guarantee reduces customers sense of risk and builds confidencein the organization.


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57% of respondents had experienced at least oneproblem with products/services in the past 12months

73% with a serious problem took some action to

have it corrected (this varied between 49% and93% depending on the industry and nature ofproblem).

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 withthe same firm again


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Complaining households made an average 3.4contacts in an effort to have their most seriousproblem resolved

Satisfaction declined the further up thehierarchy the customer had to go to get itresolved

On average, a dissatisfied complainant tellsnine other people, while a satisfiedcomplainant tells half as many


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Keep customers informed of progress:uncertainty breeds anxiety

Consider compensation: this may reduce

further complaints and legal action Persevere to regain customer goodwill:

outstanding recovery efforts can build loyaltyand referrals


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Blueprinting: understand the processes behindservice delivery to identify potentially weaklinks

Control charts: displaying performance asmeasured by specific criteria over a period oftime


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If in doubt, believe the customer.

Keep a database of how often customers invoke serviceguarantees or of payments made for service failure.

Customers are reluctant to cheat if service quality is high.(rather than just satisfactory)

Managerial implications: Firms can benefit from offering 100percent money-back guarantees. Guarantees should be

offered to regular customers as part of membershipprogram since regular customers are unlikely to cheat.

Excellent service firms have less to worry about thanaverage providers.

Customer Complaints And Service Recovery

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