Complaints and Service Recovery Management Chapter 13 Complaints and Service Recovery Management

Chapter Objectives Discuss the psychology of complaining behavior, including the types of complainers and the types of complaints. Explain customer complaining behavior with regards to the reasons customers do or do not complain, and the outcomes associated with customer complaints. Describe the organic and mechanistic steps involved in developing a service recovery management program. Understand the value of tracking and monitoring service failures and employee recovery efforts. Discuss the basic rules of thumb of the art of service recovery. © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Opening Vignette: Hell Now Hath No Fury Like a Customer Scorned! There are countless examples of situations where customers received poor customer service and the firm’s inadequate response actually exacerbated the failure situation Customers have taken justice into their own hands and become consumer activists BusinessWeek devoted a recent cover story to Consumer Vigilantes with the tagline: “Memo to Corporate America: Hell now hath no fury like a customer scorned” One ignored Comcast customer visited the office and after waiting for two hours without seeing a manager, came back with a hammer and smashed a computer keyboard and telephone Another uploaded a video of him smashing his nonworking Macbook to smithereens with a sledgehammer © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Complaints Instrumental complaints: complaints expressed for the purpose of altering an undesirable state of affairs Example: complaining to a waiter about an overcooked steak Noninstrumental complaints: complaints expressed without expectation that an undesirable state will be altered Example: complaints about the weather (“It’s too hot!”) Ostensive complaints: complaints directed at someone or something outside the realm of the complainer Example: “The chef overcooked this steak!” Reflexive complaints: complaints directed at some inner aspect of the complainer Example: “I wasn’t clear about how I wanted my steak to be prepared.” © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Types of Complainers The Meek Customer The Aggressive Customer A customer who generally never complains The Aggressive Customer A customer who complains on a regular basis, often at length and often loudly enough for everyone else to hear The High-Roller Customer A customer who expects the best and is willing to pay for it The Rip-Off Customer A customer who wants more than they’re entitled to receive The Chronic Complainer Customer A customer who is never satisfied yet continues to return © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13.1: Why Customers “Do” and “Don’t” Complain? © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes Voice High voice: complains to store manager Medium voice: complains to store clerk Low voice: complains to others but no one associated with the store © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes (cont’d) Exit High exit: never purchase from the firm or buys the product again Medium exit: only purchases if other alternatives are not available Low exit: continues to shop as usual © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Complaining Outcomes (cont’d) Retaliation High retaliation: tells lots of people and attempts to physically damage the store Medium retaliation: tells a few people and creates minor inconveniences for the firm Low retaliation: consists of minor negative word-of-mouth and no retaliation at all against the provider or firm © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13.2: Developing a Service Recovery Management Program © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Figure 13.3: The Four Types of Service Failure Identification © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Service Failure Attribution: Identifying the Root Cause Locus Who is responsible for the failure? Is the source of the failure the service provider, the service firm, the customer, or some external force? Stability Is the cause of the failure likely to recur? Is this a one-time incident (unstable), or is the cause of the failure likely to recur (stable)? Controllability Did the responsible party have control over the cause of the failure? © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Recovery Strategy Selection What should the customer receive to offset the failure? Compensatory strategies Restoration strategies Apologetic strategies Reimbursement strategies Unresponsive strategies © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Recovery Strategy Implementation How should the recovery strategy be presented to the customer? Perceived justice consists of three components: Distributive justice Outcomes (e.g., compensation) Procedural justice Process (e.g., time) Interactional justice Human content (e.g., empathy, friendliness) © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Providing Feedback to Employees Employees feel role conflict when a service failure finds them caught between a customer’s expectations for service and the company’s goals of cost containment Employees feel role ambiguity when they do not know how to recover from a service failure Employees need training and feedback About the types of service failures and failure attributions likely to happen About the types of recovery strategies available to them About the manner in which recovery strategies should be offered To reinforce the firm’s positive service recovery culture © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Art of Service Recovery: Basic Rules of Thumb Service recovery paradox: a situation in which the customer rates performance higher if a failure occurs and the contact personnel successfully recover from it than if the service had been delivered correctly in the first place © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Art of Service Recovery: Basic Rules of Thumb (cont’d) Measure the costs Actively encourage complaints Anticipate needs for recovery Train employees Empower the front line Respond quickly Close the loop © 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.