1. Complaints and Service Recovery Management
Chapter 13
Complaints and Service Recovery Management

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.