Complaint handling and Service Recovery

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INTRODUCTION:

Even with the best organizations, failures can just happen. They may be due to the service not available when promised, may be delivered late or too slowly, the outcome may be incorrect or poorly executed. All this types of failures bring about negative experiences. If they are left unsolved, they can result in customers leaving, telling others about the negative experiences or even challenging through customer courts.
Some complaints are made while service delivery is still taking place, while others are made after the fact. In both the cases, how the complaint handled may determine whether the customer remains with the firm or seeks new suppliers in the future.

MEANING OF COMPLAINT:


Complaint data can be invaluable to the development of your 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 you are not
Able to assess accurately the real needs of your customers or the true level of dissatisfaction.

Definition of a complaint is very broad:

“..An expression of dissatisfaction made to a supplier in relation to,
(a) Carrying on business as a carrier(b) Carrying on business as a carriage service provider,(c) Supplying a content service using a listed carriage service; and (d) Supplying a telecommunications product’s amongst your customer base.


CUSTOMER RESPONSE CATOGORIES TO SERVICE FAILUERS:


When service is faiulre or not satisfied, the customers can take may a kind of public action or public process or may take some kind of private action or private movement or they may can not take any kind of action as they are enough of thire findings. If customer take public action or government action , they can complain directile to the service firm or to the organization or they can complain to the third party or they may take any kind of legal action to seek their redress or to get thire right or benefits. If customer take any kind of private action, they can used to defects or switch directly to the provider or may be used any kind of negative word of mouth to the organization. And if customer is comfortable to their recommendations anout their complaints or they get benefits they can not take any kind of action.

Understanding Customer Responses to Service Failure:

 Why do customers complain?
o Obtain compensation
o Release their anger
o Help to improve the service
o 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 don’t unhappy customers complain?
There are three primary reasons why dissatisfied customers don’t 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.
 Who is most likely to complain?
 Where do customers complain?
 What do customers expect once they have made a complaint?
Dealing with Complaining Customers and Recovering from Service Failure:
 Take complaints professionally and not personally.
 Be prepared to deal with angry customer who may behave in an insulting way to service personnel who may not be at fault.
 Take the perspective that customer complaints allow firm a chance to
o Correct problems,.
o Restore relationships.
o Improve future satisfaction for all.
 Develop effective service recovery procedures.


REASONS OF COMPLAINTS:

 Restitution:
Restitution means making good a loss. If a customer facing any kind of damage or dissatisfaction during the working from the organization, they can make complaint to that institution to take the proper restitution from such 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 and do the complaints only just for satisfying their objective or to collect some kind of attention or praise from other peoples.

 Theoretical Explanation:
These kinds of customers are listening or got any kind of information from some other source and believe only on that. Theoretical explanation means dealing with theory only. These people can sort some form of theory about the organization whether it is good or bad and make a complaint about it.

CUSTOMER COMPLAINT ACTION:

Customer complaint action following service failure. The action can be of various types. A classified customer can chose to complaint on the spot to the service provider given by the company, the opportunity to respond immediately. This is often the best- case scenario for the company. It has the second chance right at that movement, to satisfy the customer. Keep his or her business in future; he may potentially avoid any negative word of mouth.

Some customers choose not to complaint directly to the provider but rather spread negative word of mouth about the company to friends, relatives and co- workers. This negative word of mouth can be extremely detrimental because it can reinforce the customer’s feeling of negativism and spread that negative impression to others as well. Further the company has no chance to recover unless the negative word of mouth is accompanied by a complaint, directly to the company.
Many customers are very passive about their dissatisfaction. They are simply saying or doing nothing, take action or not and at some point of time they will decide weather to stay with that provider or not.

TYPES OF COMPLAINRES:

Research suggests that people can be grouped into categories based on how they respond to failures. Four categories of response types were identified in a study that focused on grocery stores, automotive repair service, medical care and banking and financial services. These are as follows:

1] Passive: This group of customer is least likely to take any action. They are unlikely to say anything to the provider, less likely than others to spread negative words of mouth, and unlikely to complaint to a third parties.

2] Voicers: These customers actively complaint to service providers, but they are less likely to spread negative word of mouth to go to third parties with their complaint. They tend to believe complaining as a social benefit and therefore don’t hesitate to voice their opinion.

3] Irritate: These consumers are more likely to engage in the negative word of mouth to the friends and relatives to switch provider than the others. They are about average in their prosperity to complain to the provider. They are unlikely to complain to the third parties.

4] Activists: These consumers are characterized by above propensity to complain on the entire dimension. They will complain to the provider, they will tell others, and they are more likely than any other group to complain to third parties

COMPLAINT HANDLING PROCEDURE:

According to TIO- a telecommunication industry, there is a specific & suitable procedure of complaint handling which is necessary to be followed in any organization. But you will need to tailor your own procedures to suit the size of your business and the services you offer. At a minimum your complaint handling procedure should require the following for your staff or organization:

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 reference number and provides the customer with a contact point for further correspondence.

2] An accurate and accessible record of complaint information:

Be sure that your recorded version of the complaint matches exactly that of the customer. Also make sure that the complaint record is accessible by any 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 resolve complaints on first contact, but if this isn’t possible, then a complaint should be finalized within 30 days.

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

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


5] Rewarding Attachment amongst Your Staff:

The complaint handling procedures should be a standard component
of your employee induction training and should also be included in
Ongoing training as required.

6] Inform Customers Of Complaint Handling Procedures:

A brochure or fact sheet is a great way to make customers aware of your Complaint handling procedures. You should outline the main components of your procedure and send it to customers with your first bill and when they lodge a verbal or written complaint with you. If a brochure is too expensive or not practical, place some information on your website, or consider sending your customers an email outlining your policies and procedures. Just make sure that you make it accessible and easy to read and understand.



MEANING OF SERVICE RECOVERY:

Service Recovery refers to the actions taken by an organization in response to a service failure. Failures occur for all kinds of reasons- the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed and employees may be rude. All this type of failures brings about negative feelings and responses from customers. Left unfixed, they can result in customers leaving, telling other customers about their negative experiences and even challenging the organization through customer’s rights or legal channels. Research has shown that, resolving customer problem effectively has a strong impact of customer’s satisfaction, loyalty and bottom- line performance. That is customer who experience service failure, but ultimately satisfied based on recovery efforts by the firm, will be more loyal than those whose problems are not resolved.
Those who complain and have their problems resolved quickly, are much more likely to come again than those whose complaints are not resolved. Those who never complaint is less likely to come.


SERVICE RECOVERY STAGES:

Service Recovery in an organization progresses through a series of stages, 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 go unanswered.

Stage 2: Reactive:

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


Stage 3: Active Listening:

At this stage, the response to issues voiced by customers is structured. Specific people have the responsibility to respond to complaints and guidelines 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 to proactive solicitation of customers with issues. The reason this is so important is that most customers don't bother to complain. They just move on to other suppliers of products. Haven't we all done this? It's a lot of work to complain!

The solicitous role is accomplished by encouraging customer to voice their complaints. Event surveys (also known as transactional or transaction-driven survey) are a commonly used technique to get issues voiced. The survey design must be such that more than just high level measurement of customer satisfaction is captured. The design must allow for action to be taken. The desire for anonymity complicates the task. (Our Survey Workshops help attendees create such actionable survey instruments.)

Stage 5: Rechecking/ Frequentness:

The pinnacle of Service Recovery Practices is achieved when the complaint identification merges with business process improvement or six sigma programs to support root cause identification and resolution. The owners of business processes that cause customer issues are notified of the occurrences to prompt reexamination of the process design.

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


STRATEGIES OF SERVICE RECOVERY:

1] Fail Safe Your Service:

The first rule of service quality is to do it right at the first time. Even more fundamentally, it is important to create a culture of zero defections for ensuring, doing it right the first time. Within a zero defections culture, everyone understands the importance of reliability. Employees and managers aim to satisfy every customer and look for a ways to improve service. Employees in a zero defection culture truly understand and appreciate the “Lifetime value of customer” concept. Thus they are motivated to provide quality service at every time and to every customer.

2] Welcome & Encourage Complaints:

A critical component of a service recovery strategy is to welcome and encourage complaints. Complaints should be anticipated, encouraged and tracked. The complaining customer should truly be viewed as a friend. There are number of ways to encourage and track complaints. Customer research can be designed specifically to do this, through satisfaction survey, critical incident studies. Part of encouraging complaints also involves teaching customers that how to complain. Sometimes they have no idea whom to speak to, what the process is, or what will be involved. It is best to make this process as simple as possible and posses no problems.

One way that the complaining process has been simplified for customers is through technology. New technologies have resulted in easier access for customers to sales and service representatives. For e.g. Toll- free, call centers, e- mail, SMS etc.

3] Act Quickly:

Complaining customer want quick response. Thus if the company welcomes, even encourages complaints, it must be prepared to act on them quickly. This requires following system and procedures that allow quick action as well as empowered employees.

1) Take Care of problems on the frontline:
Customers want the persons who hear their complaints to solve their problems, whether the complaint is registered in person, over the phone or via the internet. The first person to hear a complaint from a customer “owns” that complaint until he or she is sure that it is solved.

2) Empower Employees:
Employees must be trained and empowered to solve problems as they occur. A company may use customer knowledge database as the key source for immediate problem solving by its customer service representatives. These representatives are empowered to solve the customer’s problems.

3) Allow Customer to Solve Their Own Problem:
Another way that problem or complaints can be handled quickly is by building systems that allow customers to actually solve their own service needs and fix their own problems. Typically this is done through technology and advancement.

4] Treat Customer Fairly:
In responding quickly, it is also critical to treat each customer fairly. Customer expects to be treated fairly in the terms of the outcome they receive, the process by which the service recovery takes place, and the interpersonal treatment they receive.

5] Learn from Recovery Experiences:
By tracking service recovery efforts and solutions, managers can often learn about systematic problems in the delivery system that needs fixing. By conducting root- cause analysis, firms can identify the sources of the problem and modify processes. Sometimes eliminating is completely a need for service recovery.

6] Learn from Lost Customers:
Another key component of an effective service recovery strategy is to learn from the customer who defect or decide to leave. Formal market research discovers the reasons for customers left out, which can assist in preventing failures in the future. This type of research is difficult and painful for companies, as no one really likes to examine their failures. Yet this is essential for preventing the same mistakes and losing more customers in the future. This is most effectively done by depth interviews and administered by skilled interviewers who truly understand the business. In conducting this type of research, it is important to focus on important or profitable customers who have left, not just everyone who has left the company.

HOW TO ENABLE EFFECTIVE SERVICE RECOVERY:

Be proactive:-

On the spot, before customers complain.

Plan recovery procedures:-

Identify most common service problems and have prepared scripts to guide employees in service recovery.
Teach recovery skills to relevant personnel:-

Empower personnel to use judgment and skills to develop recovery solutions.

Recovering from service failures takes more than just pious expressions of determination to resolve any problems that may occur. It requires commitment, planning, and clear guidelines. Service recovery efforts should be flexible, with employees being trained to handle complaints and empowered to develop solutions that will satisfy complaining customers.

Taking care of customers requires that the firm also take care of its employees. Managers need to recognize that handling complaints about service failures and attempting service recovery can be stressful for employees, especially when they are treated abusively for problems over which they have no control.

CHARACTERISTICS OF AN EFFECTIVE SERVICE RECOVERY:

1) Unconditional:-
The service recovery should make its promise unconditionally – no strings attached.
2) Meaningful:-
The firm should recover elements of the service that are important to the customer.
The payout should cover fully the customer’s dissatisfaction.
3) Easy to Understand and Communicate:
Customers need to understand what to expect.
Employees need to understand what to do.
4) Easy to Invoke and Collect:
The firm should eliminate hoops or red tape in the way of accessing or collecting from the recovery.

SERVICE GUARANTEE:

Guarantee is an assurance of the fulfillment of a condition.
In a business context, a guarantee is a pledge or assurance that a product offered by a firm will perform as promised and, if not, and then some form of reparation will be undertaken by the firm.
For tangible products, a guarantee is often done in the form of a warranty.
Services are often not guaranteed. 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.

 Easy to collect.

BENEFITS OF SERVICE GUARANTEES:

 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 from customers.
 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 integrated into 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 confidence in the organization.


JAY - CUSTOMERS:

Jay customers are those who act in a thoughtless and abusive way, causing problems to the firm, employees and other customers. The word JAY comes from JAYWALKER used to describe people who cross streets at unauthorized places or in a dangerous manner. The word JAY is a slang term of “stupid”. To discourage abuse and opportunistic behavior, we need to deal with customer fraud.
More potential for mischief in service businesses, especially when many customers are present.
No organization wants an ongoing relationship with an abusive customer.
TYPES OF JAY- CUSTOMER:
1] The Thief
2] The Rule Breaker
3] The Belligerent
4] The Family Feuders
5] The Vandal
6] The Deadbeat

1] THE THIEF:
No intention of paying--sets out to steal or pay less.
This customer does not pay for services and is out to steal goods and services or tries to pay less than full price by methods like switching price tickets, contesting bill on baseless grounds etc. Riding free on public transportation, sneaking into movies theatres etc are EG of what such customers do.

2] THE RULE BREAKER:
Some customers break rules. There may rules laid down by the service provider to ensure safety or there may be rules imposed by govt. agencies etc. when such rules are broken they may create problem for the customers and the service.

3] THE BELLIGERENT:
We can see such customers in stores or at the airport or a hotel they could be shouting angrily or coolly mouthing off insult, threats and obscenities. They may such behavior when they are ignored or when service breaks down or service are clumsy or when staff is unhelpful or when orders are given incorrectly.

4] FAMILY FEUDERS:
People who get into arguments with other customers – often members of their own family.


5] THE VANDAL:
Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture.
 Bored and drunk young people are a common source of vandalism.
 Unhappy customers who feel mistreated by service providers take revenge.
 Prevention is the best cure.

6] DEAD BEAT:
Customers who fail to pay for the services they have received they are called deadbeat. There may be many reasons why customers end up by doing this. It is not that they do not want pay but they may not be in the position to pay. They are different from thieves.

DEALING WITH CUSTOMER FRAUD:
 If in doubt, believe the customer.
 Keep a database of how often customers invoke service guarantees or of payments made for service failure.
 Insights from research on guarantee cheating:
 Amount of a guarantee payout had no effect on customer cheating.
 Repeat-purchase intention reduced cheating intent.
 Customers are reluctant to cheat if service quality is high. (rather than just satisfactory)
 Managerial implications:
 Firms can benefit from offering 100 percent money-back guarantees.
 Guarantees should be offered to regular customers as part of membership program since regular customers are unlikely to cheat.
 Excellent service firms have less to worry about than average providers.
 
INTRODUCTION:

Even with the best organizations, failures can just happen. They may be due to the service not available when promised, may be delivered late or too slowly, the outcome may be incorrect or poorly executed. All this types of failures bring about negative experiences. If they are left unsolved, they can result in customers leaving, telling others about the negative experiences or even challenging through customer courts.
Some complaints are made while service delivery is still taking place, while others are made after the fact. In both the cases, how the complaint handled may determine whether the customer remains with the firm or seeks new suppliers in the future.

MEANING OF COMPLAINT:


Complaint data can be invaluable to the development of your 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 you are not
Able to assess accurately the real needs of your customers or the true level of dissatisfaction.

Definition of a complaint is very broad:

“..An expression of dissatisfaction made to a supplier in relation to,
(a) Carrying on business as a carrier(b) Carrying on business as a carriage service provider,(c) Supplying a content service using a listed carriage service; and (d) Supplying a telecommunications product’s amongst your customer base.


CUSTOMER RESPONSE CATOGORIES TO SERVICE FAILUERS:


When service is faiulre or not satisfied, the customers can take may a kind of public action or public process or may take some kind of private action or private movement or they may can not take any kind of action as they are enough of thire findings. If customer take public action or government action , they can complain directile to the service firm or to the organization or they can complain to the third party or they may take any kind of legal action to seek their redress or to get thire right or benefits. If customer take any kind of private action, they can used to defects or switch directly to the provider or may be used any kind of negative word of mouth to the organization. And if customer is comfortable to their recommendations anout their complaints or they get benefits they can not take any kind of action.

Understanding Customer Responses to Service Failure:

 Why do customers complain?
o Obtain compensation
o Release their anger
o Help to improve the service
o 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 don’t unhappy customers complain?
There are three primary reasons why dissatisfied customers don’t 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.
 Who is most likely to complain?
 Where do customers complain?
 What do customers expect once they have made a complaint?
Dealing with Complaining Customers and Recovering from Service Failure:
 Take complaints professionally and not personally.
 Be prepared to deal with angry customer who may behave in an insulting way to service personnel who may not be at fault.
 Take the perspective that customer complaints allow firm a chance to
o Correct problems,.
o Restore relationships.
o Improve future satisfaction for all.
 Develop effective service recovery procedures.


REASONS OF COMPLAINTS:

 Restitution:
Restitution means making good a loss. If a customer facing any kind of damage or dissatisfaction during the working from the organization, they can make complaint to that institution to take the proper restitution from such 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 and do the complaints only just for satisfying their objective or to collect some kind of attention or praise from other peoples.

 Theoretical Explanation:
These kinds of customers are listening or got any kind of information from some other source and believe only on that. Theoretical explanation means dealing with theory only. These people can sort some form of theory about the organization whether it is good or bad and make a complaint about it.

CUSTOMER COMPLAINT ACTION:

Customer complaint action following service failure. The action can be of various types. A classified customer can chose to complaint on the spot to the service provider given by the company, the opportunity to respond immediately. This is often the best- case scenario for the company. It has the second chance right at that movement, to satisfy the customer. Keep his or her business in future; he may potentially avoid any negative word of mouth.

Some customers choose not to complaint directly to the provider but rather spread negative word of mouth about the company to friends, relatives and co- workers. This negative word of mouth can be extremely detrimental because it can reinforce the customer’s feeling of negativism and spread that negative impression to others as well. Further the company has no chance to recover unless the negative word of mouth is accompanied by a complaint, directly to the company.
Many customers are very passive about their dissatisfaction. They are simply saying or doing nothing, take action or not and at some point of time they will decide weather to stay with that provider or not.

TYPES OF COMPLAINRES:

Research suggests that people can be grouped into categories based on how they respond to failures. Four categories of response types were identified in a study that focused on grocery stores, automotive repair service, medical care and banking and financial services. These are as follows:

1] Passive: This group of customer is least likely to take any action. They are unlikely to say anything to the provider, less likely than others to spread negative words of mouth, and unlikely to complaint to a third parties.

2] Voicers: These customers actively complaint to service providers, but they are less likely to spread negative word of mouth to go to third parties with their complaint. They tend to believe complaining as a social benefit and therefore don’t hesitate to voice their opinion.

3] Irritate: These consumers are more likely to engage in the negative word of mouth to the friends and relatives to switch provider than the others. They are about average in their prosperity to complain to the provider. They are unlikely to complain to the third parties.

4] Activists: These consumers are characterized by above propensity to complain on the entire dimension. They will complain to the provider, they will tell others, and they are more likely than any other group to complain to third parties

COMPLAINT HANDLING PROCEDURE:

According to TIO- a telecommunication industry, there is a specific & suitable procedure of complaint handling which is necessary to be followed in any organization. But you will need to tailor your own procedures to suit the size of your business and the services you offer. At a minimum your complaint handling procedure should require the following for your staff or organization:

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 reference number and provides the customer with a contact point for further correspondence.

2] An accurate and accessible record of complaint information:

Be sure that your recorded version of the complaint matches exactly that of the customer. Also make sure that the complaint record is accessible by any 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 resolve complaints on first contact, but if this isn’t possible, then a complaint should be finalized within 30 days.

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

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


5] Rewarding Attachment amongst Your Staff:

The complaint handling procedures should be a standard component
of your employee induction training and should also be included in
Ongoing training as required.

6] Inform Customers Of Complaint Handling Procedures:

A brochure or fact sheet is a great way to make customers aware of your Complaint handling procedures. You should outline the main components of your procedure and send it to customers with your first bill and when they lodge a verbal or written complaint with you. If a brochure is too expensive or not practical, place some information on your website, or consider sending your customers an email outlining your policies and procedures. Just make sure that you make it accessible and easy to read and understand.



MEANING OF SERVICE RECOVERY:

Service Recovery refers to the actions taken by an organization in response to a service failure. Failures occur for all kinds of reasons- the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed and employees may be rude. All this type of failures brings about negative feelings and responses from customers. Left unfixed, they can result in customers leaving, telling other customers about their negative experiences and even challenging the organization through customer’s rights or legal channels. Research has shown that, resolving customer problem effectively has a strong impact of customer’s satisfaction, loyalty and bottom- line performance. That is customer who experience service failure, but ultimately satisfied based on recovery efforts by the firm, will be more loyal than those whose problems are not resolved.
Those who complain and have their problems resolved quickly, are much more likely to come again than those whose complaints are not resolved. Those who never complaint is less likely to come.


SERVICE RECOVERY STAGES:

Service Recovery in an organization progresses through a series of stages, 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 go unanswered.

Stage 2: Reactive:

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


Stage 3: Active Listening:

At this stage, the response to issues voiced by customers is structured. Specific people have the responsibility to respond to complaints and guidelines 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 to proactive solicitation of customers with issues. The reason this is so important is that most customers don't bother to complain. They just move on to other suppliers of products. Haven't we all done this? It's a lot of work to complain!

The solicitous role is accomplished by encouraging customer to voice their complaints. Event surveys (also known as transactional or transaction-driven survey) are a commonly used technique to get issues voiced. The survey design must be such that more than just high level measurement of customer satisfaction is captured. The design must allow for action to be taken. The desire for anonymity complicates the task. (Our Survey Workshops help attendees create such actionable survey instruments.)

Stage 5: Rechecking/ Frequentness:

The pinnacle of Service Recovery Practices is achieved when the complaint identification merges with business process improvement or six sigma programs to support root cause identification and resolution. The owners of business processes that cause customer issues are notified of the occurrences to prompt reexamination of the process design.

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


STRATEGIES OF SERVICE RECOVERY:

1] Fail Safe Your Service:

The first rule of service quality is to do it right at the first time. Even more fundamentally, it is important to create a culture of zero defections for ensuring, doing it right the first time. Within a zero defections culture, everyone understands the importance of reliability. Employees and managers aim to satisfy every customer and look for a ways to improve service. Employees in a zero defection culture truly understand and appreciate the “Lifetime value of customer” concept. Thus they are motivated to provide quality service at every time and to every customer.

2] Welcome & Encourage Complaints:

A critical component of a service recovery strategy is to welcome and encourage complaints. Complaints should be anticipated, encouraged and tracked. The complaining customer should truly be viewed as a friend. There are number of ways to encourage and track complaints. Customer research can be designed specifically to do this, through satisfaction survey, critical incident studies. Part of encouraging complaints also involves teaching customers that how to complain. Sometimes they have no idea whom to speak to, what the process is, or what will be involved. It is best to make this process as simple as possible and posses no problems.

One way that the complaining process has been simplified for customers is through technology. New technologies have resulted in easier access for customers to sales and service representatives. For e.g. Toll- free, call centers, e- mail, SMS etc.

3] Act Quickly:

Complaining customer want quick response. Thus if the company welcomes, even encourages complaints, it must be prepared to act on them quickly. This requires following system and procedures that allow quick action as well as empowered employees.

1) Take Care of problems on the frontline:
Customers want the persons who hear their complaints to solve their problems, whether the complaint is registered in person, over the phone or via the internet. The first person to hear a complaint from a customer “owns” that complaint until he or she is sure that it is solved.

2) Empower Employees:
Employees must be trained and empowered to solve problems as they occur. A company may use customer knowledge database as the key source for immediate problem solving by its customer service representatives. These representatives are empowered to solve the customer’s problems.

3) Allow Customer to Solve Their Own Problem:
Another way that problem or complaints can be handled quickly is by building systems that allow customers to actually solve their own service needs and fix their own problems. Typically this is done through technology and advancement.

4] Treat Customer Fairly:
In responding quickly, it is also critical to treat each customer fairly. Customer expects to be treated fairly in the terms of the outcome they receive, the process by which the service recovery takes place, and the interpersonal treatment they receive.

5] Learn from Recovery Experiences:
By tracking service recovery efforts and solutions, managers can often learn about systematic problems in the delivery system that needs fixing. By conducting root- cause analysis, firms can identify the sources of the problem and modify processes. Sometimes eliminating is completely a need for service recovery.

6] Learn from Lost Customers:
Another key component of an effective service recovery strategy is to learn from the customer who defect or decide to leave. Formal market research discovers the reasons for customers left out, which can assist in preventing failures in the future. This type of research is difficult and painful for companies, as no one really likes to examine their failures. Yet this is essential for preventing the same mistakes and losing more customers in the future. This is most effectively done by depth interviews and administered by skilled interviewers who truly understand the business. In conducting this type of research, it is important to focus on important or profitable customers who have left, not just everyone who has left the company.

HOW TO ENABLE EFFECTIVE SERVICE RECOVERY:

Be proactive:-

On the spot, before customers complain.

Plan recovery procedures:-

Identify most common service problems and have prepared scripts to guide employees in service recovery.
Teach recovery skills to relevant personnel:-

Empower personnel to use judgment and skills to develop recovery solutions.

Recovering from service failures takes more than just pious expressions of determination to resolve any problems that may occur. It requires commitment, planning, and clear guidelines. Service recovery efforts should be flexible, with employees being trained to handle complaints and empowered to develop solutions that will satisfy complaining customers.

Taking care of customers requires that the firm also take care of its employees. Managers need to recognize that handling complaints about service failures and attempting service recovery can be stressful for employees, especially when they are treated abusively for problems over which they have no control.

CHARACTERISTICS OF AN EFFECTIVE SERVICE RECOVERY:

1) Unconditional:-
The service recovery should make its promise unconditionally – no strings attached.
2) Meaningful:-
The firm should recover elements of the service that are important to the customer.
The payout should cover fully the customer’s dissatisfaction.
3) Easy to Understand and Communicate:
Customers need to understand what to expect.
Employees need to understand what to do.
4) Easy to Invoke and Collect:
The firm should eliminate hoops or red tape in the way of accessing or collecting from the recovery.

SERVICE GUARANTEE:

Guarantee is an assurance of the fulfillment of a condition.
In a business context, a guarantee is a pledge or assurance that a product offered by a firm will perform as promised and, if not, and then some form of reparation will be undertaken by the firm.
For tangible products, a guarantee is often done in the form of a warranty.
Services are often not guaranteed. 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.

 Easy to collect.

BENEFITS OF SERVICE GUARANTEES:

 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 from customers.
 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 integrated into 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 confidence in the organization.


JAY - CUSTOMERS:

Jay customers are those who act in a thoughtless and abusive way, causing problems to the firm, employees and other customers. The word JAY comes from JAYWALKER used to describe people who cross streets at unauthorized places or in a dangerous manner. The word JAY is a slang term of “stupid”. To discourage abuse and opportunistic behavior, we need to deal with customer fraud.
More potential for mischief in service businesses, especially when many customers are present.
No organization wants an ongoing relationship with an abusive customer.
TYPES OF JAY- CUSTOMER:
1] The Thief
2] The Rule Breaker
3] The Belligerent
4] The Family Feuders
5] The Vandal
6] The Deadbeat

1] THE THIEF:
No intention of paying--sets out to steal or pay less.
This customer does not pay for services and is out to steal goods and services or tries to pay less than full price by methods like switching price tickets, contesting bill on baseless grounds etc. Riding free on public transportation, sneaking into movies theatres etc are EG of what such customers do.

2] THE RULE BREAKER:
Some customers break rules. There may rules laid down by the service provider to ensure safety or there may be rules imposed by govt. agencies etc. when such rules are broken they may create problem for the customers and the service.

3] THE BELLIGERENT:
We can see such customers in stores or at the airport or a hotel they could be shouting angrily or coolly mouthing off insult, threats and obscenities. They may such behavior when they are ignored or when service breaks down or service are clumsy or when staff is unhelpful or when orders are given incorrectly.

4] FAMILY FEUDERS:
People who get into arguments with other customers – often members of their own family.


5] THE VANDAL:
Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture.
 Bored and drunk young people are a common source of vandalism.
 Unhappy customers who feel mistreated by service providers take revenge.
 Prevention is the best cure.

6] DEAD BEAT:
Customers who fail to pay for the services they have received they are called deadbeat. There may be many reasons why customers end up by doing this. It is not that they do not want pay but they may not be in the position to pay. They are different from thieves.

DEALING WITH CUSTOMER FRAUD:
 If in doubt, believe the customer.
 Keep a database of how often customers invoke service guarantees or of payments made for service failure.
 Insights from research on guarantee cheating:
 Amount of a guarantee payout had no effect on customer cheating.
 Repeat-purchase intention reduced cheating intent.
 Customers are reluctant to cheat if service quality is high. (rather than just satisfactory)
 Managerial implications:
 Firms can benefit from offering 100 percent money-back guarantees.
 Guarantees should be offered to regular customers as part of membership program since regular customers are unlikely to cheat.
 Excellent service firms have less to worry about than average providers.

Wow sunanda, awesome work! You explained the whole concept very nicely and clearly. I am sure many people would give you thanks for this. I am also including a document which contain more details on complaint handling and service Recovery.
 

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