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Chapter 14

Service Failures
and

Recovery Strategies
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

Figure 14.1 Types of Service Failures


Unavailable
Slow Group 1 Nature of failure? Other failures Group 1A Group 1B Group 1C

Yes

Special needs Total sample Is there a service delivery system failure? Nature of requests/ need? Customer preference Customer error Disruptive others

Group 2A Group 2B Group 2C Group 2D

Yes

Group 2

No

Is there an implicit/ explicit request for accomodation


Yes

No

Is there an Unpromoted / unsolicited action by employee?

Group 3

Nature of employee action?

Level of attention Unusual action Cultural norms

Group 3A Group 3B Group 3C Group 3D Group 3E

No

Gestalt Adverse conditions Source: Mary Jo Bitner, Bernard H. Booms, and Mary Stanfield Tetreault, The Service Encounter: Diagnosing Favorable and Unfavorable Incidents, Journal of Marketing (January 1990, pp. 71-84.
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPES OF SERVICE FAILURES

Group 1 Failures
Core

service failures

slow service unavailable service other core service failures

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPES OF SERVICE FAILURES

Group 2 Failures
Responses

to implicit/explicit requests

special needs customer preferences customer error disruptive others

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPES OF SERVICE FAILURES

Group 3 Failures
Unprompted/Unsolicited

employee actions

level of attention unusual action cultural norms gestalt adverse conditions

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPES OF COMPLAINTS

Instrumental
expressed

for the purpose of altering an undesirable state of affairs without the expectation that an undesirable state will be altered

Noninstrumental
expressed

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPES OF COMPLAINTS

Ostensive
outer-directed

complaints complaints

Reflexive
Inner-directed

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

WHY DONT CUSTOMERS COMPLAIN?


Dont know who to complain to Dont 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

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

COMPLAINING OUTCOMES

Retaliation
High

=> tells lots of people and attempts to physically damage the store => tells a few people and created minor inconveniences

Medium

Low

=> does not retaliate at all

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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 the complaint is about the quality of service as opposed to an employees personality
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE RECOVERY

Service recovery paradox


customers

are likely to evaluate a firm higher if a mistake is made and corrected than had the service been delivered correctly the first time.

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE RECOVERY EVALUATION

Perceived justice needs--based on equity theory which weighs outcomes versus inputs
distributive

justice

outcomes

procedural

justice

process

interactional

justice

the human content of the recovery process

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPICAL RECOVERY STRATEGIES (distributive justice outcomes)

Compensatory strategies
gratis discounts upgrades free

ancillary service

Refunds

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

TYPICAL RECOVERY STRATEGIES (distributive justice outcomes)

Corrections Replacement strategies Apology Disregard

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

RECOVERY TACTICS

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 dont follow through

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES & RECOVERY STRATEGIES: THE RESTAURANT INDUSTRY

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY

Group 1 failure categories (44.4%)


Product

defects (20.9%)

food was described as cold, soggy, raw, burnt, spoiled, or containing inanimate objects such as hair, glass, bandages, bag ties, and cardboard.

Slow/unavailable

service (17.9%)

waiting excessively, not being able to find assistance

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY


Facility

problems (3.2%)

cleanliness issues such as bad smells, dirty utensils, and animate objects (e.g., insects) found on the table or in the food

Unclear

policies (1.6%)

policies that were perceived as unfair by the customer, such as coupon redemption, or forms of payment

Out-of-stock

conditions (.8%)

inadequate supply of menu items

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY Group 2 failure categories (18.4%)


food

not cooked to order (15.0%)

requested food be prepared in a particular manner and restaurant failed to meet request

seating

problems (3.4%)

seating nonsmokers in smoking section and vice versa lost or disregarded reservations requests for special tables that were denied seating among unruly and disruptive customers
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY


Group

3 failure categories (37.2%)


employee behavior (15.2%)

inappropriate

rudeness, inappropriate verbal exchanges, and poor attitudes

wrong

Orders (12.6%)

delivery of the incorrect food item, either to the table, or in the case of fast food, in packaging so that the mistake was not discovered until the customer had left the premises

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY


Group
lost

3 failure categories (37.2%)

orders (7.5%)

situations in which the customers order was lost and never fulfilled

mischarged

(1.9%)

being charged for items that were never sent, being charged incorrect prices for items that were ordered, and providing incorrect change

COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

SERVICE FAILURES: THE RESTAURANT INDUSTRY Recovery Strategies (frequency, retention)


Replacement

(33.4%, 80.2%) Free Food (23.5%, 89.0%) Nothing (21.3%, 51.3%) Apology (7.8%, 71.4%) Correction (5.7%, 80.0%) Discount (4.3%, 87.5%) Manager Intervention (2.7%, 88.8%) Coupon (1.3%, 80.0)%
COPYRIGHT 2002 Thomson Learning, Inc. Thomson Learning is a trademark used herein under license. ALL RIGHTS RESERVED.

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