Designing the Service

Process and Service

Recovery

Jeffrey T. De Vera
Instructor
CBEA-MMSU
GOOD MORNING!

I’M JEF
My Topic

 SERVICE  SERVICE

PROCESS RECOVERY
SERVICE PROCESS
The Service Process
Do we need to know how physical goods are
manufactured?
No! It is the concern of people in the factory…
but in service?
Yes! Because it involves customers in the
production of service products….
 As service providers
we do need to understand the nature of the
processes through which services are
created and delivered
What is a process?

It is a particular method of operation or

a series of actions, typically involving
multiple steps that often need
to take place in a defined
sequence.
 The choice of processes may also be
 shaped by customer
 expectations and
 preferences.
 Key Elements
 Service concept, which focuses on satisfying
customer needs.
 Service content, which defines what is

included in the service itself.

 Service style, which describes how the service

will be delivered.
 
 In defining the service concept, the manager
must also be attuned to the skills,
qualifications, and interest
 of the workforce.
For example:
 A nurse practitioners can perform physical
examinations and treat medical problems that in
the past could be done only by a physician. Using
a nurse practitioners to deliver care achieves two
workforce goals: providing good care for patients
and freeing physicians to concentrate on more
complicated cases that may be more interesting
to them and that use their skills set more
efficiently. Using nurse practitioners to provide
care formerly provided only by physicians may
also reduce the total cost providing care.
 The Service Concept

The service concept is a detailed description of

the customers’ requirements and how they
are to be satisfied.
It focuses on understanding the needs of the
target customers, and the how involves
understanding the organization’s
competitive priorities as well
as the specifics that go
along with the service.
Four Areas
 The service operations – the manner in which
the service is delivered.
 The service experience – the customer’s
direct experience of the service.
 The service outcome – the benefit and results
for the customer receiving the service.
 The service value – the benefit that customers
perceive to be the result of the service in
comparison to the cost of that service.
 The Service Content
 The “what” of service design relates to the
actual service content
 Service content includes:
 the steps that are followed to service

customers,
 the points in the process at which workers

might need to make decisions, and

 the points in the process at which customers

might need to wait.

 These steps can be shown effectively as a
process flow diagram, which is sometimes
referred to as service blueprint.
 Service Process Flows
 A process flow diagram is a very effective tool
for depicting the steps in the process.
 Service Blueprint
 When used specifically for designing service
operations, process flow diagrams are often
referred to as service blueprint.
SERVICE RECOVERY
CONSUMER COMPLAINING
BEHAVIOR
 not always satisfied
  Complain….

 Service failure…

 Service provider failed to provide the

adequate service of the customer…
 Types

 Aggressive complainers
 Passive complainers
 Constructive complainers
Customer Response Options
to Service Failures
 Complain
Complain totothe
the
service firm
service firm

Take
Takesome
some
form Complain
Complainto toaa
form of Public
of Public third
Action
Action thirdparty
party

Take
Takelegal
legal
Service Take
Takesome
some
Service action
action to
toseek
seek
Encounter form of
form of
Encounterisis Private
redress
redress
Dissatisfactory
Dissatisfactory PrivateAction
Action
Defect
Defect(switch
(switch
provider)
provider)
Take
TakeNo
No
Action
Action
Negative
Negativeword-
word-
of-mouth
of-mouth

Any
Anyone
oneor
oraacombination
combination
of
of these responsesisis
these responses
possible
possible
Understanding Customer
Responses to Service Failure
 Why do customers complain?
 What proportion of unhappy customers

complain?
 Why don’t unhappy customers complain?
 Who is most likely to complain?
 Where do customers complain?
 What do customers expect once they have

made a complaint?
Why do customers complain?
 Obtain restitution or compensation
 Vent their anger
 Help improve the service
 For altruistic reason
What proportion of unhappy
customers complain?

 only 5 to10 percent of customers who

 have been unhappy with a service
 actually complain
Why don’t unhappy customers
complain?
◦ Customers may not want to take the time to write
letter, send e-mail, fill out a form, or make a
phone call, particularly if they don’t see the
service as being important enough to be worth
the effort.
◦ Customers see the payoff as uncertain and
believe that no one will care about their problem
or be willing to resolve it.
 ◦ Customers simply don’t know where to go or
what to do.
◦ Customers feel that complaining is unpleasant.
◦ Customers may be afraid of confrontation,
especially if the complaint involves someone
whom the customer knows and may have to deal
with again.
Who is most likely to complain?
 people in higher socioeconomic
circumstances
 better education,
 higher income, and
 greater social involvement
Where do customers complain?
 made at the place where the service was
received
What do customers expect once
they have made a complaint?
 Complaint
Complaint Handling
Handling and
and Service
Service
Recovery
Recovery Process
Process

Justice Dimensions of the Service Recovery

Process

Procedural
Procedural Interactive
Interactive Outcome
Outcome
Justice
Justice Justice
Justice Justice
Justice

Customer
Customer Satisfaction
Satisfaction with
with
Service
Service Recovery
Recovery
Source: Tax and Brown
Importance of Service
Recovery
 Plays a crucial role in achieving customer
satisfaction
 Tests a firm’s commitment to satisfaction and

service quality
◦ Employee training and motivation is highly
important
 Impacts customer loyalty and future
profitability
◦ Complaint handling should be seen as a profit
center, not a cost center
The Service Recovery
Paradox
 Customers who experience a service failure
that is satisfactorily resolved more likely to
make future purchases than customers
without problems (Note: not all research
supports this paradox)

 If second service failure occurs, the paradox

disappears—customers’ expectations have
been raised and they become disillusioned
 Severity and “recoverability” of failure (e.g.,
lost medical record) may limit firm’s ability to
delight customer with recovery efforts

 Best strategy: Do it right the first time

Principles of Effective Service
Recovery Systems
 Increased
Do the job right the
first time + Effective Complaint
Handling = Satisfaction and
Loyalty

Conduct research
Monitor complaints
Identify Service
Complaints Develop “Complaints as
opportunity” culture

Resolve Complaints Develop effective system

Effectively and training in
complaints handling

Learn from the

Conduct root cause analysis
Recovery Experience

Source: For full source information, see Services

Marketing textbook, page 386.
Close the loop via feedback
 Strategies to Reduce Customer
Complaint Barriers
Complaint Barriers for
Dissatisfied Customers
Inconvenience
 Hard to find right complaint
procedure
 Effort involved in complaining
Doubtful Pay Off
 Uncertain if action will be taken
by firm to address problem
Unpleasantness
 Fear of being treated rudely
 Hassle, embarrassment
Strategies to Reduce These Barriers
 Put customer service hotline
numbers, e-mail and postal
addresses on all customer
communications materials
 Have service recovery procedures in
place, communicate this to
customers
 Feature service improvements that
resulted from customer feedback
 Thank customers for their feedback
 Train frontline employees
 Allow for anonymous feedback
How to Enable
Effective Service Recovery
 Be proactive—on the spot, before
 customers complain
 Plan recovery procedures
 Teach recovery skills to
 relevant personnel
 Empower personnel to use judgment and

skills to develop recovery solutions

How Generous
Should Compensation Be?
 Rules of thumb for managers to consider:
◦ What is positioning of our firm?
◦ How severe was the service failure?
◦ Who is the affected customer?
THE END
 THANK YOU! AND
GOOD MORNING!

contact me at:
MMSU-CBEA
+639192035661
jefdevera99@yahoo.
com