Summary: Recovering And Learning From Service Failure

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  • 1 Introduction

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  • Which effects are vital to handle to maintain customer satisfaction and loyalty?

    Problems and complaints that are bound to occur over the lifetime of customer relationships.
  • Where is the ability to deal effectively with customer problems also closely related to?

    To employee satisfaction and loyalty.
  • Which 3 implications does this approach include?

    • A successful recovery strategy on customer loyalty
    • Employee satisfaction
    • Firm profitability
  • 2 Stage 1: Identifying Service Failures

  • What is the greatest barrier to effective service recovery and organizational learning?

    The fact that only 5 percent to 10 percent of dissatisfied customers choose to complain following a service failure. Instead, most silently switch providers or attempt to get even with the firm by making negative comments to others.
  • What are the four key reasons that customers do not complain?

    1. Customers believe that the organization will not be responsive;
    2. They do not wish to confront the individual responsible for the failure;
    3. They are uncertain about their rights and the firm's obligations;
    4. They are concerned about the high cost in time and effort of complaining.
  • 2.1 Best Practices in Identifying Failures

  • Which approaches are effective in identifying service failures?

    • Setting performance standards
    • Communicating the importance of service recovery
    • Training customers in how to complain
    • Using technological support offered through customer call centers and the Internet.
  • 2.1.1 Setting Performance Standards

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  • What is a way to overcome the problem of unclear expectations?

    To implement service standards, which are often communicated through service guarantees.
  • 2.1.2 Communicating the Importance of Service Recovery

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  • How do companies signal to employees the importance of taking responsibility for service failures and resolving problems?

    Through their values.
  • 2.1.4 Using Technological Support

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  • Why do call centers offer central advantages over written correspondence?

    • In providing customers with convenient, low-cost access to service recovery.
    • Customers may feel more comfortable complaining over the phone than face-to-face.
  • 3 Stage 2: Resolving Customer Problems

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  • By assessing which 3 aspects of service recovery do customers form perceptions of fairness?

    1. Outcomes
    2. Procedural features
    3. Interactional treatment
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