Dealing With Customer Complaints

The Customer is always right!  There are occasions when the customer is right, however there are also times when the customer is not entirely right or when their behavior in making a complaint is such that they need to be appropriately challenged so that the substantive issue is dealt with.

Tactics for Dealing with Customer Complaints

When dealing with customer complaints, mangers can use tactics based on a five-category scheme called conflict-handling modes: competing, compromising, collaborating, accommodating and avoiding.

Competing: (It has been decided that enough is enough, if the customer sues, you’ll meet them in court)

  • Repeat what you have said
  • Remind them that they can have their goods back
  • Warn the customer that you will not continue the conversation if they become abusive
  • Note what is said (possibly need to use in court)
  • Keep calm yourself and remain professional
  • Recognize when the conversation has gone on long enough and terminate it appropriately

Compromising: (The system has not performed to the stated standard and you have a desperate customer)

  • Apologise for the situation and reassure the customer that you’ll deal with it
  • Offer to deliver the goods by express courier at the company’s expense
  • Arrange to telephone the customer the next day to check delivery has been completed satisfactorily

Collaborating: (Your company isn’t at fault, the customer has chosen the wrong product, you need to find out how to progress to an agreeable solution)

  • Listen to the customer – what do they need from the product
  • Prepare to swap products if you can do
  • If no other product is appropriate as the customer how they want to proceed
  • Agree on what happens to the unwanted product – refund, exchange or let the customer keep it.
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Service Failure and Recovery

Service Failures

Even with the best  service organizations, failures can just happen – they may be due to the service not available when promised, it may be delivered late or too slowly (some times too fast??), the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. All these types of service failures bring about negative experiences. If left unfixed they can result in customers leaving, telling others about the negative experiences or even challenging through consumer courts. Research has shown that resolving the problems effectively has a strong impact on the customer satisfaction, loyalty, and bottom-line performance. Customers who experience service failures, but are ultimately satisfied based on recovery efforts by the firm, will be more loyal.

The Recovery Paradox.

It is suggested that customers who are dissatisfied, but experience a high level of excellent service recovery, may be more satisfied and more likely to repurchase than are those who are satisfied at the first place. For example, a hotel customer who arrives & finds there is no room available. In an effort to recover, the front-desk person immediately upgrades this guest to a better room at the same price. The customer is so thrilled with this compensation that he is extremely satisfied with this experience, is even more impressed with the hotel than he was never before, and vows to be loyal into future. The logical, but not very rational, conclusion is that  companies should plan to disappoint customers so they can recover &gain even greater loyalty from them as a result.… Read the rest

Service Encounters

From the customer’s point of view, the most vivid impression of service occurs in the service encounters or “Moment Of Truth,” when the customer interacts with the service firm. This is the foundation to “Satisfaction of Service Quality” – it is where the promises are kept or broken. The concept of service encounter was put forth by Richard Norman, taking the metaphor from Bull Fighting. Most services are results of social acts, which take place in direct contact between the customer and the service provider. At this stage the customer realizes the perceived service quality.

Every “Moment of Truth” is Important – according to Scandinavian Airlines, each one of their 10 million customers come in contact with 5 employees. Thus the airlines say there 50 million moments of truth – each one is managed well and “They prove they are the BEST”.

Encounter Cascade

The encounter cascade refers to a series of encounters right from the time a customer comes to take the service. The encounter cascade can be important as any encounter can be critical, as it determines customer satisfaction and loyalty. If it’s the first interaction of the customer then the initial interaction will be the first impression. So, these interactions have to be given importance, as they are critical and influences customer’s perception of the organization. For example, a customer calling for the repair service may switch to some other company if he is put on hold for a long time or even treated rudely. Even if the technical quality of that firm is superior, the firm may not get a chance to prove themselves in front of the customer.… Read the rest

Consumer Decision Process In Services Marketing

Knowledge of the Buyer

In buying decisions many times other people also influence the decision. In services these roles are played by many persons. In purchase of any service six distinct roles are played. They are;

  1. Initiator : The person who has a specific need and proposes to buy a service
  2. Influencer : The person or group of persons whom the decision maker refers to or who advice the decision maker
  3. Gate Keeper : The person or organization or promotional material, which act as filter on the range of services which enter the decision choice
  4. Decider : The person who makes the buying decision
  5. Buyer : The person makes the actual purchaser
  6. User : The actual user.
Consumer Decision Making Process in Services Marketing

The consumer’s decision to purchase or reject a product or service is the moment of final truth for the marketer. It signifies the marketing strategy has been wise, insightful and effective, whether it was poorly planned and missed the mark. Marketer are, therefore, interested in the consumer decision making process by which a consumer selects an alternative amongst the lot available. The decision not to buy is also an alternative.

A simple consumer decision making model, ties together the psychological, social and cultural concepts into an easily understood framework. The decision model has three distinct sets of variables: Input Variables, Process Variables, and Output Variables.

  1. Input Variables:Input variables are those variables which affect the decision making process and include commercial marketing efforts as well as non-commercial influences from the consumer’s socio-cultural environment.
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Service Quality

Definition of Service Quality

There are a number of different “definitions” as to what is meant by services quality. In its simplest form service quality is a product of the effort that every member of the organization invests in satisfying customers. In its broadest sense service quality is defined as superiority or excellence as perceived by the customer.

More especially service quality has been defined as:

  • The delivery of excellent or superior service relative to customer expectations.
  • Quality is behavior – an attitude – that says you will never settle for anything less community, your stockholders or colleagues with whom you work every day.
  • When we want to be effective – delivering good quality to the customer – we must produce services that meet “as much as possible” the needs of the consumer.
  • Quality is providing a better service than the customer expects.

One that is commonly us defines services quality as the extent to which a service meets customer’s needs or expectations. Today the most popular model of service quality in use is service quality gap model, perceived service quality as the difference between consumer expectations and their perceptions.

Customer Retention Through Quality Improvement

The focus of the modern marketers has shifted away from a one-time sale to making repeated sales to the same customer. Increasing attention is being paid to medium and long term perspectives, rather than just the short-term perspective. This has been a major revolution in thinking in the field of marketing. Customer retention usually pays dividends by way of:

  • Lifetime value of the customer.
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Service Organizations

An organization providing intangible services rather than tangible goods is termed as Service organization. In the standard industrial classification, service organizations include hotels, restaurants and other lodging and eating establishments, barber shops, beauty parlors and other personal services, repair services, motion picture, television and other amusement and recreational services, legal services and accounting, engineering, research/development, architecture and other professional organization. Service organizations also includes educational organizations, banks, insurance companies and other financial institutions. Also government agencies and most other non-profit organizations are service organizations.

Characteristics of Service Organizations
  • Quantity Measurement: It is easy to keep track of the quantity of tangible goods, both during the production process and when the goods are sold, but it is not easy to measure the quantity of many services. We can measure the number of patients that a physician treats in a day, for example, and even classify these visits by type of complaint, but this is by no means equivalent to measuring the amount of service that the physician provides to each of these patients. For many services the amount rendered can be measured only in a crude terms, if at all.
  • Absence of inventory: Goods can be held in inventory and this inventory is a buffer that dampens the impact on production activity of fluctuations in sales volume. Services cannot be stored. If the services available today are not sold, the revenue from these services is lost forever. Resources available for sale in many service organizations are essentially fixed. In the short run, a hotel can’t increase the number of rooms that it offers for rent and it does not reduce costs substantially by closing down some of its rooms.
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