Read the summary and the most important questions on Recovering and Learning from Service Failure

• 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