SERVICE RECOVERY

Objectives for: ServiceRecovery

Illustrate the importance of recovery from service failures in building loyalty
Discuss the nature of consumer complaints and why people do and do not
complain

Provide evidence of what customers expect and the kind of responses they want
when they complain

Provide strategies for effective service recovery

Discuss service guarantees

UnhappyCustomers RepurchaseIntentions

Unhappy Customers WhoDontComplain

9%
37%

Unhappy Customers WhoDoComplain

19%
ComplaintsNotResolved

46%

54%
Complaints Resolved

70%

82%

Complaints Resolved Quickly

95%

Percent of Customers Who Will Buy Again

Minorcomplaints($1-$5 losses)

Major complaints (over $100 losses)

Source:Adapted from data reported by the Technical Assistance Research Program.

Customer Response Following Service Failure

Service Failure

Do Nothing

Take Action

Switch Providers

Complain to Provider

Complain to Family & Friends

Switch Providers

Complain to Third Party

Stay with Provider

Stay with Provider

ServiceRecovery Strategies
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Learn from

Lost Custom

Service Recovery

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CausesBehind Service Switching

Service Switching Behavior

Inconvenience

Pricing

High Price
Price Increases
Unfair Pricing
Deceptive Pricing

Service Encounter

Response to Service
Failure

Negative Response
No Response
Reluctant Response

Failures

Core Service Failure

Location/Hours
Wait for Appointment
Wait for Service

Uncaring
Impolite
Unresponsive
Unknowledgeable

Service Mistakes
Billing Errors
Service Catastrophe

Ethical Problems

Cheat
Hard Sell
Unsafe
Conflict of Interest

Involuntary Switching

Customer Moved
Provider Closed

Competition

Found Better Service