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Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 1
American Customer Satisfaction Index:
Selected Industry Scores, 2002
Score 100
(Max = 100)
90 85
79 80 79
80 74 76
71 71 70
70 66 65 62
60
50
40
30
20
10
% Change 0 3.7% 1.3% 0.0% 1.3% 2.8% 0.0% 0.0% 8.2% 2.9% -2.6% 4.8% 3.3%
2002 vs 2001
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Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 2
Key Questions for Managers to Ask about
Customer Complaining Behavior
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 3
Courses of Action Open to a Dissatisfied
Customer (Figure 13.1)
Complain
Complainto tothe
the
service firm
service firm
Take
Takesome
someform Complain
form Complainto toaa
of public action third
of public action thirdparty
party
Take
Takelegal
legalaction
action
Service Take
Takesome
someform
ServiceEncounter
Encounter of private
form
action
to seek redress
to seek redress
isisDissatisfactory
Dissatisfactory of private action
Defect
Defect(switch
(switch
provider)
provider)
Take
Takeno
noaction
action
Negative
Negativeword-of-
word-of-
mouth
mouth
Any
Anyone
oneororaacombination
combinationof
of
these responses is possible
these responses is possible
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 4
Dimensions of Perceived Fairness in Service
Recovery Process (Figure 13.2)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 5
Proportion of Unhappy Customers Who Buy
Again Depending on the Complaint Process
100 95%
90 82%
80 70%
70
60 54%
46%
50
37%
40
30 19%
20 9%
10
0
Customer did not Complaint was Complaint Complaint was
complain not resolved was resolved resolved quickly
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 6
Impact of Effective Service Recovery
on Retention
No
Problem
84%
Problem,
but effectively 92%
resolved
Problem
46%
Unresolved
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Customer Retention
Source: IBM-Rochester study
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 7
Components of an Effective Service Recovery
System (Figure 13.3)
+
Do the Job Right the
Do the Job Right the
First Time
First Time
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 8
Strategies to Reduce Customer Complaint
Barriers (Table 13.1)
Complaint Barriers for Dissatisfied Strategies to Reduce These Barriers
Customers
Inconvenience Make feedback easy and convenient by:
Difficult to find the right complaint Printing Customer Service Hotline numbers,
procedure. e-mail and postal addresses on all customer
Effort, e.g., writing a letter. communications materials.
Doubtful Pay Off Reassure customers that their feedback will be
Uncertain whether any action, and taken seriously and will pay off by:
what action will be taken by the firm Having service recovery procedures in place,
to address the issue the customer is and communicating this to customers.
unhappy with. Featuring service improvements that resulted
from customer feedback.
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 9
How to Enable Effective Service Recovery
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 10
Guidelines for Effective
Problem Resolution (Management Memo 13.1)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 11
Service Guarantees Help Promote and Achieve
Service Loyalty
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 12
Types of Service Guarantees
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 13
The Hampton Inn 100% Satisfaction Guarantee
(Figure 13.4)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 14
Key Objectives of Effective Customer Feedback
Systems
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 15
Building a Customer Feedback System
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 16
Strengths and Weakness of Key Customer Feedback
Collection Tools (Table 13.3)
Service Reviews
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 17
Entry Points for Unsolicited Feedback
Slide ©2004 by Christopher Lovelock and Jochen Wirtz Services Marketing 5/E 13 - 18