TO SERVICE RECOVERY & COMPLAINT HANDLING SUCCESS*

5 STEPS

WHAT DOES A FAIR RECOVERY PROCESS LOOK LIKE?

FOUR EMPLOYEE BEHAVIORS THAT MATTER

WHAT CUSTOMERS SAY WHEN ASKED

REASONS WE DON’T COMPLAIN

1You get two benefits from this action. First, you get an opportunity to recover from

the failure and save the customer. Second, a convenient process has a positive impact on customer satisfaction and loyalty beyond the remedy you offer.

Too Much Time & Effort

Assumes Responsibility

Customer Tells Their Story

Few Interactions

Miscellaneous Reasons

Took Other Punitive Action

Lack of Perceived Responsiveness

OrganizationInitiated Recovery

Individual Personality & Mood

21%

20%

17%16%

14%

12%

Follow-up Flexible Response

Quickly Resolved

....

HIRE AND TRAIN YOUR EMPLOYEES FOR EMPATHY, CARING, AND RESPECT2

3

4

CREATE SYSTEMS TO SUPPORT EFFECTIVE COMPLAINT HANDLING BY YOUR CUSTOMER-FACING EMPLOYEES

RESPOND (WELL) TO CUSTOMER PROBLEMS AND COMPLAINTS - BETTER YET, PROACTIVELY

MAKE IT CONVENIENT FOR CUSTOMERS TO COMPLAIN

Employees who see problems or hear complaints are not only your first line of defense; they are your first – and perhaps only – opportunity to shine! So use selection and training to ensure that your frontline employees have the requisite empathy, caring, and respect.

45% 42% 30% 23% 19% 10%

Formal Guidelines

Customer Input

Easy Complaining Staff Empowerment Staff Training

THE DIMENSIONS OF AN EFFECTIVE RECOVERY SYSTEM

....

Yes, this seems so obvious. Yet, research has shown that many

customers who complain never get a response. How infuriating is that! And

a bad recovery is worse than if the customer had never complained!

MEANS ON A 7-POINT SCALE REPURCHASE INTENTIONS

Customers who receive process improvement communications are more satisfied with the company – especially if they experienced a poor recovery

effort. And this benefit is true even if the customer didn’t complain!

Showing Respect and

Courtesy

Listening Carefully

Offering an Informed

Explanation

Displaying Regret

The best time and place to resolve a complaint is at the point of failure. And research shows that having the right systems in place are critical to giving employees the

confidence it takes to engage – rather than avoid – complaining customers.

Complaint with No

Recovery

Firm-initiated recovery

Satisfactory Recovery After

Complaint

No Complaint Dissatisfactory Recovery After

Complaint

......

......

5.0 4.5 3.7 2.7 2.3

Of course, not all future issues can be avoided. However, if a controllable action led to a failure, then let the customer know what steps are being taken to make things better.

5 FOLLOW UP WITH THE CUSTOMER TO OFFER ASSURANCE THAT THE PROBLEM WILL NOT HAPPEN IN THE FUTURE

15% of complainers got no response from the organization

WHAT SCIENCE SAYS

HIGH IMPORTANCE

LOW IMPORTANCE

MEDIUM IMPORTANCE

Voorhees, Clay M., Michael K. Brady, and David M. Horowitz (2006), “A Voice from the Silent Masses: An Exploratory and Comparative Analysis of Noncomplainers,” Journal of the Academy of Marketing Science, 34 (4), 513-527.Tax, Stephen S., Stephen W. Brown, and Murali Chandrashekaran (1998), “Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing,” Journal of Marketing, 62 (April), 60-76.Gelbrich, Katja and Holger Roschk (2011), “A Meta-Analysis of Organizational Complaint Handling and Customer Responses,” Journal of Service Research, 14 (1), 24-43.Smith, Jeffery S., Gavin L. Fox, and Edward Ramirez (2010), “An Integrated Perspective of Service Recovery: A Sociotechnical Systems Approach,” Journal of Service Research, 13 (4), 439-452.Van Vaerenbergh, Yves, Bart Larivière, and Iris Vermeir (2012), “The Impact of Process Recovery Communication on Customer Satisfaction, Repurchase Intentions, and Word-of-Mouth Intentions,” Journal of Service Research, 15 (3), 262-279.

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RESEARCH SOURCES

To learn more about how the world-class professors of LIFT PhD can help your company, visit our website.

WWW.LIFTPHD.COM

Service recovery & complaint handling refer to the actions taken by a firm in response to a product or service failure or problem.

THE POSITIVE IMPACT OF PROCESS IMPROVEMENT COMMUNICATIONS ON CUSTOMER SATISFACTION

When the Customer Experienced Good

Recovery

Small Impact

When the Customer Experienced Poor

Recovery

Big Impact

When the Customer Experienced the failure,

but Didn’t Complain

Big Impact

When the Customer Didn’t Experience

the Failure

No Impact