service marketing class ppt1

8/9/2019 service marketing Class Ppt1

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Compiled by PSkar For RIMS Rourkela

Customer satisfaction, failure

& RecoveryPravat S Kar




What do Customers Want

• Customer expectations are the customer-defined attributes of your product orservice you must meet or exceed to

achieve customer satisfaction.1• Customer Expectations are of two types -

Expressed and Implied.




Customer Satisfaction

• A satisfied customer is key to any

business.• Customer is the ultimate judge of

quality




One more India centric example

• The following table gives the overall CustomerSatisfaction Index (CSI) of AAI from 1995-96 ;

• table reveals that, Customer Satisfaction Level ofAAI airports is continuously improving. However,

AAI has to go a long way to achieve the over allcustomer satisfaction level of 85 to 90%.

75747373717066686355CSI(% )

04-05

03-04

02-03

01-02

00-01

99-00

98-99

97-98

96-97

95-96

YEAR

http://www.airportsindia.org.in/righttoinformation/Public_Customersatisfaction.jsp






Marriott was named the top hotel chain

• The American Customer Satisfaction Index measurescustomer satisfaction with the quality of products andservices in a variety of categories, including hotels,airlines, energy utilities, express delivery, U.S. PostalService, hospitals, fast food restaurants, cable and

satellite television, and telecommunications services.• Marriott hotels scored a 79 out of 100. The survey

compared four of the largest hotel chains and Marriotthotels were two points higher than their nearestcompetitor.

…… a customer satisfaction survey by the University ofMichigan's Ross School of Business.




Yahoo beats Google in customer satisfaction

• According to the latest news Yahoo tops thecustomer satisfaction ranking .The report hasbeen published by The University of Michigan’sAmerican Customer Satisfaction Index. It hasrated yahoo to be better than Google.

• The score of different search engines were likeGoogle getting 78, Ask gets 75, MSN gets 75

and AOL gets 67 and yahoo gets 79 out of 100.

http://seo4india.net/news/44/customer-satisfaction-level-is-higher-with-yahoo-than-google/

http://seo4india.net/news/44/customer-satisfaction-level-is-higher-with-

http://seo4india.net/news/44/customer-satisfaction-level-is-higher-with-




What constitutes Satisfaction?

Major attributes of customer satisfaction can besummarized as:

• Product Quality

• Product Packaging• Keeping delivery commitments

• Price

• Responsiveness and ability to resolve

complaints and reject reports• Overall communication, accessibility and attitude




What are the Tools?

Customer expectations can be identified using various methodssuch as

– Periodic Contract Reviews – Market research – Telephonic Interviews – Personal visits

– Warranty records – Informal discussions – Satisfaction Surveys

Depending upon the customer base and available resources, we canchoose a method that is most effective in measuring the customers'

perceptions.




Courses of Action Open toa Dissatisfied Customer

Service Encounteris Dissatisfactory

Service Encounteris Dissatisfactory

Take some formof public action

Take some formof public action

Take some formof private action

Take some formof private action

Take no actionTake no action

Complain to theservice firm

Complain to theservice firm

Complain to athird party

Complain to athird party

Take legal actionto seek redress

Take legal actionto seek redress

Defect (switchprovider)

Defect (switchprovider)

Negative word-of-mouth

Negative word-of-mouth

Any one or a combination ofthese responses is possible

Any one or a combination ofthese responses is possible




Proportion of Unhappy Customers Who BuyAgain Depending on the Complaint Process

9%

37%

19%

46%

54%

70%

82%

95%

0

10

20

30

4050

60

70

80

90

100

Customer did not

complain

Complaint was

not resolved

Complaint

was resolved

Complaint was

resolved quickly

Problem cost > $100 Problem cost $1 - 5

Source: TARP study




Causes Behind Service Switching

• High Price• Price Increases• Unfair Pricing

• Deceptive Pricing

Pricing• Location/Hours• Wait for Appointment• Wait for Service

Inconvenience

• Service Mistakes• Billing Errors• Service Catastrophe

Core Service Failure

• Uncaring

• Impolite• Unresponsive• Unknowledgeable

Service Encounter Failures

• Negative Response• No Response• Reluctant Response

Response to Service Failure

• Found Better ServiceCompetition

• Cheat• Hard Sell

• Unsafe• Conflict of Interest

Ethical Problems

• Customer Moved• Provider Closed

Involuntary Switching

Source: Sue Keaveney




You can either take action or you can hang back andhope for a miracle. M iracles are great, but they areso unpredictable.

Peter DruckerSome people make things happen, Some w atch

things happen, while others wonder whathappened.Successories

There are no secrets to success. It is the result of preparation, hard w ork, and learning from failure.

Colin Powell

You can have anything in life you want if you w ill justhelpenough other people get what they want.

Zig Ziglar

Words of wisdom




Service recovery

• Definition: Turning potentially negative situations

into positive ones.

• Resources:RELATE model of service recovery

Manager's Tips 'n' Tools Issue 5




How to Enable Effective Service Recovery

• Be proactive—on the spot, before customerscomplain

• Plan recovery procedures

• Teach recovery skills to relevant personnel• Empower personnel to use judgment and

skills to develop recovery solutions




Components of an Effective ServiceRecovery System

Learn from the

Recovery Experience

Learn from the

Recovery Experience

Resolve Complaints

Effectively

Resolve Complaints

Effectively

Identify Service

Complaints

Identify Service

Complaints

Effective Complaint

Handling

Effective Complaint

Handling

Conduct Root Cause

Analysis

Conduct Root Cause

Analysis

Develop Effective

System and Training in

Complaints Handling

Develop Effective

System and Training in

Complaints Handling

Conduct Research

Monitor Complaints

Develop “Complaintsas Opportunity”

Culture

Conduct Research

Monitor Complaints

Develop “Complaints

as Opportunity”

Culture

=+

Close the Loop via Feedback

Increased Satisfaction

and Loyalty

Increased Satisfaction

and LoyaltyDo the Job Right the

First Time

Do the Job Right the

First Time




Dimensions of Perceived Fairness in ServiceRecovery Process

ProceduralJustice

ProceduralJustice

InteractiveJustice

InteractiveJustice

OutcomeJustice

OutcomeJustice

Complaint Handling & ServiceRecovery Process

Complaint Handling & ServiceRecovery Process

Justice Dimensions of the Service Recovery Process

Customer Satisfaction with the

Service Recovery

Customer Satisfaction with the

Service RecoverySource: Tax and Brown




Strategies to ReduceCustomer Complaint Barriers

Make providing feedback a positive

experience:Ø Thank customers for their feedback.Ø Train the frontline not to hassle and make

customers feel comfortable.Ø Allow for anonymous feedback.

UnpleasantnessØ

Complaining customers fear thatthey may be treated rudely,Ø may have to hassle, orØ may feel embarrassed to complain.

Reassure customers that their feedback will

be taken seriously and will pay off by:Ø Having service recovery procedures in

place, and communicating this tocustomers.

Ø Featuring service improvements thatresulted from customer feedback.

Doubtful Pay Off

Ø Uncertain whether any action, andwhat action will be taken by thefirm to address the issue thecustomer is unhappy with.

Make feedback easy and convenient by:Ø Printing Customer Service Hotline

numbers, e-mail and postal addresses onall customer communications materials.

InconvenienceØ Difficult to find the right complaint

procedure.Ø Effort, e.g., writing a letter.

Strategies to Reduce These BarriersComplaint Barriers for DissatisfiedCustomers




Key Objectives of Effective CustomerFeedback Systems

• Assessment and benchmarking of servicequality and performance

• Customer-driven learning and improvements

• Creating a customer-oriented service culture




Building a Customer Feedback System

• Total market surveys

• Post-transaction surveys

• Ongoing customer surveys

• Customer advisory panels• Employee surveys/panels

• Focus groups

• Mystery shopping

• Complaint analysis

• Capture of service operating data




Strengths and Weakness of Key CustomerFeedback Collection Tools

Selection of a cocktail of effective customer feedbackcollection tools.

Potentialfor ServiceRecovery

Collection Tools

Multi-level MeasurementAction-

able

Represen-tative,

Reliable

FirstHand

Learning

CostEffective

CostEffectiveService

SatisfactionProcess

SatisfactionSpecific

Feedback

Total Market Survey (inclu.competitors)

Annual Survey on overallsatisfaction

Transactional Survey(process specific)

Service Feedback Cards(process specific)

Mystery Shopping(service testers)

Unsolicited Feedback Recd(Online feedback system)

Focus Group Discussions

Service ReviewsService Reviews

Meets Requirements: Fully Moderate Little/Not at all




Guidelines for EffectiveProblem Resolution

• Act fast

• Admit mistakes butdon’t be defensive

• Understand problem

from customer’sviewpoint

• Don’t argue

• Acknowledgecustomer’s feelings

vGive benefit of doubt

v Clarify steps to solveproblem

v Keep customers

informed of progressv Consider compensation

v Persevere to regaingoodwill




Service Guarantees

•fulfillment of a condition (Webster’s Dictionary )

• for products, guarantee often done in theform of a warranty

• services are often not guaranteed

–cannot return the service

–service experience is intangible –(so what do you guarantee?)




Characteristics of anEffective Service Guarantee

Unconditional• The guarantee should make its promise unconditionally -

no strings attached.

Meaningful• It should guarantee elements of the service that are

important to the customer.• The payout should cover fully the customer's

dissatisfaction.Easy to Understand and Communicate

• For customers - they need to understand what to expect.

• For employees - they need to understand what to do.

Easy to Invoke and Collect• There should not be a lot of hoops or red tape in the way

of accessing or collecting on the guarantee.Source : Christopher W.L. Hart, “The Power of Unconditional Guarantees,” Harvard Business Review , July-August, 1988, pp. 54-62.




Why a Good Guarantee Works

• forces company to focus on customers

• sets clear standards

• generates feedback

• forces company to understand why it failed

• builds “marketing muscle”




Types of Service Guarantees

• Single attribute-specific guarantee – one keyservice attribute is covered

• Multiattribute-specific guarantee – a fewimportant service attributes are covered

• Full-satisfaction guarantee – all service aspectscovered with no exceptions

• Combined guarantee – like the full-satisfaction,adding explicit minimum performance standards

on important attributes




Service Guarantees

• service guarantees work for companies who arealready customer-focused

• effective guarantees can be BIG deals - they putthe company at risk in the eyes of the customer

• customers should be involved in the design ofservice guarantees

• the guarantee should be so stunning that it comesas a surprise -- a WOW!! factor

• “it’s the icing on the cake, not the cake”

service marketing class ppt1

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