Managing Customer Complaints and Service Recovery Question Answers

Q: Describe the differences in the behavior of typical consumers from South-East Asia and Western countries when it comes to (a) complaining; (b) evaluating service-recovery efforts of the firm.

Answer:

(A) Managing customer complaints – complaint behavior increases when the problem is perceived as being a matter under the control of the firm, and what we learn from the fundamental attribution error (below) is that Western consumers tend to internalize explanations for service failure and therefore are more likely to complain.

(B) Evaluating service recovery efforts – to illustrate, an example from a hotel/resort setting found that South-East Asian consumers were more satisfied with recovery efforts than Australians when:

  1. they were kept regularly informed of what was being done to solve the problem
  2. the recovery was initiated by the firm resulting in higher interactional justice
  3. an apology came from a person of senior status, and;
  4. an explanation of the cause of the service failure is given.
Q: Demonstrate your understanding of the fundamental attribution error.

Answer:  Westerners tend to attribute the blame for a service failure to internal, dispositional behavior, (i.e. under the control of the firm), whereas Asians tend to attribute blame to situational factors that are out of the control of the firm.

Q: Demonstrate your understanding of how the three dimensions of justice affects consumers’ overall satisfaction with service-recovery efforts of the firm following a service failure.

Answer: Justice (or fairness) has a large impact on how customers evaluate a firm’s recovery efforts.  Consumers evaluate the speed and convenience of the process, flexibility, the level of customer control and how the firm follows up after the complaint in judging procedural justice.

Interactional justice refers to the behavior of the firm’s representatives during complaint resolution. Outcome or distributive justice concerns the compensation a customer receives associated with the service failure.  Customers expect to be compensated for the inconvenience of the failure, and for having to go through the recovery process.

Q: What implications do the SOCAP/TARP study results have for managers?

Implications for managers:

  • Make it easier for customers to complain
  • Encourage genuine complaints
  • Dedicate someone to take responsibility for ensuring the complaint is followed up and resolved
  • Set standards for compliant resolution
  • Avoid ping-ponging at all costs
  • Conduct root cause analysis to establish the cause of failures
  • Train staff in service recovery
Q: Explain how ‘power’ and continuous contact impact on the likelihood of complaining.  What are the implications for service organizations who wish to improve overall customer satisfaction levels?

A:  Goodwin and Verhage’s study explains this phenomenon.  Customers that perceive they have low power (the perception of their own ability to influence or control the transaction) are less likely to voice complaints.  Such encounters may resemble an employer/employee relationship and customers (like employees) may need support to express their views.

For services that require frequent and face-to-face interaction, customers are less likely to complain because they must criticize someone they have previously interacted with (and will interact with) and with whom they have developed social bonds.  Hairdressers and doctors fall into this category.

Implications for service firms with continuous contact and where customers perceive low power should set up strategies that facilitate and encourage legitimate complaints.  These firms can learn from complaints and help to create and keep loyal customers.

Q: Read the complaint letter earlier in this chapter regarding the Shinawatra Telewiz mobile phone.  What lessons can we learn concerning the service-recovery process and customer satisfaction from this case?

A:  Probably the biggest lesson to learn from this complaint letter is that sometimes companies create complaint situations by over-promising and under-delivering.  Promoted product features that are inaccurate, service guarantees that have too many conditions and staff with little product knowledge add to the chances of customer dissatisfaction.

Other lessons that can be learned:
  • Ensure procedural, interaction and outcome justice (fairness)
  • Accept responsibility
  • Respond promptly
  • Thai customers will appreciate regular information, an apology from someone of senior status, an explanation of the cause and for the company to initiate recovery. Refer to the points on pages136 and 137 for more details.

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