When things go wrong...

14th of December 2016
When things go wrong...

Nico Lemmens in the Netherlands writes about a service-oriented approach to handling complaints.

We continue our exploration of Grönroos’s theories on service management and marketing. In the June issue of ECJ we argued that quick and excellent recovery performance in case of problems is in many cases the most important driver for generating positive service quality perception. Grönroos distinguishes service recovery from complaint handling.

Frequently it seems as if the objective of complaint handling is to make sure that the firm does not have to compensate the customer unless absolutely necessary. This kind of complaint handling is inherently non-service-oriented. Service recovery is a service-oriented approach to managing the same situations that, in an administrative way, are managed by complaint handling routines.

Traditional complaint handling aims at internal efficiency, keeping costs as low as possible, whereas for service recovery external efficiency (good customer-perceived quality) is the guideline. The objective of service recovery is to satisfy customers in spite of a service failure as well as to maintain and possibly improve the longterm relationship quality, to retain customers and long-term profitable business rather than shortterm cost savings.

Here are some of Grönroos’s guidelines for service recovery.

It is the organisation’s responsibility to spot service failures and other types of mistakes or quality problems. Customers should only have to notify the firm about the situation or make a complaint if the firm has been unable to do so. If formal complaints are required, it should be made as easy as possible for the customer to complain. The complaints procedure should be made as unproblematic and free from bureaucracy as possible. Most customers who are unsatisfied do not bother to complain; they just take away their business.

The organisation should take the initiative to inform the customer about the failure or mistake and, in cases where immediate corrections cannot be made, keep the customer up-to-date about the progress of rectifying the mistake. The organisation should actively take measures to correct failures and mistakes, and not wait until the customer demands action. The customer should be compensated immediately and, in cases where immediate compensation cannot be given, no unnecessary delays should be allowed.

A lost customer, if profitable, has a greater negative effect than an overcompensated, satisfied customer who continues his relationship with the firm and probably also contributes to favourable word-of-mouth communication.

If for some reason a customer cannot be compensated, a swift and service-oriented recovery process may still make the customer feel satisfied. However, this requires that customers perceive the procedures and interactions as having been fair. Emotional reactions such as anxiety and frustration, which customers often feel because of a service failure, must also be managed.

Emotions should probably be attended first. Apologising is important, but it is not enough. Customers should also be compensated for losses they feel to have suffered. The development of a systematic service recovery system should be a crucial part of any service quality management system. Right the first time is OK. Right the second time is often better. At least in service industries.


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