Service failure arises when customers experience dissatisfaction because the service was not delivered as originally planned or expected. In effect, then, service failure arises from the customer’s perception of a service experience and not from what the organisation believes it has provided. A poor service or a service failure will result in dissatisfaction. This in turn will prompt a variety of responses which may include complaining, negative word-of-mouth and decisions not to repurchase. If it is impossible to avoid service failures and dissatisfaction, then it becomes increasingly important for organisations to understand how to manage such occurrences and minimize their adverse effects. There is a growing body of evidence to suggest that effective service recovery will generate a range of positive customer responses with complaint handling being seen as a key element in service recovery. Try to use a trusted trader or service provider to avoid this. Responding effectively to consumer complaints can have a significant impact on satisfaction, repurchase intentions and the spread of word-of-mouth.
Dealing with service failure and how best to handle complaints, it is essential to understand the way in which consumers react to service failure and how they respond to different approaches to service recovery.
Types of Service Delivery Failures
1. Unavailable service refers to services normally available that are lacking or absent such as a cancelled flight or a hotel that is overbooked, problems related to Internet services etc.
2. Unreasonably slow service relates to services or employees that customers perceive as being extraordinarily slow in fulfilling their function and might include delays in serving a meal in a restaurant or lengthy queues in banks, reservation, calls made to customer service, etc.
Other core service failures encompass all other aspects of core service failure; this category is deliberately broad to reflect the various core services offered by different industries (e.g., servicescape, invisible organization and systems, miscommunication, quality of service delivery, food service, cleanliness of the aircraft, and baggage handling).
3. Unprompted and Unsolicited Employee Actions- The third type of service failure arises from employee behaviours that are totally unexpected by the customer. These actions are not initiated by the customer, nor are they part of the service delivery system.
Subcategories of this group include-
(1) LEVEL OF ATTENTION – Negative levels of attention to customers pertain to employees who have poor attitudes, employees who ignore a customer, and employees who exhibit behaviour consistent with an indifferent attitude.
(2) UNUSUAL ACTIONS- The unusual behaviour subcategory includes employee actions such as rudeness, abusiveness, and inappropriate touching.
(3) CULTURAL NORMS- The cultural norms subcategory refers to actions that violate cultural norms such as equality, fairness, and honesty. Violations would include discriminatory behaviour, acts of dishonesty such as lying, stealing, and cheating, and other activities considered unfair by customers
(4) GESTALT- The gestalt subcategory refers to customer evaluations that are made holistically as in the case of a customer who evaluates a holiday as dissatisfying overall without identifying any specific incidents that cause this dissatisfaction.
(5) ADVERSE CONDITIONS- Finally, the adverse conditions subcategory covers employee actions under stressful conditions. If an employee takes effective control of any adverse situation, customers are impressed by the employee’s performance under those adverse conditions.
Understanding the type of service failure that has occurred is important in designing an appropriate recovery strategy and, perhaps more importantly, in developing future policies to limit the occurrences of service failures. For example, when faced with service delivery failures, an organisation may need to pay particular attention to service operations and design. Find trusted tradesmen across the United states. When failures arise from employee actions and behaviors, the appropriate approach might be to focus attention on the management of human resources.
The goal of service recovery is to identify customers with issues and then to address those issues to the customers’ satisfaction to promote customer retention. However, service recovery doesn’t just happen. It is a systematic business process that must be designed properly and implemented in an organization. Perhaps more importantly, the organizational culture must be supportive of idea that customers are important and their voice has value.
Effective service recovery strategies:
– Apology: A first person apology rather than a corporate apology, and one which also acknowledges that a failure has occurred.
– Urgent reinstatement: Speed of action coupled with a ‘gallant attempt’ to put things right even if it is not possible to correct the situation.
– Empathy: A sincere expression of feeling for the customer’s plight.
– Symbolic atonement: A form of compensation that might include not charging for the service or offering future services free or discounted.
– Follow-up: An after-recovery call to ascertain that the consumer is satisfied with the recovery process.
Acquisition is Good, Retention is Better
Companies still focus on acquisition and fail to develop and implement effective retention programs to retain customers and unlock their maximum value. Research also shows that acquiring a customer costs at least 5 times more than retaining one.
CUSTOMER RETENTION STRATEGIES:
- Redefining customer loyalty and retention in today’s marketplace.
- Understanding the challenges and why satisfied customers are not enough.
- Examining the “R” in CRM and looking at the consumer view.
- Understanding the nature of loyalty in order to drive behavioural change.
- Key considerations when planning your retention strategy.
- The importance of generating real understanding and consumer insight.
- Understanding the need for a holistic view.
- Directing your efforts to where they’ll have most impact.
- Ensuring that the needs of all stake holders are met.
10. Integrating customer retention into long term business planning.
11. Changing the business focus from share of market to share of wallet.
12. What you can expect a loyalty programme to achieve and what it cannot.
13. Establishing a Brand Idea that will project a consistent message.
14. Finding the right consistent tone of voice with which to address your customers.
15. Communicating the Brand Idea to your most important audience – your company employees.
16. Selecting the right media for your communications – and constantly testing.
17. Developing relevant propositions, offers and incentives.
18. Applying your message to other channels.
19. Up selling and cross-selling to provide added value throughout the customer lifecycle
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