Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 1 Chapter 11 Regaining Customer Confidence Through Customer Service and Service Recovery

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 2 Objectives 1.To provide an overview of customer service 2.To access customer service as a strategic function 3.To explore how to develop a customer service culture 4.To discuss why organizations should plan for service recovery 5.To present the steps to service recovery 6.To explore the hidden benefits of service recovery

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 3 Outline I.Introduction II.Customer Service III.Customer Service as a Strategic Function IV.Developing a Customer Service Culture V.The Need for Service Recovery VI.Steps to Service Recovery VII.Hidden Benefits of Service Recovery VIII.Summary and Conclusion

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 4 Customer Service Customer service refers to all customer- provider interactions other than proactive selling and the core product delivery offering that facilitate the organization’s relationship with its customers.

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 5 Customer Service as a Strategic Function Customer Service as an Information Resource Customer Service as an Input for Service Design Improvements Customer Service as an Opportunity to Enhance Customer Relationships

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 6 Developing a Customer Service Culture When the customer service function is elevated to a strategic level, the service organization signals its importance to all employees. –As a former CEO of American Express ( noted, "A dissatisfied customer is an opportunity.”

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 7 Developing a Customer Service Culture (cont’d) Service organizations and manufacturing organizations are realizing that customer service is a major corporate asset. One significant function of customer service is to enable the organization to recover from failures that caused customer dissatisfaction and complaints.

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 8 Developing a Customer Service Culture (cont’d)

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 9 The Need for Service Recovery Service recovery is the effort an organization expends to win back customer goodwill once it has been lost due to service failure.

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 10 The Need for Service Recovery (cont’d) The High Cost of Lost Customers –Losing customers is expensive When Is Service Recovery Needed? –Each point at which the customers encounter the service organization may influence their perception of the service’s excellence (the moment of truth) Other Means of Identifying Recovery Needs –Many ways to discern when service recovery efforts may be needed

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 11 The Need for Service Recovery (cont’d) A moment of truth is any contact point with a service organization that the customer uses to evaluate the service delivery.

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 12 Steps to Service Recovery A.Apology B.Urgent Reinstatement C.Empathy D.Symbolic Atonement E.Follow-Up

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 13 Hidden Benefits of Service Recovery There are several ways systematic service recovery programs benefit an organization: –The process can help improve the overall quality of service delivery as the service occurs –Keeping track of the sources of dissatisfaction that create a need for recovery can help the organization –Service recovery can reduce the incidence of bungled moments of truth if information regarding customers’ dissatisfaction is put to good use

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 14 Web Sites Stew Leonard’s ( p. 161 Angie’s List ( p. 161 Aer Arann ( p. 163 Sprint ( p. 163 American Express ( p. 163

Fisk/Grove/John-4e, Copyright © Cengage Learning. All rights reserved. 1 | 15 Web Sites (cont’d) Sewell Village Cadillac ( p. 166 The Consumerist ( p. 167 Consumer Reports ( p. 167 Consumers Union ( p. 167 Holiday Inn ( p. 168 Scandinavian Airlines (SAS) ( p. 168