1. Service strategy Ps this figure is related to the lecture on 14.5. 1
8= individual service,
labour intensive, a number of customer contacts
1="service factory"
standardized service,
few customer contacts and service employees 1

2. Part two: Managing Service Quality
Service recovery and complaint management 2

3. Service recovery
“Service recovery is a process that identifies service failures, effectively resolves customer problem, classifies their root causes, and yields data that can be integrated with other measures of performance to assess and improve the service system.”
Service recovery
Customer recovery to stop negative word of mouth and to avoid customer switching behavior
Apology
Explanation
Gift coupon
Reduction of price
Free gifts
Substitutes
Compensations
Process recovery
Companies have to analyse the reasons for a service failure and recover the process to prevent the same service failure to happen again
Employee recovery
Employees as well as customers need to be recovered from a service failure to go on with the service provision

4. Service recovery process
Calculate cost of failures and mistakes
Solicit complaints
Identify recovery needs
Recover quickly
Train employees
Empower and enable customer contact employee
Keep the customer informed
Learn from mistakes

5. Service recovery Service recovery paradox
A customer is more satisfied after a successful service recovery (a negative service encounter and then a successful service recovery) than after a positive service encounter (single positive encounter)
High degree dissatisfaction
Low degree dissatisfaction
An unsuccessful service recovery leads to a double deviation
Fist the customer perceives bad service quality and then he perceives bad service recovery
An unsuccessful service recovery may lead the customer to go on voicing
Un unsuccesssful double service recovery leads to a triple deviation

6. Figure: A complex service recovery process (Edvardsson et al. 2008)
The value co-creation resulting in an unfavorable service experience (deviation) resulting in a complaint to the company
Customer
Service company
Customer
Front-line
employee
An unsuccessful service recovery
Customer
Double deviation occurs
Front-line employee
or superior actor
An additional complaint to the company
Customer
Successful double
Service recovery
Unsuccessful double
Service recovery
Customer
Superior actor
Customer
Reinforced unfavorable
service expereince
Service company
Triple deviation
occurs
Customer

7. Complaint management
Studies on customer complaining and non complaining action
Customer non complaining
Majority of the customers do not complain after perceived bad quality, why not?
It is no use
It is easy to switch the company in a case of dissatisfaction
It causes too much troble
Customers do not know how or to whom to complain
Customers do not want to be categorized as “complaining customers”
Complaining may lead to negative incidents in an ongoing service encounter

8. Customers complaining
Some customers complain, why they do that?
The service encounter has a specific meaning for the customer (emotionally, finacially etc.)
Customer wants to be recovered
Personal attitude
Perceived control over the service provider
etc

9. Company complaint management
Company data:
Company characteristic
Quality of complaint handling
Customer data:
Customer characteristics
Problem –related Customer Charasteristic
(severity of problem, importance of product,
attribution of responsiility to company)
Relationship-related customer characteristic
(intensity of business relationship)
Psychographic customer characteristics
(propensity to complain, appreciation of quality)
Sociodemografic customer characteristics
(age, educational level, gender)
Customer evaluation
Perceived fairness of
complaint handling

10. Thank you for your attention looking forward for the next lecture
Your reading for the next lecture:
Bitner, M.J. Et al. (2008) Service Blueprinting: A practical technique for service innovations,California Management Review, vol.50, no. 3.