1. SERVICE RECOVERY MANAGEMENT
"Happy customers will drive your business. You must care for them, nurture them, and do whatever it takes to earn their undying loyalty. We all know that advertising can bring a customer through the doors to your business once. The challenge is to keep them coming back to you, to provide them with service that is so exceptional they wouldn't think of taking their business elsewhere. That includes solving their problems."
- Tschohl (2010)

2. SERVICE FAILURE
Service Failure is a state when a customer has not been served what he was promised and subsequent redressal also did not take place.
Hoffman and Bateson (1997) found service failure as “service performance that fails to meet customer expectations. “
Maxham (2001) defined service failure as
“any service-related mishaps or problems (real and/or perceived) that occur during a consumer’s experience with the firm”.

3. Reasons of Service Failures:
outcome (flaw in the core service)
process (flaw in the delivery of service).
organization procedures,
mistakes,
employee behaviour
functional/technical failures, and
actions/omissions of the organization that are against the sense of fair trade.

4. service delivery system failures gap between needs and requests
SERVICE FAILURES
service delivery system failures
gap between needs and requests
unprompted/unsolicited employee actions
problematic customers
Bitner, Booms, and Tetreault (1990) classified service failures into above four categories.

5. SERVICE RECOVERY
Service recovery has been perceived as a satisfactory solution to the problem of service failure.
Grönroos (1990) found service recovery to be the service provider’s response in case of service failure.
Service recovery is also described as doing the service right the second time.
Refunds, compensation, apologies and excuses are some of the service recovery methods. Along with these ways of recovery, rectifying the mistake and serving the customer again is also important.

6. SERVICE RECOVERY: Definitions
Bell and Ridge (1992) perceived service recovery as a well-accepted term used to denote service companies’ attempt to make up for the customers’ negative reaction to the service failures.
Kelley and Davis (1994) defined service recovery as the service provider’s response to a service failure.

7. Essentials of Service Recovery Management
Attribution
Apologizing
Compensation
Empowerment
Employee Behaviour
Recovery Action

8. Measuring Service Recovery Effectiveness
It takes into account six dimensions of service recovery:
Communication refers to the front line employees’ way of addressing the customer who wishes to lodge a complaint.
Empowerment refers to the level of authority in the hands of employees to take the decisions, use the resources and act independently.
Feedback refers to the process of providing information about a problem which has been registered by the customer.
Atonement refers to the act of apologizing for the inconvenience caused to the customer due to the service failure as well as providing the compensation.
Explanation refers to the act of clearly stating the reason behind the service failure.
Tangibles refer to the physical proofs of service like employees’ appearance, means of communication, service equipments, and the physical environment of service outlet.

9. Antecedents to Service Recovery Expectations
Customer commitment or loyalty: It is the degree to which a customer is committed to the organization, determines the level of his recovery expectations.
Service quality: Service recovery expectations tend to be higher in case of a higher perceived service quality.
Failure severity: Higher degree of severity of a service failure contributes to the increase in the level of service recovery expectations.
Service guarantee: A is expected to fulfil an expressed guarantee related to the procedures to be followed in case of a specific failure and a service guarantee may increase the recovery expectations as well.

10. Types of Service Recovery Management
Psychological: Psychological recovery efforts are considered as a recovery attempt through “showing concern” for customers’ needs. Empathizing and apologizing are widely accepted as main psychological techniques to be used in every instance of service recovery.
Tangible: Compensation is categorised for both, real and perceived damages, as tangible recovery efforts. The primary purpose remains to be providing fair compensation for the costs incurred and inconveniences caused due to service failure.

11. Advantages of Service Recovery Management
Effective service recovery management may offer several advantages to the company which are presented below:
Building Customer Loyalty
Increasing Customer Satisfaction
Greater Customer Retention
Developing higher repurchase intention
Positive Customer Perception
Generate Positive word of mouth
Increased profits

12. CRM: A COST BENEFIT ANALYSIS
CRM Benefits:
To The Organization: Increased Revenue and Reduced cost
To The Customer: Simplified buying process and friendly services leading to superior satisfaction.
CRM Cost:
To The Organization: Requires greater investment
To The Customer: Opportunity cost

13. Customer Value
Value creation is a strategic process to manage a product, service or a business unit's growth and competitive share. It is built on a core foundation of market research applying advanced techniques, called customer value analysis (CVA).

14. Customer Value from cost and benefit perspective

15. Customer Lifetime Value
Customer lifetime value (CLV) is the net present value of the total profits that a company could realize with the average new customer within a given customer segment during a given number of years.
It is the true value of a customer that can be considered as the most appropriate measurement of how much an organization would or should be willing to invest to acquire/ retain him.

16. Issues in Calculating CLV:
The precise calculation depends on the nature of the customer relationship program. It calls for accounting of following issues:
Lack of data
Lost customers
Newer company
Choosing a formula

17. Customer Profitability
Customer profitability (CP) is the profit the firm makes from serving a customer or customer group over a specified period of time, specifically the difference between the revenues earned from and the costs associated with the customer relationship in a specified period.

18. Customer Profitability
Analyzing the activities, costs, and profit associated with serving specific customers.
Customer makes frequent order changes.
Customer needs special attention.
Customer is difficult to please.
For various reasons, some customers are less profitable than others.

19. Customer classification based on CRM
Platinum Heavy, reliable users, not price-sensitive, try new products, loyal
Gold Large users who push for price breaks, shop around and not so loyal
Iron Low volume or intermittent users; cost to serve them is quite high
Lead Demanding, want special attention but don’t buy much and show no loyalty

20. Customer Classification Based on Customer Profitability
The first category customer receives high value from a firm's products and services and provides high value in the form of high margins, loyalty and retention.
The second category customer is the "lost cause" who do not get much value from the firm's products and services.
The third category of customers is the one who provides high value to the firm but does not get lots of value from the firm's services.
The fourth category of customers is one who gets superior value from a firm's products and services but provides little value, maybe because of their large size or intensity of competition.

21. Customer-centric Organizational Structure
A customer-centric organization has to fulfill the four essential steps:
Communal coordination
Serial coordination
Symbiotic coordination
Integral coordination

22. Customer Recall Management
Customer recall management is about winning back the customers who have either reduced their level of business transactions with the company or have stopped transacting at all.
It adopts a specific management process consisting of analysis, actions and controlling and offers marketers a profitable customer market.
In order to recall the lost customers, the marketers may adopt the following strategies:
Personalization Strategy
Differentiation Strategy
Customer Delight Approach 22

23. Customer Experience Management
As Bernard Schmidt of Columbia Business School, in his book "Customer Experience Management", explained that the customer experience could be looked at in terms of three key components —
1. the brand experience (encompasses the "look and feel" of logos and signage, packaging, and retail space. It also includes messages and imagery in advertising, collaterals, websites, and the design and experiential features of the product itself. It is mostly about static design elements.)

24. As Bernard Schmidt of Columbia Business School, in his book "Customer Experience Management", explained that the customer experience could be looked at in terms of three key components —
The brand experience
The customer interface
Innovation

25. Features of Indian Rural Markets:
Large and Scattered market
Agriculture based economy
Infrastructure related Issues
Regional Divide of development
Low standard of living
Diverse socio-economic backwardness

26. Issues Underdeveloped People and Underdeveloped Markets
Lack of Proper Physical Communication Facilities
Media for Rural Communication
Many Languages and Dialects
Market Segmentation
Dispersed Market
Low Per Capita Income
Low Levels of Literacy
Prevalence of spurious brands and seasonal demand
Different way of thinking

27. CUSTOMER RELATIONSHIP MANAGEMENT IN RURAL INDIA
Product Customization: Making the product suitable, usable, affordable, addressing the specific needs of the rural customers is a must.
Communication Customization: Creating awareness then, means utilizing targeted, unconventional media including ambient media.
Packaging Customization: Affordability is another important key in customization. Two of the most effective elements of a package designed for rural India include the size and visual communication.

28. Distribution Customization: Making the product available
Leveraging Rural Retailing: Innovative retail models which take into account the nuances of rural markets is the way forward.
Leveraging Technology: A strategic use of technology by the Marketers is to get closer to the customers.

29. Employee- Organization Relationship
The employees play a very vital role in the growth of the organization also as they are the ones who actually buy the service organsation's business concept and concretise it by providing their knowledge, skill, effort and time. They interact with all other stakeholders and satisfy the interest of each of the stakeholders

30. “If you want to be customer-focused, start by focusing on your employees. Give them the go-ahead to meet your customers' needs. That's the lesson we've learned during the past three years at Guest Quarters suite Hotels”
- John J. Weaver

31. Factors Affecting Employee Behavior towards Customers:
Overwork
Fatigue
Freedom
Interpersonal Issues
Mutual Trust

32. Essentials of Building Relationship with Employees through Employee Relationship Management:
Recruitment and Selection
Recruitment strategy from customer perspective
Finding persons of customer first orientation
Employee Motivation
Building Employee Customer Parity
Sharing Customer Profile
Directing to remain focused
Training & Development
Training with Customer first approach
Training to listen to the customers
Training to build empathy with customers 32

33. The pillars to build strong relationship of employees with the organization are as follows:
Finding right person of customer first orientation
Establishing employee-customer parity
Designing recruitment strategy from customer perspective
Sharing the customer profile with the employees
Training the employees with customer-first approach

34. Initiatives by the service companies for Employees Relations Management
Employee referrals in recruitment
Employee's participation in decision-making
Proper communication about the strategic views of the management
Making customer satisfaction as a parameter in employee's appraisal
Motivating them for innovating with customer service
Providing them amp le learning opportunity

35. Employee's Customer Orientation
To check the effectiveness of the employees in managing the customer relationship, by conducting regular surveys of their employees on several parameters. A questionnaire is as follows to check their understanding of the customers. It may provide an opportunity to the to assess customer orientation towards and correct if need be. 35

36. Questionnaire Employee's Customer Orientation:
Do you know who your customers are and how many customers do you have?
Do you listen effectively to all your customers?
Do you regularly make up an inventory of all the needs and expectations of your customers?
Are complaints replied within a day and solved within a day or two?
Do you make recommendations to customers about the products and services that best suit their needs?
Do you know what the costs are when you lose a customer?
Do you regularly organise meetings with customer groups to learn about their needs, wants, ideas and complaints?
Leadership's Approach Towards Customers:
As a manager, do you know how many complaints are received weekly/monthly?
Is there commitment at top management for customer orientation?
Does management set a good record with regard to customer- friendly behaviour?
Is management available at all times to the customer?
Does customer satisfaction also belong to the evaluation criteria of management?
Does top management also handle complaints of customers personally? 36

37. Service Recovery Paradox
The service recovery paradox is a supposed paradoxical effect where a product failure ultimately results in increased customer satisfaction, producing a level of satisfaction even greater than that expected with no product failure.

38. Service Recovery Paradox
The service recovery paradox is more likely to occur when:
the failure is not considered by the customer to be severe
the customer has not experienced prior failures with the firm
the cause of the failure is viewed as unstable by the customer
the customer perceives that the company had little control over the cause of the failure

39. Causes Behind Service Switching

40. Operational CRM and analytical CRM

41. FOR MORE ppt’s KEEP VISITING
THANK YOU
FOR MORE ppt’s KEEP VISITING
THETOPPERSWAY.COM