MARK270 Lecture Notes - Lecture 5: Conditionality, Service Recovery, Customer Satisfaction
Reliaility is ritial i servie ut…
• In all service contexts, service failure is inevitable.
• Service failure occurs when service performance that falls below a customers expectations in
such a way that leads to customer dissatisfaction.
• Service recovery refers to the actions taken by a firm in response to service failure.
The service recovery paradox:
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• A good reovery a tur agry, frustrated ustoers ito loyal oes… a, ifat, reate ore
goodwill than if things had gone smoothly in the first place.
• However;
• Only a small percent of customers complain
• Service recovery must be superlative
o Only with responsiveness, redress, and empathy/courtesy
o Only with tangible rewards
• Even though service recovery can improve satisfaction, it has not been found to
increase purchase intentions or perceptions of the brand.
• Service recovery is expensive.
• 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.
• Conditions must be just right in order for the recovery paradox to be present.
Types of complainers:
• Passives: least likely to take any action, say anything to the provider, spread negative WOM,
or complain to a third party: doubtful of the effectiveness of complaining.
• Voicers: actively complain to the provider, but no likely to spread negative WOM: believe in
the positive consequences of complaining - the service providers best friends.
• Irates: more likely to engage in negative WOM to friends and relatives and to switch
providers: average in complaints to provider: unlikely to complain to third parties: more angry,
less likely to give provider a second change.
• Activists: above average propensity to complain on all levels: more likely to complain to a third
party: feel most alientated from the marketplace compared to other groups: in extreme cases
can become "terrorists".
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Document Summary
In all service contexts, service failure is inevitable. Service failure occurs when service performance that falls below a customers expectations in such a way that leads to customer dissatisfaction. Service recovery refers to the actions taken by a firm in response to service failure. The service recovery paradox: a good re(cid:272)overy (cid:272)a(cid:374) tur(cid:374) a(cid:374)gry, frustrated (cid:272)usto(cid:373)ers i(cid:374)to loyal o(cid:374)es (cid:272)a(cid:374), i(cid:374)fa(cid:272)t, (cid:272)reate (cid:373)ore goodwill than if things had gone smoothly in the first place, however, only a small percent of customers complain. Service recovery must be superlative: only with responsiveness, redress, and empathy/courtesy, only with tangible rewards, even though service recovery can improve satisfaction, it has not been found to increase purchase intentions or perceptions of the brand. Treat customers fairly: outcome fairness, outcome (compensation) should match the customers level of dissatisfaction: equality with what other customers receive: choices, procedural fairness.
