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Chapter 11

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  1. Chapter 11 Regaining Customer Confidence Through Customer Service and Service Recovery

  2. Objectives • To provide an overview of customer service • To access customer service as a strategic function • To explore how to develop a customer service culture • To discuss why organizations should plan for service recovery • To present the steps to service recovery • To explore the hidden benefits of service recovery

  3. Outline • Introduction • Customer Service • Customer Service as a Strategic Function • Developing a Customer Service Culture • The Need for Service Recovery • Steps to Service Recovery • Hidden Benefits of Service Recovery • Summary and Conclusion

  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.

  5. Customer Service asa 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

  6. Developing a CustomerService 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 (http://www.americanexpress.com) noted, "A dissatisfied customer is an opportunity.”

  7. Developing a CustomerService 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.

  8. Developing a CustomerService Culture (cont’d)

  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.

  10. The Need forService 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

  11. The Need forService Recovery (cont’d) • A moment of truth is any contact point with a service organization that the customer uses to evaluate the service delivery.

  12. Steps to Service Recovery • Apology • Urgent Reinstatement • Empathy • Symbolic Atonement • Follow-Up

  13. Hidden Benefits ofService 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

  14. Web Sites • Stew Leonard’s (http://www.stew-leonards.com), p. 161 • Angie’s List (http://www.angieslist.com), p. 161 • Aer Arann (http://www.aerarann.com), p. 163 • Sprint (http://www.sprint.com), p. 163 • American Express (http://www.americanexpress.com), p. 163

  15. Web Sites (cont’d) • Sewell Village Cadillac (http://www.sewell.com), p. 166 • The Consumerist (http://www.consumerist.com), p. 167 • Consumer Reports (http://www.consumerreports.com), p. 167 • Consumers Union (http://www.consumersunion.com), p. 167 • Holiday Inn (http://www.ichotelsgroup.com), p. 168 • Scandinavian Airlines (SAS) (http://www.scandinavian.net), p. 168