Flashcards
Service Failure
Cards in this deck (7)
- 1What is service failure?When service performance falls below customers expectations.
This can be due to technology, employees customer co-production, and other customers. - 2Why is service failure inherent?INTANGIBILITY: Expectations are subjective. We all have different expectations, this can, therefore, led to failure.
PERISHABILITY: When firms cannot match supply with demand.
VARIABILITY: Every service encounter is different. You may not receive what you expect.
INSEPARABILITY: the customer is present therefore mistakes cannot be fixed. - 3What is service recovery and why should firms recover service failure?A firms effort to correct a problem following servie failure to retain a customers goodwill. It is the true test of a firms commitment.
- Customer retention rate is 75% when services recover takes place.
- Customer loyalty is key to acquiring new customers is 2-5 times more expensive.
- Service recovery paradox - this may lead to delighted customers - 4How do customers respond to failure?PUBLIC ACTION: complaint to service (50%), complain to third party, take legal action
PRIVATE ACTION: defect provider, negative WOM
NO ACTION - 5ComplainingOnly 50% of customers complain
- too much effort
- they dont know the procedure
- they're embarrassed
- avoid confrontation
Customers should be complaining otherwise no changes to the service encounter can be made and positive moments of truth will continue to lack alongside satisfaction.
If a customer does not complain then service quality may be comprimiseed for other customers. This can be explained through gap one of the gaps model. It explains that a gap occurs between percieved and expected service when firms do not know what their customers want. - 6Switching (defect)People often switch provider because of:
- pricing
- inconvenience
- core service failure
-service encounter failure
- response to service failure
However, many of these are in control of the service provider. Core service failure, service encounter failure and response to service failure make up 55% of reasons for swtiching. - 7How can you recover a service?- Planning for failure.
- The Service Recovery Framework
- Customer Evaluation of recovery Framework
- Service Guarentees
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- Flashcards on Service Failure, created by Lucy Morton on 12/04/2018.
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- Lucy Morton
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