Service recovery & service guarantee

Paper name: Service operations management ( OM- 3506)

Submitted To: Dr. Nigamananda Biswas Assistant professor

20-04-2012

Submitted By: Samarjit Dey Roll no: 31 4th semester 1

Service recovery
Service recovery refers to the actions taken by an organization or service supplier in response to a service failure. Service recovery refers to the actions a supplier takes in order to seek out dissatisfaction and as a response to poor service quality i.e. service failure.

Types of service failure

FAILURES

20% Service failure

27% Goods/equipment/ facility failure

53% Customer failure

The four acid tests of service recovery

1. Does it lead to increased customer satisfaction (at least for those customers that the organization wishes to retain)? 2. Does it improve retention rates? 3. Does it drive process improvements? 4. And, as a result of the above, does it improve financial performance?

Customer reaction to service failures

Level of dissatisfaction Likely reactions 0 Satisfied -1 Slightly dissatisfied -2 Annoyed -3 Very annoyed -4 Extremely annoyed -5 Absolutely furious Do nothing Make a fuss complain Tell friends Not use again Dissuade others Consumer terrorism

Service recovery ingredients

Designing-out failures to prevent them happening in the first place Excellent complaint handling Proactive service recovery seeking out problems and potential problems

Designing-out failures
1. Identify the potential or actual weak points in a process. This can be done using either process engineering tools or the results of analysis of complaints data. 2. Identify the type or nature of the failure(s) (service, equipment, or customer). 3. Focusing on the type of failure, brainstorm various ways of reducing or preventing errors. 4. Select, design and implement the most appropriate poka yoke. 5. Monitor and evaluate the effect of implementation and repeat the above steps if necessary.

Excellent complaint handling

Acknowledgement Empathy Apology Involve management Fix the problem for the customer Provide compensation Find the root cause Solve the problem Provide assurance

Proactive service recovery

Comment cards Notice Websites Staff feedback

Service guarantees
A service guarantee is a statement that clarifies what the customers can expect from a service, and what the company will do to rectify the situation if the service does not meet expectations.

The four acid tests of service guarantees

1. Does it lead to increased customer satisfaction 2. Does it improve retention rates? 3. Does it drive process improvements? 4. And, as a result of the above, does it improve financial performance?

1. Customer satisfaction Focusing on satisfying the customer Reducing perceived risk Creating a positive attitude Dealing with dissatisfaction 2. Customer retention 3. Process improvements 4. Financial performance

Design of a guarantee
Design of the promise Meaningful Easy to understand Explicit Unconditional The pay-out Design of procedure Improving systems and procedures