Handling Customer Complaints and Managing Service Recovery

Customer complaints and service recovery are the most important things for a business, they both have potential to affect customers level of satisfaction. They also provide a chance for the customer to offer their different opinion, thereby improving the business service. As shown in Figure 12.1, when there is service failure customers elicit different responses. Due to this variation of behaviour; the business would never know what the customer is thinking without understanding customer complaint behaviours. Moreover, once the business knows what makes a customer unhappy, they need to quickly respond to the customer.

One in four customers has a problem with products purchased. If the item purchased is relatively low in price, only one in five will register a complaint (Eccles & Durand 1998). Most of the customers will not complain even though they have a problem with the product. For example, when people buy flowers from Canary Jane’s Flowers, once they get home and find the flowers are not fresh, they probably won’t go back to the shop and complain because the cost of time complaining does not seem worth it.Instead they may decide not come to the shop again. Therefore, Canary Jane’s Flowers needs to make a different plan for customers, making a complaint strategy to maximise customer satisfaction, such as recording the customer mobile phone number and make a call to them after the customer purchase. The business should always be proactive to gather information from the customer (Blazevic & Lievens 2007).

Once the business receives the complaint from customer, there are many steps to recover services. The most effective way is returning the money to the customer if there is a big problem with the product, or apologise to the customer and attempt to find out why they’re dissatisfied, thereby the business can provide adequate explanation to persuade the customer to come back again. In addition, the business should build blueprints to help the manager to go through every fail point of the service, and avoid it happening again, this is another method of service recovery.

References:

Eccles, G & Durand, P 1998, 'Complaining customers, service recovery and continuous improvement',Managing Service Quality, vol. 8, no. 1, pp. 68-71.

Blazevic, V & Lievens, A 2007, 'Managing innovation through customer coproduced knowledge in electronic services: An exploratory study', Journal of the Academy of Marketing Science, vol. 36, no. 1, pp. 138-151.

The Role of Customers Within the Organisation

The “key characteristic of a service is that it takes place at the interface with the customer”, therefore without customers the service does not exist (Maull, Geraldi & Johnston 2012). The role of the customer within a florist is to identify their needs and wants and communicate as effectively as possible to the service provider.

There is significant variance in the amount of participation that customers apply, and the optimal level may not always be reached (Gallan et al. 2012). As illustrated in Figure 11.1, a florist’s customer’s optimal level of participation is moderate. A florist like Canary Jane’s Flowers requires customer inputs for an adequate outcome but the florist still provides the range of flowers. It is not considered high participation because the client participation does not guide what flowers you buy, and customer does not co-create the outcome, like a personal trainer would.

The customer needs to be able to demonstrate the desire to search for information or a particular product, or able to create a flower arrangement order. In Canary Jane’s case the customer would either want to search for information about what they want, whether it be flowers or a gift, or have the ability to understand what type of flowers they want and order an arrangement. The employee provides product knowledge, organisation offerings and an end result; regardless if there is a sale or not.

It’s important to highlight that Canary Jane’s is a family friendly business; they sell some children toys and therefore attract a lot of adult customers with infants. Children can be stubborn and not obedient when they are told not to touch items, you can only control children to a certain extent. Due to this these customers are not able to perform their role in the service. However, Canary Jane’s have implemented a strategic method of dealing with such customers, they have put all the unbreakable and not precious items on the low height so this way the children can still touch items but there is no issue of them breaking these items.

The organisation, although a service, creates tangible aspects to support the intangible service. For instance, at Canary Jane’s Flowers they provide a business card of contact details on the gift bag with the purchase as well as a physical copy of the debit card receipt, (refer to appendix photos 11.21, 11.22, 11.23) therefore the business played their role in this encounter but if the customer does not follow through with their implicit role of storing their receipt for a reasonable period, then a resolution in order to resolve post purchase issues from the customer’s side has not been fulfilled. Since Canary Jane’s Flowers has attached their business details, it’s the customer’s implicit responsibility to contact the store if an issue arises; this is in both parties best interest. This leads into complaint behaviour and how to deal with complaints.

References: 


Maull, R, Geraldi, J & Johnston, R 2012, 'Service Supply Chains: A Customer Perspective', Journal of Supply Chain Management, vol. 48, no. 4, pp. 72-86.

Gallan, A, Jarvis, C, Brown, S & Bitner, M 2012, 'Customer positivity and participation in services: an empirical test in a health care context', Journal of the Academy of Marketing Science, vol. 41, no. 3, pp. 338-356.

Integrated Marketing Communication Strategies

The most important part of integrated marketing communication for Canary Jane’s Flowers is the communication between customers and employees. As shown in Figure 9.1 this form of communication is considered interactive marketing on the triangle and relates to delivering the promise. Canary Jane’s promise is to give customers the freshest flowers that are locally sourced and deliver exceptional service, their interactive communications plays an important role in creating consistent service to deliver this promise. Since Ms. Stacey doesn't have an advertising agent, she relies mainly on this form of communication to promote the business. She focuses more in delivering an excellent service in order to gain a good reputation and customer retention. This is evident by the review comments that have been uploaded by the customers, who have dealt with Canary Jane’s Flowers.

Interactive marketing involves having skilful and qualified frontline employees that understand what each customer requires. Canary Jane’s Flowers once had a customer who wanted to give his girlfriend a yellow flowers for Valentine's Day, the staff explained to him that yellow flowers symbolise friendship and suggested a different colour, the customer was impressed by their knowledge and went along with their suggestion. This illustrates that the staff intend to understand the customer's needs and offer the best service.

Interactive channels must be integrated to create consistent service promises. As part of advertising strategy Canary Jane’s Flowers uses social media such as Facebook. Their Facebook page is very interactive and up to date with lots of colourful pictures to appeal to the market. Canary Jane's Flowers was also featured in Frankie magazine, which is another form of unpaid advertising for the business. This proves that the staff are very active and consistent with the service provided.

Horizontal communication, also identified as lateral communication, is the passing of messages between entities and groups on the same level of an organization (Zeithaml, Bitner & Gremler 2013, p.434). Horizontal communication assists in the production of high quality exchange because it happens directly between people in the same environment, therefore it is also more efficient. Floristry is an artistry profession and fully depends on what the customers desires. Since there is only a small team of three at Canary Jane’s Flowers, horizontal communications is more significant and suitable. On the other hand, where there is an open channel between sales and operations things are more complicated (Zeithaml, Bitner & Gremler 2013, p.434). This is why Canary Jane’s Flowers communicate information through various strategies. For instance, horizontally; there is a system where all the staff uses to check for updates and also the orders. Vertically; in situations where there is a matter that requires the owner’s permission for decision making, such as a price change, then the information is sent to Ms. Stacey's email address. In addition, the rules, policies, procedures and regulations are all passed down from Ms. Stacey to all the staff members causing a downward flow of information. The communication returns upwards with the end of the day performance reports, complaints, feedback, etc. Communication can be difficult if employees do not effectively fulfill their roles.

References:

Zeithaml, V, Bitner, M & Gremler, D 2013, Services marketing, McGraw-Hill Irwin, New York.

Managing Capacity and Demand

It is very important to match demand and capacity as it would allow the organisation to maximise on profitability and utilise resources efficiently. If capacity and demand are not matched, issues can arise such as failure to smooth the peaks and valleys of demand and overuse of the capacity (Kossmann 2006, p. 39).

Failure to smooth the peaks and valleys of demands is caused by failing to match the supply to the demand (Kossmann 2006, p. 39). It could get really busy before lunch time in Canary Jane’s Flowers with up to five customers all at once. Ms. Stacey, the owner and manager, is aware that during this time and also the morning that it can get very busy so they ensure they have enough stock and staff to match for the day because of the uncertainty. In addition, seasonal changes can affect the demand. For example, weddings tend to happen a lot more in the spring and therefore this increase the demand for flowers more in comparison to winter. This means, for Canary Jane’s Flowers that they would need to increase the capacity to match the demand in spring time and reduce it in winter where it's not as busy. Another method to match the capacity and demand is shifting demand which focuses on customers and involves stretching capacity by using strategies to either attract or detract customers at certain times (Zeithaml, Bitner & Gremler 2013, p. 385). For instance, at Canary Jane’s Flowers on slow days they modify their hours of operation. On busy days such as Valentine’s Day they promote the benefits of ordering earlier than on the day to shift the demand since they know capacity will be too low. For more information on methods to shift demand please refer to Figure 8.1.

Overuse of capacity in the Canary Jane's Flowers scenario would refer to the ratio of staff to customers. Adjusting capacity focuses on the supplying side to fix the difference between capacity and demand (Zeithaml, Bitner & Gremler 2013, p. 388). Ms. Stacey usually has two florists in during the busiest days of the year, for instance Valentine’s Day and Mother’s day. To decrease demand during peak times they rely on students who are on work placements for extra hand when it is necessary. In the winter time where demand it too low employees have a holiday and Ms. Stacey would only keep one person in the store while she would drop in every now and then to give a hand if necessary. For more information on methods to adjust capacity please refer to Figure 8.2. Therefore, there isn’t much overuse in the capacity for Canary Jane’s flowers since adjusting capacity strategies are utilised effectively.

If capacity and demand aren’t matched this means there is both excess demand and business can be lost, or an excess in capacity and resources are wasted. It is very important for Canary Jane’s Flowers to understand their capacity and demand because on top of this they also need to stock the freshest flowers, not have stock sitting there for days. Therefore, capacity and demand should be recognised as an important way for Canary Jane’s to maximise on profitability. Capacity and demand levels will also be influenced by the organisation's communications.

References: 

Kossmann, M 2006, Delivering excellent service quality in aviation, Ashgate, Aldershot, England.Zeithaml, V, 

Bitner, M & Gremler, D 2013, Services marketing, McGraw-Hill Irwin, New York.

Service Quality and Service Guarantee

Service quality defines the level a customer is satisfied because it is the critical element customers use to evaluate service (Zeithaml, Bitner & Gremler 2013, p. 87). Therefore in a consumer service experience within a store, service providers must reach out to customers and listen to their desired fulfilments while also assisting their journey from enquiries, selection process, purchase process through to the possible post purchase issues. Ensuring service quality and eliminating the need for service recovery is “doing it right the first time”, this shows the business is reliable (Zeithaml, Bitner & Gremler 2013, p. 201). Canary Jane’s Flowers is a floral service combined with highly priced yet small sized gift goods, for example candles, rosedale hankies and hand creams. The higher costs of the small gift products would naturally create an implied higher service quality. “The intangibility and unpredictability of services generally cause consumers to perceive a higher risk associated with a service” (Sharma & Varghese 2013). Customers can have uncertainty and be unconfident of the service quality for particularly high priced stores, like Canary Jane’s (Sharma & Varghese 2013).

A method to reduce consumer’s uncertainty with the quality of a product is guarantees, which ensure the customer is 100% satisfied (Hart 1988). “A service guarantee is a promise by a company to compensate the customer in some way if the defined level of service delivered is not met.” (Sharma & Varghese 2013). There are several characteristics of effective guarantees that will be explained relating to Canary Jane’s Flowers and the benefits of having an effective guarantee will be illustrated. Effective guarantees should be unconditional, meaningful, easy to understand and easy to invoke (Zeithaml, Bitner & Gremler 2013, p. 202). Canary Jane’s guarantees that the flowers will last at least 4 days after buying them, this is unconditional because it “promises customer satisfaction unconditionally, without exceptions” (Hart 1988). This guarantee is meaningful because it covers the aspects of the service that is important to the customer, which is the freshness and quality of the flowers. It is also meaningful financially; a full refund or replacement is given. The guarantee is easy to understand as it is simple and pinpoints the promise (Hart 1988). A guarantee must be easy to invoke, as explained by Hart (1988) “A customer who is already dissatisfied should not have to jump through hoops to invoke a guarantee.”

“Service guarantees have been advocated as a potentially powerful weapon today in trying to differentiate between services and gain the competitive edge” (Sharma & Varghese 2013). Another benefit of service guarantees is maintaining quality (Zeithaml, Bitner & Gremler 2013, p. 204).The organisation can maintain quality as the guarantee is an indicator of what the service should provide, for instance at Canary Jane’s Flowers they guarantee same day delivery if you order before 2pm. By having this benchmark an employee knows the minimum needs that need to be met for the customer, which in this case is getting the flowers delivered to the customer on the same day. Canary Jane’s Flowers uses Murphy Alan Johns for the delivery of their orders and if for any reason there is a disruption with the process, then the staff will assist with the delivery to ensure that the guarantee is met. Small to medium enterprises often bestow less service guarantees due to less workers to help achieve promises, avoiding over promising is considered safe in the employer's eyes. The low number of apparent written and verbal guarantees from Canary Jane’s will ultimately impact the “willingness of the customer to make frequent visits” (Sharma & Varghese 2013). Ensuring the guarantees are used effectively, they will benefit the business. Canary Jane’s will increase loyal customers through the use of guarantees, which equates to profitability in the long run. Guarantees are irrelevant if the organisation does not monitor whether they are successfully delivering a quality service.

References: 

Zeithaml, V, Bitner, M & Gremler, D 2013, Services marketing, McGraw-Hill Irwin, New York.

Sharma, K & Varghese, M 2013, 'Influence of Service Guarantee on Consumer Behavior in organized retail stores', Romanian Journal of Marketing, vol. 1, pp. 10-17.

Hart, C 1988, 'The Power of Unconditional Service Guarantees', Harvard Business Review, vol. 66, no. 4, pp. 54-63.