SQ Lecture Nine -Building Relationships & Service Recovery (Chapters 12 and 13)

Lecture Nine

• Managing Relationships

and Building Loyalty (Chapter

12)

• Complaint Handling and

Service Recovery (Chapter 13)

Service Quality MKTG 1268

1

JAN 2013 Semester

Overview of Chapter 12

The Search for Customer Loyalty The Wheel of Loyalty Building a Foundation for Loyalty Strategies for Developing Loyalty Bonds with

Customers Strategies for Reducing Customers Defections CRM: Customer Relationship Management

Systems What a Comprehensive CRM Strategy

Includes

2

THE SEARCH FOR

CUSTOMER LOYALTY

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4

Opening Case Study – Harrah’s Entertainment’s

Customer Relationship Management (read page 359)

How Much Profit a Customer Generates

Over Time (Fig 12.3)

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5

Why Is Customer Loyalty Important to A

Firm’s Profitability?

Customers become more profitable the longer they remain with a firm:

Increase purchases and/or account balances

Customers / families purchase in greater quantities as they grow

Reduced operating costs

Fewer demands from suppliers and operating mistakes as customer becomes experienced

Referrals to other customers

Positive word-of-mouth saves firm from investing money in sales and advertising

Price premiums

Long-term customers willing to pay regular price

Willing to pay higher price during peak periods

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Why Customers Are More Profitable

Over Time (Fig. 12.4)

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7

© Pearson Education South Asia Pte Ltd 2013. All rights reserved 8

Assessing the Value of a Loyal Customer

• Must not assume that loyal customers are always

more profitable than those making one-time

transactions

Large customers may expect price discounts in return for

loyalty

Revenues don‘t necessarily increase with time for all types

of customers

• Tasks:

Determine costs and revenues for customers from different

market segments at different points in their customer

lifecycles

Predict future profitability

9

Charging different prices for different customer

market segments

Measuring Customer Equity:

Lifetime Value of Each Customer

Value of referrals

Percentage of customers influenced by other customers

Other marketing activities that drew the firm to an

individual‘s attention

Net Present Value

Sum anticipated annual values (future profits)

Suitably discounted each year into the future

10

See Worksheet on page 363 of

the text

Customers stay loyal when we create value for them

Value can be created for customers through

Confidence benefits

Confidence in correct performance

Ability to trust the provider

Lower anxiety when purchasing

Knowing what to expect and receive

Why are Customers Loyal? (1) (Service Insights 12.1)

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Why are Customers Loyal? (2) (Service Insights 12.1)

Social benefits

Mutual recognition and friendship between

service provider and customer

Special treatment

Better price

Discounts not available to most customer

Extra services

Higher priority when there is a wait

12

The Wheel of Loyalty

13

The Wheel of loyalty (Figure 12.6) shows that arriving at customer loyalty involves 3 components:

Building a foundation for loyalty

Creating loyalty bonds

Reducing churn drivers

The rest of the chapter is organized around these 3 components.

The Wheel of Loyalty (Fig. 12.6)

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Target the right customer and match them to what firm can deliver

How do customer needs relate to operations elements?

How well can service personnel meet expectations of different types of customers?

Can company match or exceed competing services that are directed at same types of customers?

Focus on number of customers served as well as value of each customer

Some customers more profitable than others in the short term

Others may have room for long-term growth

―Right customers‖ are not always high spenders

Can come from a large group of people that no other supplier is serving well

Targeting the Right Customers and

Searching for Value, Not Volume 15

16

Service companies should consider the financial value to the

firm of each customer, rather than just count how many

customers can be served. Heavy users (who buy more

frequently and in larger volumes) are generally more

profitable than occasional users. And because customers

interact with each other in many services, managers need to

think about whether different target segments are compatible

with one another.

Attracting the right customers is important as they bring in

long-term revenues, continued growth in referrals, etc. Emphasis

must also be given to prevent attracting the wrong customers

that typically results in costly churn, a diminished company

reputation and disillusioned employees.

Targeting the Right Customers and

Searching for Value, Not Volume

Effective Tiering of Service :The Customer Pyramid (Fig 12.8)

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Service tiering, building loyalty bonds, and creating membership programs are three of the strategies.

Customer tiers can be developed around different levels of profit contribution, needs (including sensitivities to variables such as price, comfort, and speed), and identifiable personal profiles such as demographics. Each customer tier requires significantly different service levels based on customer requirements and customer value to the firm.

Slicing the customer base per se allows the firm to see clearly where the profits and the loss making segments are and tailor their marketing accordingly in response.

Effective Tiering of Service :The Customer Pyramid (Fig 12.8)

Read up on the four tiers of customers (platinum, gold, iron

and lead (page 369)

Relationship between Satisfaction and Loyalty

19

The satisfaction-loyalty relationship can be divided

into three zones:

zone of defection—occurs at low satisfaction levels

zone of indifference—found at moderate

satisfaction levels

zone of affection—occurs at very high satisfaction

where customers do not find the need to seek

alternative service providers

The Customer Satisfaction Loyalty Relationship (Fig. 12.10)

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20

Strategies for Developing Loyalty Bonds with

Customers (1)

Deepening the relationship

Bundling/Cross-selling services makes switching a major effort that customer is unwilling to go through unless extremely dissatisfied with service provider

Customers benefit from buying all their various services from the same provider

One-stop-shopping, potentially higher service levels, higher service tiers etc

21

Strategies for Developing Loyalty Bonds

with Customers (2)

Reward Based Bonds Can be financial or non-financial bonds or a

combination of both Financial bonds

Discounts on purchases, loyalty program rewards (e.g. frequent flier miles), cash-back programs

Non-financial rewards

Priority to loyalty program members for waitlists and queues in call centers; higher baggage allowances, priority upgrading, access to airport lounges for frequent flyers

Intangible rewards

Special recognition and appreciation

Reward-based loyalty programs are relatively easy to copy and rarely provide a sustained competitive advantage

22

See example of rewards used by British

Airways in Service Insights 12.4 on page

375 of the text (see Table 12.1)

23

Serv

ice Insi

ght 12.4


with Customers (3)

Social Bonds Based on personal relationships between providers

and customers

Harder to and takes a longer time to build, but also harder to imitate and thus, better chance of retention in the long term

Customization Bonds Customized service for loyal customers

e.g. Starbucks

Customers may find it hard to adjust to another service provider who cannot customize service

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25

Building Strong Customer Bonds


with Customers (4)

Structural Bonds Mostly seen in B2B settings

Align customers way of doing things with supplier‘s own processes

Joint investments in projects and sharing of information, processes and equipment.

Can be seen in B2C environment too

Airlines - SMS check-in, SMS email alerts for flight arrival and departure times

Difficult for competition to draw customers away when they have integrated their way of doing things with existing supplier

26

Analyze Customer Defections and Monitor

Declining Accounts

Understand reasons for customer switching

Churn Diagnostics common in mobile phone industry

Analysis of data warehouse information on churned and declining customers

Exit interviews:

Ask a short set of questions when customer cancels account; in-depth interviews of former customers by third party agency

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What Drives Customers to Switch? (Fig 12.14)

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Address Key Churn Drivers

Deliver quality service

Reduce inconvenience and non-monetary costs

Have fair and transparent pricing

Industry specific drivers

Cellular phone industry: handset replacement a common reason for subscribers discontinuing services – offer handset replacement programs

Take active steps to retain customers

Save teams: specially trained call center staff to deal with customers who want to cancel their accounts

Be careful about how save teams are rewarded (see Service Insights 12.5)

29

Other Ways to Reduce Churn

Implement Effective Complaint Handling and Service Recovery Procedures

Increase Switching Costs Natural switching costs

e.g. Changing primary bank account – many related services tied to account

Can be created by instituting contractual penalties for switching

Must be careful not to be perceived as holding customers hostage

High switching barriers and poor service quality likely to generate negative attitudes and bad word of mouth

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CRM: CUSTOMER

RELATIONSHIP MANAGEMENT

SYSTEMS

31

Common Objectives Of CRM Systems (1)

Customer perspective Unified customer interface that delivers

customization and personalization

Vast service improvement and increase customer value

Company perspective Better segment, tier customer base and target

promotion

Implement churn alert systems if customers are in danger of defecting

32

Common Applications Of CRM Systems (1) (Service Insights 12.6)

Data collection

Customer data such as contact details, demographics, purchasing history, service preferences, and the like

Data analysis Data captured is analyzed and categorized

Used to tier customer base and tailor service delivery accordingly

Sales force automation

Sales leads, cross-sell and up-sell opportunities can be effectively identified and processed

Entire sales cycle from lead generation to close of sales and after- sales service can be tracked and facilitated through CRM system

33

Common Objectives Of CRM Systems (2) (Service Insights 12.6)

Marketing automation

Mining of customer data enables the firm to target its market

Goal to achieve one-to-one marketing and cost savings, often in the context of loyalty and retention programs

Results in increasing the ROI on its marketing expenditure

CRM systems also allows firms to judge effectiveness of marketing campaigns through the analysis of responses

Call center automation

Call center staff have customer information at their finger tips and can improve their service levels to all customers

Caller ID and account numbers allow call centers to identify the customer tier the caller belongs to, and to tailor the service accordingly

For example, platinum callers get priority in waiting loops.

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Comprehensive CRM Strategy (Fig 12.14)

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What a Comprehensive CRM Strategy Includes Integrated Framework for CRM Strategy Development

Strategy Development

• Assessment of business strategy

• Business strategy guides

development of customer strategy


What a Comprehensive CRM Strategy Includes Integrated Framework for CRM Strategy – Value Creation

Value Creation • Translates business and customer strategies

into specific value propositions for both customers and firm

• Customers benefit from priority, tiered services, loyalty rewards and customization

• Company benefits from reduced customer acquisition and retention costs, and increased share-of-wallet

• Dual creation of value: customers need to participate in CRM to reap value from firm’s CRM initiatives

What a Comprehensive CRM Strategy Includes Integrated Framework for CRM Strategy – Multi-Channel Integration

Multi-channel Integration • Serve customers well across many

potential interfaces

• Offer a unified interface that delivers customization and personalization

What a Comprehensive CRM Strategy Includes Integrated Framework for CRM Strategy – Performance Assessment

Performance Assessment • Is CRM system creating value for

key stakeholders?

• Are marketing and service standard objectives being achieved?

• Is CRM system meeting performance standards?

What a Comprehensive CRM Strategy Includes Integrated Framework for CRM Strategy – Information Management

Information Management • Collect customer information from all

channels

• Integrate it with other relevant information

• Make useful information available to the frontline

• Create and manage data repository, IT systems, analytical tools, specific application packages

41

Collecting customer information at different

touchpoints

Common Failures in CRM Implementation

Unfortunately, there is a high failure rate for CRM implementations

Common reasons for failures Viewing CRM as a technology Initiative

Lack of customer focus

Not enough understanding of customer lifetime value (CLV)

Inadequate support from top management

Lack of coordination

Failure to reengineer business processes

Underestimating the challenges in data integration

42

Implementation of CRM- key questions to ask when

defining customer relationship strategy:

How should our value proposition change to increase customer loyalty?

How much customization or one-to-one marketing and service delivery is appropriate and profitable?

What is the increase in profit from increasing share-of-wallet with current customers? How much does this vary by customer tier and/or segment?

How much time and resources can we provide to CRM right now?

If we believe in customer relationship management, why haven‘t we taken more steps in that direction in past?

What can we do today to develop customer relationships without spending on technology?

43

Summary of Chapter 12: Managing Relationships

and Building Loyalty (1) 44

Customer loyalty as an important driver of profitability for service firms so firms need to

Assess value of loyal customer

Narrow gap between actual and potential customer value

Wheel of Loyalty shows how firms can:

Build a foundation of loyalty

Create loyalty bonds

Reduce churn drivers

Building a foundation of loyalty involves

Good fit between customer needs and capabilities

Searching for value, not just volume

Tiering services effectively

Obtaining customer satisfaction through service quality


and Building Loyalty (2) 45

Customer loyalty bonds include

Reward-based bonds

Social bonds

Customization bonds

Structural bonds

Strategies for reducing customer defections include

Analyzing customer defections and monitoring declining accounts

Addressing key churn drivers

Implementing effective complaint-handling and service recovery procedures

Increasing switching costs


And Building Loyalty (3) 46

Customer relationship management (CRM) is a whole process by which relations with customers are built and maintained.

An integrated CRM system includes

Strategy development process

Value creation process

Multichannel integration process

Performance assessment process

Cresting a successful CRM program requires understanding common failures in CRM implementation and knowing how to get it right

Overview of Chapter 13

Customer Complaining Behavior

Customer Responses to Effective Service Recovery

Principles of Effective Service Recovery Systems

Service Guarantees

Discouraging Abuse and Opportunistic Customer Behavior

47

48

Opening Case : JetBlue Service Recovery

CUSTOMER

COMPLAINING BEHAVIOR

49

Customer satisfaction formula: linking the topics

50

Service Quality

(chapter 14) This chapter (13) Chapter 12

Customer response to service failures

1. Do nothing

2. Complain in some form to the service firm

3. Take some kind of overt action with a third

party (e.g. complain to a consumer claims

tribunal)

4. Defect and simply not patronise this firm again

51

Customer Response Categories to Service Failures (Fig. 13.3)

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53

Why some customers take NO action

Consumer complaint behaviour

How often do people complain? 54

Why do customers complain?

Compensation for a monetary loss—either in the

form of a refund and/or by having a service

performed again.

Complain to rebuild self-esteem. When customers

feel service employees have mistreated them,

their self-esteem, self-worth, or sense of fairness

may be negatively affected.

Help to improve the service

Because of concern for others

55

Key issues to investigate regarding customer

complaining behavior: 56

What proportion of unhappy customers complain?

Why don‘t unhappy customers complain?

Who is most likely to complain?

Where do customers complain?

Why unhappy customers often don’t complain:

57

Customers usually give the following three reasons for not complaining: (1) they don‘t think it‘s worth their time and/or effort; (2) they don‘t believe the service provider will be concerned about their problem and/or resolve it; or (3) they don‘t know where to go and what to do.

Cultural and social norms may also affect complaining behavior. In some European and Asian countries, customers feel awkward or embarrassed about making a complaint. Social norms may discourage criticisms of professional service providers, because they are viewed as experts in their fields

58

What do customers expect once they have made a

complaint?

59

Once a complaint is made, customers expect to be adequately compensated in a fair manner.

The firm is expected to assume responsibility in having a convenient and responsive recovery process. Not only must the employees of the firm be able to explain and resolve the failure, they have to come across as genuine, honest, and polite throughout.

Lastly, the compensation given has to cover the losses incurred by the customer both in terms of actually monetary loss and other potential cost incurred as a result of the failure (e.g., time, effort).

The types of ‘justices’ (see page 342 and Figure

13.7) 60

Procedural justice

Concerns policies and rules that customer has to go

through in order to seek service recovery

Interactional justice

Dealing with employees of the firm; their behaviors

towards the aggrieved customer

Outcome justice

Compensation received by the customer

3 Dimensions of Perceived Fairness in Service Recovery

Process (Fig. 13.6)

61

Rage behaviours evolving over time as complaints are poorly handled

despite multiple opportunities to enact good service recovery

62

Dealing with Complaining Customers and

Recovering from Service Failure

Take complaints professionally and not personally

Be prepared to deal with angry customer who may

behave in an insulting way to service personnel who

may not be at fault

Take the perspective that customer complaints allow

firm a chance to

Correct problems,

Restore relationships

Improve future satisfaction for all

Develop effective service recovery procedures

63

Service recovery

Service recovery involves actions taken

by the organisation to put things right

for the customer following a service

(core or supplementary) failure.

64

Importance of Service Recovery

Plays a crucial role in achieving customer satisfaction

Tests a firm‘s commitment to satisfaction and service quality Employee training and motivation is highly

important

Impacts customer loyalty and future profitability Complaint handling should be seen as a profit

center, not a cost center

65

The Service Recovery Paradox

Customers who experience a service failure that is satisfactorily resolved may be more likely to make future purchases than customers without problems (Note: not all research supports this paradox)

If second service failure occurs, the paradox disappears—customers‘ expectations have been raised and they become disillusioned

Severity and ―recoverability‖ of failure (e.g., spoiled wedding photos) may limit firm‘s ability to delight customer with recovery efforts

Best strategy: Do it right the first time

66

Components of an effective service recovery system

67

Principles of effective service recovery systems

68

Table 13.1 recommends some strategies companies can adopt to reduce customer complaint barriers. The activities suggested have three main objectives;

(1) Making feedback easy and convenient—make feedback tools easily accessible to customers,

(2) reassuring customers that their feedback would taken seriously and acted upon—publish feedback from customers and subsequent actions in company newsletters/publications, and

(3) make the feedback process a positive experience for the customers—training frontline staff to make customers feel comfortable giving feedback; thanking customers for feedback.

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Strategies to Reduce Customer Complaint Barriers (Table 13.1)

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How to Enable Effective Service Recovery

Be proactive On the spot, before customers complain

Plan recovery procedures Identify most common service problems and have

prepared scripts to guide employees in service recovery

Teach recovery skills to relevant personnel

Empower personnel to use judgment and skills to develop recovery solutions

71

How Generous Should Compensation Be?

There is not hard and fast rule to how much to compensate, but there are some rule of thumb that companies can turn to for reference.

(1) Position of the firm—are you a service leader or laggard? The higher you are, the more customer expect from the service recovery.

(2) How severe was the service failure—naturally the greater the damage caused, greater the cost to the consumer (e.g., monetary cost, time, effort, distress), the greater the amount of the compensation.

(3) Relationship between the affected customer and the firm—if it is a long-term customer, naturally more is demanded, at the same time, it pays to retain loyal customers. On the other hand, first time customers can become loyal if treated right.

72

How Generous Should Compensation Be?

(‘rule-of-thumb’) 73

The rule-of-thumb for recovery policies should be that

customers should be compensated with ‗well-dosed

generosity.‘

On the one hand, the firm cannot be perceived as

stingy and calculating, and on the other hand, it should

not be seen as overcompensating.

Overcompensation does not only fail to increase

satisfaction much further beyond a recovery perceived

as fair, it also may give the wrong incentives to the

wrong customers (jaycustomers?) to complain too much.

Service Insights 13.2 : guidelines companies can use to handle

complaining customers and recover from a service failure (read page 406)

74

1. Act fast

2. Acknowledge the customer‘s feelings

3. Don‘t argue with the customer

4. Empathize with the customer

5. Clarify the truth and sort out the cause

6. Give customers the benefit of doubt

7. Propose the steps needed to solve the problem

8. Keep customers informed of progress

9. Consider compensations

10. Continue to regain customer goodwill

11. Self-check the system and improve it

The Power of Service Guarantees

• Force firms to focus on what customers want

• Set clear standards

• Require systems to get & act on customer

feedback

• Force organizations to understand why they fail

and to overcome potential fail points

• Reduce risks of purchase and build loyalty

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Service Guarantees

How to Design Service Guarantees

Unconditional

Easy to understand and communicate

Meaningful to the customer

Easy to invoke

Easy to collect

Credible

77

See Service Insights

13. 3 on page 408

Types of Service Guarantees

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Is it Always Suitable to Introduce a Guarantee?

It is not appropriate to introduce guarantees when:

Companies have a strong reputation for service excellence

Company does not have good quality level

Quality cannot be controlled because of external forces

Consumers see little financial, personal or physiological risk associated with the purchase

80

Jaycustomer: A customer who behaves in a thoughtless or abusive fashion, causing problems for the firm, its employees, and other customers

More potential for mischief in service businesses, especially when many customers are present

No organization wants an ongoing relationship with an abusive customer

81

Discouraging Abuse and Opportunistic Customer

Behavior

Seven Types of Jaycustomers: (1)

The Cheat and Thief

The Cheat: thinks of various way to cheat the firm

The Thief: No intention of paying--sets out to steal or pay less

Services lend themselves to clever schemes to avoid payment

e.g., bypassing electricity meters, circumventing TV cables, riding free on public transportation

Firms must take preventive actions against thieves, but make allowances for honest but absent-minded customers

82


The Rulebreaker

Many services need to establish rules to guide customers safely through the service encounter

Government agencies may impose rules for health and safety reasons

Some rules protect other customers from dangerous behavior

e.g. ski patrollers issue warnings to reckless skiers by attaching orange stickers on their lift tickets

Ensure company rules are necessary, not should not be too much or inflexible

83

Shouts loudly, maybe mouthing insults, threats and curses

Service personnel are often abused even when they are not to be blamed

Confrontations between customers and service employees can easily escalate

Firms should ensure employees have skills to deal with difficult situations


The Belligerent

Confrontations between Customers and Service Employees Can Easily Escalate

In a public environment, priority is to remove person from other customers

May be better to support employee’s actions and get security or the police if necessary if an employee has been physically attacked

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85

Family Feuders: People who get into arguments with other customers – often members of their own family

The Vandal:

Service vandalism includes pouring soft drinks into bank cash machines; slashing bus seats, breaking hotel furniture

Bored and drunk young people are a common source of vandalism

Unhappy customers who feel mistreated by service providers take revenge

Prevention is the best cure

Seven Types Of Jaycustomers: (4)

Family Feuders And Vandals 86

87

Discouraging Vandalism

Seven Types Of Jaycustomers: (5)

The Deadbeat

Customers who fail to pay (as distinct from ―thieves‖ who never intended to pay in the first place)

Preventive action is better than cure--e.g., insisting on prepayment; asking for credit card number when order is taken

Customers may have good reasons for not paying

- If the client's problems are only temporary ones, consider long-term value of maintaining the relationship

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Consequences of Dysfunctional Customer Behavior

Employees:

Mood or temper negatively affected

Long-term psychological damage

Staff morale will fall, affecting productivity

Other Customers:

Positive – rally to support an employee who is perceived to

be abused

Negative – Contagious bad behavior might escalate the

situation

89

Dealing with Customer Fraud

If in doubt, believe the customer

Keep a database of how often customers invoke service guarantees or of payments made for service failure

Insights from research on guarantee cheating:

Amount of a guarantee payout had no effect on customer cheating

Repeat-purchase intention reduced cheating intent

Customers are reluctant to cheat if service quality is high (rather than just satisfactory)

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Dealing with Customer Fraud

91

Managerial implications:

Firms can benefit from offering 100 percent money-

back guarantees

Guarantees should be offered to regular customers as

part of membership program since regular customers

are unlikely to cheat

Excellent service firms have less to worry about than

average providers

When customers are dissatisfied, they can

Take some form of public action

Take some form of private action

Take no action

To understand customer responses to service failures, some questions to ask are

Why do customers complain?

What proportion of unhappy customers complain?

Why don‘t unhappy customer complain?

Who is most likely to complain?

Where do customers complain?

What do customers expect once they have made a complaint?

Summary of Chapter 13 –Service

Recovery and Customer Feedback (1) 92

Effective service recovery can lead to customer loyalty

The service recovery paradox does not always hold true—better to get it right the first time

Guiding principles for effective service recovery include

Make it easy for customers to give feedback

Enable effective service recovery

Focusing on how generous compensation should be

Issues to consider in having services guarantees are

Power of service guarantees

How to design service guarantees

Is full satisfaction the best a firm can guarantee?

Is it always appropriate to introduce a service guarantee?



There are seven types of jaycustomers

The Cheat

The Thief

The Rule Breaker

The Belligerent

The Family Feuders

The Vandal

The Deadbeat

To discourage abuse and opportunistic behavior, we need to deal with customer fraud



Practice Exam Question

95

You are the chief marketing officer at XCel Pte Ltd.

From your perspective, for the benefit of the

organization, it is worthy to have service guarantees in

place. However, you need approval from the executive

board before you proceed with designing the service

guarantees. Explain to the executive board:

(a) the power of service guarantees

(b) how to design a service guarantee

(c) present the different types of service guarantees to the

board for consideration

Practice Examination Questions

96

The implementation of profitable service strategies

can include building relationships and customer

loyalty as well as putting effective complaint

handling/service recovery processes in place.

Describe the various strategies for building customer

loyalty (10 marks) and complaint handling/service

recovery (10 marks)

Practice Examination Question

97

As a graduate who has undertaken and successfully completed the MKTG 1268 Service Quality course, and a potential manager and owner of your own service business, you know the importance of building customer loyalty for the long-term success of your business, as well as good service recovery strategies when ‗things go wrong‘. Recall and list the key theories and concepts you have learnt that are important to building customer loyalty and implementing good service recovery, and give examples of how these may be implemented.

Practice Examination Question:

98

Research suggests that many dissatisfied

customers never complain but simply defect to

a competitor. What are the management

implications of this finding and how might

managers try to minimise such defections?

Practice Examination Question:

99

Using the most appropriate theory/conceptual

model taught in this course, explain why a

customer may be ‗satisfied‘ with consistently

poor levels of service (quality) they experience

from the same service provider.

Practice Exam Question

100

Café Rende is a small café well known among the locals for its delicious

cakes, well blended coffee and nice décor. To cater for rising customer

expectations, the owner has decided to update her shop by painting the

walls, changing the furniture and also installing credit card payment

facility because she noted that more customers ask to pay by credit

card. She also introduced, due to popular demand, a series of cake

baking classes. She also introduced home delivery service for locations

within a 3 km radius and for purchases of more than $50.

Question: Discuss the customer feedback collection took from which the

owner‘s service improvement ideas evolved and suggest TWO other

feedback collection tools that can potentially be implemented in the

future (by a small business like Café Rende), identifying each of their

strengths and weaknesses.

SQ Lecture Nine -Building Relationships & Service Recovery (Chapters 12 and 13)

Business

practice examination question

developing loyalty bonds

tier customer base

building customer loyalty

building loyalty

service recovery

customer tier

service guarantees