Service Recovery: how companies handle customer complaints

Everyday people purchase goods, and unfortunately it is inevitable that sometimes goods do not live up to costumers’ expectations. On the other hand, many researches agree that recovery after a service failure can make customers more satisfied and loyal than if the service failure had not occurred at all. Customer complaints occur all the time even though many companies wish they could lower the number of complaints. The purpose of this thesis, therefore, was to provide a better understanding on how to turn a dissatisfied customer into a satisfied one. In order to reach this purpose, research questions that focus on how the handing of a service recovery can be described, as well as the benefits of doing so have been stated. These research questions provided a path to reviewing the relevant literature which results in a conceptual framework. This framework was then used to guide the data collection. Data was collected via a qualitative, case study approach using interviews of six recent customers of consumer electronics, enabling us to collect data on a service recovery from a customer’s perspective. The study found that the service failure itself is not what companies should focus on. Instead, it is the effort a company is willing to make to recover from a service failure that matters for most customers. Our findings show a connection between how the employee handles the service recovery and customer satisfaction. We also found benefits connected to handling customer complaints, such as word-of-mouth and customer retention. These benefits can be achieved by companies that welcome customer complaints and respond to their customers’ needs instead of trying to minimize the number of complaints.

Author: Blanksvärd, Lena; Castillo, Nicole; Toolanen, Malin

Source: Luleå University of Technology

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