Marketing Management, Millenium Edition - epiheirimatikotita.gr

208 CHAPTER 11 DESIGNING AND MANAGING SERVICESdrinking water 8 days a year. Companies can be distinguished between those offering“merely good” service and those offering “breakthrough” service aiming at 100 percentdefect-free service. 22Monitoring SystemsTop firms regularly audit service performance, both their own and their competitors’.They use a number of measurement devices: comparison shopping, ghost shopping,customer surveys, suggestion and complaint forms, service-audit teams, and letters to thepresident. General Electric sends out 700,000 response cards a year asking householdsto rate its service people’s performance; Citibank checks continuously on measures ofART (accuracy, responsiveness, and timeliness). RedEnvelope Gifts Online, an on-lineretailer specializing in upscale gifts, analyzes how many of its orders were correctly filled,how many were shipped on time, and how many orders were returned by customers. 23When designing customer feedback mechanisms, service marketers need to askthe right questions, as United Parcel Service (UPS) discovered. UPS always assumedthat on-time delivery was its customers’ paramount concern, and based its definitionof quality on the results of time-and-motion studies. To get packages to customersfaster, UPS would factor in such details as how long it took elevators to open and howlong it took people to answer their doorbells. Accordingly, UPS’s surveys includedquestions about whether customers were pleased with delivery time and whether theythought the company could be any speedier. Yet, when the company began askingbroader questions about service improvements, it discovered that what customerswanted most was more face-to-face contact with drivers. If drivers were less hurried andwould answer questions, customers might get practical advice on shipping. UPS hasnow taken service a step further, allowing customers to track their UPS shipments anddeliveries through its Web site (www.ups.com), where customers can also order shippingsupplies and request parcel pick-up. 24Satisfying Customer ComplaintsStudies of customer dissatisfaction show that although customers are dissatisfied withtheir purchases about 25 percent of the time, only about 5 percent complain. Theother 95 percent either feel that complaining is not worth the effort, or that they don’tknow how or to whom to complain. Of the 5 percent who complain, only about halfreport a satisfactory problem resolution. Yet the need to resolve a customer problemin a satisfactory manner is critical. On average, a satisfied customer tells three peopleabout a good product experience, but the average dissatisfied customer gripes to 11people. If each of them tells still other people, the number of people exposed to badword of mouth may grow exponentially.Toys ‘R’ Us found this out recently when it failed to deliver toys ordered throughits Web site (www.toysrus.com) in time for Christmas. Even though the retailer offered$100 gift certificates to make up for the inconvenience, so many customers were outragedby the delivery problems that the situation made national news and led to aclass-action lawsuit. 25Nonetheless, customers whose complaints are satisfactorily resolved oftenbecome more company-loyal than customers who were never dissatisfied. About 34percent of customers who register major complaints will buy again from the companyif their complaint is resolved, and this number rises to 52 percent for minor complaints.If the complaint is resolved quickly, between 52 percent (major complaints)and 95 percent (minor complaints) will buy again from the company. 26Tax and Brown have found that companies that encourage disappointed customersto complain—and also empower employees to remedy the situation on thespot—achieve higher revenues and greater profits than companies that do not have a