Deck 14: Handling customer complaints and managing service recovery

Question 1

Which of the following benefits could be obtained from a central system for logging complaints?

A)To provide a basis for tracking all complaints to see that they have in fact been resolved
B)To serve as an early warning indicator of deterioration in one or more aspects of service
C)To indicate issues deserving more detailed decision evaluation
D)To serve as an early warning indicator of deterioration of backstage and/or frontstage systems
E)All of the above

Answer 1

E

Question 2

What is the main reason why service encounters are especially vulnerable to service breakdowns?

A)Services are intangible.
B)Services are co-produced.
C)Services cannot be stockpiled.
D)They are delivered by people whose service varies.
E)Services cannot be tested prior to purchase.

Answer 2

D

Question 3

Which of the following is NOT a reason why dissatisfied customers don't complain according to the SOCAP research?

A)The lack of time
B)The organisation will ask too many questions
C)The company might penalise or blame them
D)Their complaint might be resolved expeditiously
E)They don't know who to complain to

Answer 3

D

Question 4

Sam has been waiting for his dentist appointment for more than an hour.According to the theory of stress and coping, what psychological processes are likely?

A)Sam will appraise the situation as beneficial and then cope by distancing.
B)Sam will appraise the situation as threatening his well-being and then make an effort to cope.
C)Sam will perceive triggers for negative emotions and then react with a cognitive appraisal.
D)Sam will adopt a 'Do-Feel-Think' framework for coping with stress.
E)Sam will complain to the receptionist and then appraise the response before evaluating the situation.

Question 5

A recent study of employee attitudes to customer complaints found:

A)a majority of employees felt their firms were accessible for complaints
B)less than half felt empowered to deal with complaints
C)a little over a third has received training in dealing with complaints
D)a, b and c
E)a and c

Question 6

Which of the following is NOT usually a customer response to a service failure?

A)Complain to the service organisation
B)Do nothing
C)Increase purchase frequency with the service organisation
D)Take some kind of overt action with a third party
E)Defect and not patronise the service organisation

Question 7

According to the SOCAP research, a complainant who is dissatisfied with the outcome will tell _______ other people.

A)five
B)seven
C)eight
D)nine
E)eleven

Question 8

It has been suggested that companies should plan to disappoint customers, creating lower expectations, so they can recover and gain stronger loyalty.This has been referred to as the:

A)recovery strategy
B)recovery pre-emption
C)recovery principle
D)negative satisfaction principle
E)recovery paradox

Question 9

Which of the following is NOT a reason to encourage dissatisfied customers to complain?

A)Companies are given the opportunity to salvage the relationship.
B)Complaints provide free feedback.
C)Handling complaints is time consuming.
D)Complaints alert companies to deficiencies in organisational processes.
E)Effective service recovery can increase customer perceived value.

Question 10

Which of the following represents a cost of service failure?

A)Negative word of mouth
B)Decreased trust and loyalty
C)Diminished customer value
D)Re-doing original service
E)All of the above

Question 11

All of the following are reasons for Asian customers NOT to complain when they face a service failure except the:

A)potential loss of face by the service employees
B)fear of negative consequences or retaliation from the service employees
C)teaching of tolerance in Asian societies where Buddhism is the predominant religion
D)concept of kreng jai which is manifested by a reluctance to disturb others, restraining one's anger or frustration, avoiding asserting one's needs or opinions, and a reluctance to voice complaints or displeasure
E)concept of jai yen (cool heart) which is manifested by a reluctance to over-react in situations that Western people might find stressful

Question 12

Which of the following is NOT related to complaint behaviour?

A)The personal importance of the service
B)The cost of complaining
C)Word of mouth
D)Who is to blame for the problem
E)Demographic factors such as age and education

Question 13

Which of the following are reasons why customer disappointment followed by service recovery may not be an appropriate strategy?

A)Service failures are often quite expensive to rectify.
B)Reliability is the most critical determinant of service quality.
C)Increased satisfaction only occurs after exceptional levels of service recovery.
D)Customers weigh their most recent experiences heavily in subsequent purchases.
E)All of the above

Question 14

According to a study of consumer complaint behaviour in Australia by SOCAP (Society of Consumer Affairs Professionals), what percentage of customers who took action when they had a serious service failure were satisfied with the way the problem was resolved?

A)21%
B)34%
C)48%
D)65%
E)71%

Question 15

There are a few options open to customers when they are unhappy with the service they received, including some form of public action.Which of the following may NOT be a public action option?

A)Take legal action to obtain redress
B)Seek redress directly from business firm
C)Complain to business or private agencies
D)Seek redress directly from government
E)Complain to government agencies

Question 16

When consumers complain, the main purposes are to recover some economic loss and to _______.

A)conduct a cognitive appraisal
B)apply a 'Think-Feel-Do' framework
C)trigger negative emotions
D)rebuild self-esteem
E)exercise self-restraint

Question 17

All of the following are considered as 'entry points' of customer complaints EXCEPT:

A)intermediary organisations acting on behalf of the service organisation
B)suggestions placed in an on-site Suggestion Box
C)third parties such as consumer groups
D)frontline staff
E)personal assistants to senior managers

Question 18

All of the following are true EXCEPT:

A)complaints can be looked at as a stream of information that can be used to help monitor quality
B)complaints can be used as a market research input
C)a suggestion usually indicates an opportunity to move a customer from 'somewhat satisfied' to 'delighted'
D)inquiries often reveal weaknesses in providing information
E)complaints take valuable time away from selling

Question 19

What is the main reason for Singapore Airlines to use multilingual in-flight surveys to collect complaints from their passengers?

A)Customers prefer to complain in their native languages.
B)Most of their Asian customers could not write or read English.
C)Japanese and other Asian customers are less willing to send in written complaints.
D)German and other European customers are less willing to complain if the complaint forms are not written in their native languages.
E)English native-speaker customers represent only a small percentage of their total number of passengers.

Question 20

Which of the following may NOT be a true statement?

A)Consumers complain to recover some economic loss.
B)Customers usually seek a refund or a repeat of the service if the problem is unresolved.
C)Anecdotal evidence suggests that loyal customers are even more offended.
D)A reason for engaging in complaining behaviour is to rebuild self-esteem.
E)Consumers often complain to gain some extra favour.

Question 21

Which of the following may NOT be a true statement?

A)During service encounters, when something unexpected happens consumers spontaneously infer or attribute blame.
B)When consumers attribute the blame to the firm rather than to themselves, they are more likely to complain.
C)When the problem is perceived as a matter under the control of the customer, the complaint behaviour increases.
D)When the problem is perceived as a matter under the control of the firm, the complaint behaviour increases.
E)Westerners typically underestimate situation conditions as a cause for a person's behaviour.

Question 22

Pareto developed a rule which is used to identify the principle cause of observed outcomes.The rule which came for this is referred to as the _______ rule.

A)50/50
B)60/40
C)70/30
D)80/20
E)90/10

Question 23

Which of the following is NOT part of Lovelock's extended fishbone framework?

A)Facilities and equipment
B)Materials and supplies
C)Profit and loss
D)Front stage and backstage personnel
E)Procedures

Question 24

South-East Asian consumers were more likely to be more satisfied with recovery efforts when:

A)they were kept regularly informed
B)they initiated the complaint
C)the complaint was dealt with in an informal manner
D)when blame could be attributed to the organisation
E)frontline staff make an apology

Question 25

Which of the following could be a cause for a consumer to switch services on the basis of ethical problems with the organisation?

A)High prices
B)Conflict of interest
C)Billing error
D)Unresponsive
E)Reluctant response

Question 26

If prevention is the key to managing customer failure, which of the following is NOT a step in rectifying the problem?

A)Redesigning service processes
B)Implementing technical solutions
C)Educating customers
D)Encouraging customer citizenship
E)None of the above

Question 27

Research conducted by SOCAP suggests that higher levels of satisfaction were found when complaints handling was _______ and required only _______.

A)within 24 hours; one contact
B)within 48 hours; one contact
C)within 24 hours; two contacts
D)immediate; one contact
E)immediate; two contacts

Question 28

All of the following are benefits from empowering frontline staff to deal with customer complaints EXCEPT:

A)Employee morale may be increased.
B)Customer problems can be resolved in a faster manner.
C)Service delivery can be standardised.
D)Customer complaints may be resolved in a more responsive way.
E)Front line staff are usually the customer's first point of contact.

Question 29

Which of the following conditions makes it more likely that a consumer will engage in the opportunistic behaviour of claiming compensation unreasonably?

A)Consumers perceive that the company tends to treat people unfairly.
B)Consumers perceive the company's employees to be friendly.
C)The company is small.
D)The consumer has made a one-time transaction with the company.
E)The company has a reputation for paying employees fairly.

Question 30

While there are some cultural differences between Asian and Western consumers, their reactions to complaints resolutions:

A)vary very little between cultures
B)are markedly different between cultures
C)are the same between both cultures
D)are inconsistent between cultures
E)are consistent between cultures

Question 31

Consumers have been found to evaluate service recovery on a range of dimensions.Which of the following is NOT one of them?

A)Social justice
B)Outcome justice
C)Distributive justice
D)Procedural justice
E)Interactional justice

Question 32

Which of the following is NOT a principle of effective service recovery at the managerial level?

A)Top management commitment
B)Total quality management
C)'Complaints as opportunities' culture
D)Training and empowerment
E)Ownership of the complaint

Question 33

Which of the following is NOT one of nine guidelines for service recovery tactics?

A)Act fast
B)Show you understand the organisation's point of view
C)Apologise but don't be defensive
D)Acknowledge the customer's feelings
E)Consider compensation

Question 34

When customers make a complaint to the organisation they expect it to be dealt with in:

A)2-3 days
B)3-4 days
C)4-5 days
D)7-8 days
E)8-9 days

Question 35

Which of the following is an example of consumers involuntarily switching providers?

A)Negative response
B)Customer moved
C)Unresponsive
D)Provider closed
E)b and d

Question 36

Service providers should be encouraged to develop a 'complaints as opportunities' culture for which of the following reasons?

A)So that genuine complaints are encouraged.
B)Because employees often tend not to encourage complaints, seeing them as threatening.
C)Because complaints are often perceived as unpleasant and therefore discouraged.
D)Organisations tend to 'shoot the messenger' - the employee that alerts them to the complaint - so employees discourage complaints.
E)All of the above

Question 37

In answering the question 'How satisfied are you after you have made a complaint?' the most common response is:

A)always
B)sometimes
C)rarely
D)never
E)most of the time

Question 38

All of the following should be part of an effective complaint handling process EXCEPT:

A)apologising but not being defensive
B)giving customers the benefit of the doubt
C)clarifying the steps needed to solve the problem
D)ensuring social justice
E)considering compensation

Question 39

In a service failure situation in a hotel/resort setting, South-East Asian consumers were found to be more satisfied than their Australian counterparts with recovery efforts of the hotel/resort in the following instances EXCEPT:

A)the recovery was initiated by the hotel/resort
B)an apology came from a person of senior status
C)they were kept regularly informed of what was being done to resolve the problem
D)who to blame for the service failure was known to the consumers
E)an explanation of the cause of the service failure was given

Question 40

Poor handling of complaints by management creates a negative response in the attitude of the consumer and is perceived as a violation of basic human needs.Which of the following is not one of those needs?

A)Self-esteem
B)Security
C)Fairness
D)Need for control
E)All of the above

Question 41

The satisfaction level was significantly greater the higher up the hierarchy the customers needed to complain.

Question 42

A restaurant that wants to improve service quality is looking for a relatively easy approach to monitoring how long customers wait to be seated.Which of the following methods would best meet that objective?

A)Blueprinting
B)Control charts
C)Fishbone diagrams
D)Pareto analysis
E)Hybrid complaint-handling model

Question 43

Studies have found that the majority of customer complaints get through to Head Office.

Question 44

St.George Bank made a commitment to improving customer service.The program of improvements includes methods for creating opportunities while resolving complaints.One way St.George does this is by appropriately handling complaints from angry customers.What response does the bank teach employees to use when customers are angry?

A)Do not waste time with apologies.
B)Deal with the anger as well as the issue.
C)Keep the discussion focused on the issue, not emotions.
D)View complaints as a problem-an unwelcome 'moment of truth'.
E)Transfer an angry caller to other employees until the customer calms down.

Question 45

SOCAP has found that Australian firms are in the forefront of world best practice in the area.

Question 46

In the case of a low-involvement product, consumers often don't bother to complain because they feel that complaining will not achieve a satisfactory outcome.

Question 47

The more a consumer complains to organisations the more likely they are to know how to deal with the situation.

Question 48

Typical ways that customers cope with a negative service experience include confrontation, escape-avoidance, distancing and exercising self-restraint.

Question 49

When customers are embarrassed, they know the service failure is their fault, so the service provider avoids negative consequences.

Question 50

The cost of complaining is sometimes so high that it is easier for the consumer to defect to another supplier.

Question 51

Western customers are less likely to complain about service failures than their Eastern counterparts.

Question 52

Customer complaints can be a valuable source of information to a company.

Question 53

Customers are generally not aware of their rights and are unprepared to switch service providers.

Question 54

Customers who experience service failure but subsequently receive excellent service are frequently more satisfied than they were before the failure.

Question 55

How do fishbone diagrams help managers improve service quality?

A)By applying the 80/20 rule
B)By establishing a hybrid complaint-handling model
C)By detailing the causes and effects behind service problems
D)By identifying weak links in the service chain
E)By displaying performance over time against specific criteria

Question 56

Which of the following is a valid reason for managers to be concerned about effectively resolving consumer complaints?

A)Dissatisfied consumers tell more people about their complaint experience than those who were satisfied.
B)Australian consumers complain much less than consumers in the USA and Europe.
C)Research shows that most consumers who complain are satisfied with how the problem was resolved.
D)Consumers become more satisfied if their complaint travels up to the top of the company's hierarchy.
E)Most companies convince consumers that management is genuinely interested in receiving complaints.

Question 57

In terms of perceived fairness the three dimensions of justice-distributive, procedural and interactional-all play an important part.

Question 58

Dissatisfied customers always complain.

Question 59

What does Pareto analysis suggest about the causes of service failures?

A)About 20 per cent of possible causes will explain about 80 per cent of failures.
B)About 80 per cent of possible causes will explain about 20 per cent of failures.
C)Service problems often result from information failures, especially failure to communicate with customers.
D)Customers experience frontstage failures more directly than they experience backstage failures.
E)The causes of problems with service delivery arise at weak links in the service delivery chain.

Question 60

Dissatisfied customers often don't complain because they believe the organisation either won't do anything or they'll be sent on a wild goose chase.

Question 61

'It's not in the getting wrong; it's in the putting right.' Explain the significance of this statement to service recovery and customer satisfaction.

Question 62

The SOCAP study shows that Australia is lagging behind other countries in best practice methods for dealing with complaints.What methods would you use to develop a suitable program for a small to medium organisation? Would this differ from possible solutions in a larger organisation? Justify your answer.

Question 63

Customers are primarily concerned with fairness in the policies and procedures that form service recovery

Question 64

Research suggests that many dissatisfied customers never complain but simply defect to a competition.What are the management implications of this finding and how might managers try to minimise such defections?

Question 65

When dealing with complaints regarding poor service from Asian clients/customers, how would your approach differ from a similar complaint from a Western client?

Question 66

Discuss the issues which could arise with customers from a firm that relies solely on meeting its sales, financial and performance targets.

Question 67

Think about a time when you had to wait to receive a service-for example, a delayed flight, a medical or other appointment or a wait for a restaurant table on a busy night.Describe how you reacted to the situation, including your thoughts and feelings about what happened.How did you decide whether to complain? If you could have advised management and frontline employees on how to handle the situation, what would you have suggested?

Question 68

When faced with a customer complaint, service providers should take their time, gathering all information and consulting with colleagues, especially if compensation is requested.

Question 69

Blueprints, fishbone diagrams and control charts provide service firms with information as to the root causes of service failures.

Question 70

Explain the different options open to customers when they are unhappy with the service they received.If you were running an investment advisory business, which of the options would you prefer your unhappy customers pursue? Why?

Question 71

It is important to realise that the organisation needs to address the anger of the customer as well as the specific issue.

Question 72

Creating effective service recovery programs must be initiated and developed by senior management.

Question 73

Assume you own a small clothing boutique.Prepare employee guidelines for effective complaint resolution.

Question 74

The statement that 'complaints can be seen as an opportunity' seems to be a contradiction in terms.Do you agree with the statement and how would you use this opportunity if you were responsible for handling a breakdown in the reservations system of an airline company?

Question 75

Would the guidelines prepared in Question 3 be different if you owned multiple boutiques, spread across Australia? Would they be different if you were the Customer Service Manager for Qantas or Air New Zealand? If so, why? If not, why not?