Net Loss from Service Loss

Breakthrough research has pinpointed the triggers of consumer anger when service failures occur, helping business come to grips with customer gripes.

The two-year study by UQ Business School Professor of Marketing Janet McColl-Kennedy found the way people felt they had been treated after an unsatisfactory interaction with an organisation, coupled with their overall assessment of a service provider's conduct, were critical triggers of negative feelings among customers.

"According to customers, not feeling respected made them feel ?like a number' and mere receptacles for company patter and for recorded messages," Professor McColl-Kennedy said.

"By itself, low levels of ?feeling respected' caused a 48 percent rise in negative emotion whereas customer perceptions of unfairness led to a 68 percent increase.

However, when the two factors were combined, negative emotions skyrocketed by a staggering 75 percent.

"Understanding these triggers will help organisations not only to avoid future service failures but to effectively recover from negative situations should they arise."

Her study found that if employees dealt with complaints quickly, tried to resolve perceived problems fairly and treated the consumer with respect and dignity, negative emotions were reduced by 100 percent.

"Some measures include simple things like putting a bit of effort into resolving the problem, checking details for the customer, involving a supervisor, being sympathetic and looking the customer in the eye," Professor McColl-Kennedy said.

"Business recognises the damage caused by dissatisfied customers to both reputation and sales through loss of repeat business or decreased custom and negative word-of-mouth ? it has been estimated that a dissatisfied customer will tell his or her story to around 11 other people kicking off a potentially disastrous domino effect."

Negative emotions experienced by customers range from mild frustration to overt rage.

These negative interactions or service failures can stem from the service itself, such as waiting too long; the wrong service being delivered; staff rudeness; or from the customer themselves, for example, the customer being too ill to take a prepaid holiday.

Australians tended to be less likely to complain about service failures than our British or American cousins, she said.

"Our tendency to be backward about coming forward is counterproductive as it does not give an organisation a chance to fi x problems," Professor McColl- Kennedy said.

Professor McColl-Kennedy's findings come from a wider UQ Business School training video project in which actors portray a variety of service interactions.

The videos, developed with the support of a major industry player, will also be used in her services marketing courses within the School, and for industry training.

More Information: http://www.business.uq.edu.au

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