Service Complaint by a Virgin Airline Customer - Assignment Example

BUSINESS LETTER AND LITERATURE SUMMARY Introduction Success for modern firms and institutions in both manufacturing and service industries is hard earned. This is as a result of cut throat competition from rapidly developing organizations that competitively offer substitute products, increased buyer bargaining power fostered by easy access and retrieval of information and the mere fact that modern customers are more sophisticated and they are more aware of their importance in commerce and their rights and therefore, they are not hesitant in demanding for quality every time. This has meant that organizations no longer rely on having an efficient and effective managerial system to succeed but they have had to integrate effective leadership and management systems with allocation of valuable resources and identifying the changing needs, expectations and the rising demands of their customer and satisfying them accordingly. Identifying the needs, wants, expectations, demands, tastes and preferences of the customer, forms the basis for success for organizations as they are in better positions to design, produce and deliver their products and services that specifically address these needs (Kau & Wan-Yiun, 2006, p.101). When the needs of the customer are fully met, the customer is not only satisfied, but they do come back for purchase, recommend the product or service to others and they eventually become loyal customers. Consequently, this translates to healthy and effective relationships with the customer, increased volume of sales, enhanced market shares, increased profit margins, and enhanced sustainable competitiveness and achievement of the firm’s anticipated business outcomes. Be it as it may, customer service failures and excellent service recoveries are well known within the service industry. This forms the basis of this report which is a business letter to address a service complaint by a Virgin Airline customer. The complaint letter has been widely claimed on the internet to be the world’s best passenger complaint letter (Telegraph Media Group Ltd, 2009). The Business Letter Paul Dickinson, Marketing Manager, Virgin Atlantic Airlines Ltd, Crawley, West Sussex, England. Dear Mr. Bill Bryce, REF: SINCERE APOLOGY. As the marketing manager for Virgin Atlantic Airlines Ltd, I would like to acknowledge receipt of your complaint letter on our catering service during a flight from Mumbai to Heathrow 7th December 2008. As a company that reputes itself in offering the best for our customers whom we consider as our business partners, we sincerely are as much dismayed with the discomfort you experienced onboard our flight and sincerely offer our apology. I would first like to appreciate your candid honesty and more importantly, for your loyalty to the brand regardless of the service failure experienced. It is from your inputs and those of others, a brand such the Virgin Atlantic remains a competitive player in the airline industry since we are able to take to heart what our esteemed customers have to say and make necessarily changes in order to effectively and efficiently meet the travel and personal needs of our customers, on board our flights. Among the key problems that you have specifically indicated in detail, which you encountered include catering service delays, poor catering service delivery, and once the services were delivered they did not adequately meet your expectations, tastes, preference and needs. To ensure that you as our loyal customer do not have to go through another culinary journey of hell as you explicitly describes the experience, there are a number of changes we are implementing. The culinary presentation which you were presented with happens to be an award winning food which is a preference in our Indian routes, however, we do appreciate the fact that different customers have varied tastes and preferences and that is why plans are underway to provide diversity in terms of food and drinks served on board our flights. This is to ensure each customer’s needs and preferences are sufficiently met. By so doing, your needs, tastes and preferences in food and drinks will be met including those of other passengers. In order to resolve the issues of service delays and poor service deliveries, our human resource management has undertaken all our cabin crew through a mandatory and a comprehensive two weeks training on service delivery, service presentation and customer care. The crew will have now to participate in the training after every six months. In order to fully thank you for your insights and to show you that we really appreciate you as our loyal customer, from the directions of Virgin Atlantic’s Executive Director, Sir Richard Branson, we would like to invite you to our catering house in your own convenience to help our catering department to choose suitable foods and drinks on future Virgin flights. How else better to serve you than to incorporate your ideas and opinions in our decision making Mr. Bryce? It is not much, but the invitation is our humble way of showing you that you are valuable to us. We are looking forward to your continued insights and loyalty as we anticipate to making your travel safe, secure, luxurious, unique and better every time. Yours Sincerely, Paul Dickinson, Marketing Manager, Virgin Atlantic Airlines Ltd, Crawley, West Sussex, England. Literature Summary According to Hocutt et al. (2006, p. 199), service failures on negative service encounters happen when the services delivered falls short of the expectations of the customer. Customer complaints are some of the ways that firms and institutions are kept on their toes to ensure they provide quality the first time, every time and in all aspects of their business. Customer complaints are illustrations of what the organization is doing, which is not adequate; it does not have to be necessarily wrong, to effectively meet the needs, expectations and preferences of their customers. For one reason or another, an organization may fall short of producing and delivering the desired quality services or even products that suit their customers. In order to ensure there are less customer complaints and even to guarantee the offended customer still comes back for return purchasing and remain loyal, organizations need to not only know what the needs of their customers are , but also, they need to develop strong and effective relationships between their internal and external environments and adopt the right recovery strategies. Hocutt et al. (2006, p. 199) defines service recovery as the actions taken by the organization in response to a negative service encounter by the customer/ service failure. The author states that disgruntled customers are more likely to express their discontentment using negative word of mouth. Effectively and efficiently addressing the complaints made by the customer cannot be compromised or even ignored since a bad recommendation has the power to bring down a multinational firm especially with the speed with which bad news travel via advanced technology such as the internet and social networks. An illustration of how fast a customer complaint can move, and how strong an impact it can make is the above mentioned customer complaint to Virgin Atlantic which has been emailed globally, and considered world’s best passenger complaint letter. Implementing the right response has the power to not only satisfy the customer, but also enhance the loyalty, trust and confidence of customers. According to Hart et. al. (1990, p. 148) “a good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, create more goodwill than if things had gone smoothly in the first place”. According to Craighead et al. (2004, p.309) top management has the ability to completely destroy the loyalty, retention and satisfaction of customers if their responses to complaints on service failures are not aligned to the expectations of the complainant following awful experience. This means therefore, as a manager I need to efficiently identify customer segments in order to generate a suitable response that reduces the damage to the loyalty and satisfaction of the customer. This supports the reason why in the letter, I had to indicate that the menu provided was an award winning menu and a favourite to a particular segment of our market. In addition, I had to make the customer understand that we serve a diverse clientele with varied tastes and preferences and therefore, plans had been made to ensure there was diversity in terms of foods and drinks served. This does not only help restore loyalty of the customer but also, assure others who read the complaint that the food served was not sub standard, it was only not the preference for this particular customer. As Andreassen (2000, p.156) indicates, there are varied variables that are precursors to recovery efforts and influence the satisfaction and loyalty of the customer post event. They include the loyalty of the customer prior to the bad service experience, the expectations of the customer influenced by previous experiences and available information, customer’s perception of quality, severity of service failures and service guarantees as supported by Craighead et al. (2004, p.311). These variables forms the basis of the solutions provided to respond to the problems cited in the complaint to Virgin Atlantic. Mr. Bryce as the complainant was a loyal customer which is illustrated by the continued use of the airline despite the negative service encounter. Since the customer had had better catering and flight services using the airline and was equipped with knowledge on what the airline offers based on comments he made, the expectations for quality services were high, which would have influenced his tastes. Since service guarantees permit firms to design their service systems and processes better, amend their errors in delivering service, restore and enhance customer loyalty, the suggestion for the customer to join in and participate in selecting the menu for future flights was in good taste. It would not only help in satisfying the customers, since he would be part of the decision making process of what he considers fit for his tastes and expectations, but also, foster loyalty since, complaints are effectively and efficiently addressed and so the customer has the faith in us that if things were to go wrong in the future, we can be trusted to make take the right actions. There are numerous ways that firms can respond to customer complaints and help in recovering their loyalty and enhancing their satisfaction which includes apologizing, indicating sincerity, providing value addition to the customer, efficient and independent customer care service, identifying problems, contacting the complainant to try and resolve the problem and efficiently addressing the problem when it is established. The strategies I took as a marketing manager include apologizing, being sincere, adding value to the customer by seeking his inputs in selecting future menus to safeguard against future negative service encounters and identifying the problems and effectively and efficiently addressing them. For each of the problems identified that is, catering service delays, poor catering service delivery, and services that did not adequately meet the expectations, tastes, preference and needs of the customer, solutions were established for each. Hocutt et al. (2006, p. 199) highlight that customers are more likely to be highly satisfied and have low negative word of mouth intentions when there is high responsiveness and courtesy from the management and when they are offered tangible rewards. This is clearly illustrated in the letter where, the tone used is not only apologetic but is courteous to Mr. Bryce. The constant gratitude and mention of Mr. Bryce as a loyal and valuable customer is meant as a courteous remark. The specific solutions to specific problems not only illustrate the attention the airline has to details but also, the commitment it has to ensure loyalty and customer satisfaction. The invitation which can be translated as a job offer is the appropriate form of service guarantee for this service failure. Since, it will not only resolve the problem, but will foster customer loyalty. Offering his flight fee back or offering him a free air ticket seems so impersonal and insincere compared to the recovery strategy implemented. As noted by Hart et al. (1990, p.148), during delivery of services, it is inevitable to develop service errors, or for them to occur, but it is not inevitable to have dissatisfied customer, since they have the potential to ruin the business if the management fails to implement the right recovery solution for specific situations. However, the author indicates that this does not have to be the case. Craighead et al. (2004, p.307) suggests that firms identify varied areas where service failure may occur and establish specific responses or solutions for each failure. This is because, adopting the right responses and recovery strategies is critical to restoring and retaining the confidence and loyalty of the customer. An important note to remember is that the effectiveness of recovery efforts and the evaluation of the quality of service are predominantly based on the perceptions of the customer. However, the firm should be cautious on the recovery attempts it makes since customers are not only varied but also have divergent definition of service failure and have different perceptions of recovery strategies, which necessitates customer segmentation following negative service encounters to ensure loyalty from all and satisfaction for all as supported by Craighead et al. (2004, p.322). Since, an attempt to restore the loyalty of one customer, the firm may lose another. Another aspect that influenced the airline’s action to offer Mr. Bryce an invitation is the impact of the service recovery paradox. Michel & Meuter (2003, p.3) defines service recovery paradox as situations where the satisfaction levels of customers, the word of mouth intentions, loyalty and the rates of repurchase of recovered customers surpasses those of customers who have not encountered service failures with the initial service. This approach is advocated by Etzel and Silverman (1981, p. 128), who highlighted that “It may be those who experience the gracious and efficient handling of a complaint who become a company’s best customer.” By offering Mr. Bryce the invitation, we offered him a unique response as opposed to the usual responses taken by airlines such as merely giving an apology and offering gift packs and free tickets. The response did not seek to meet his expectation and generate customer satisfaction, but it sought to exceed them significantly. Nevertheless, relying on service response paradox is not efficient to retain loyalty and foster customer satisfaction as noted by Kau & Wan-Yiun (2006, p. 101). Kau & Wan-Yiun (2006, p. 101) cites that customers who are initially satisfied with the service are more likely to express more trust , loyalty, and positive word of mouth in contrast to the recovered customers. Therefore, the other responses implemented are meant to enhance customer satisfaction and loyalty for all customers inclusive of the initially satisfied customers and the disgruntled ones. The response attempt of taking the Airline cabin crew through a mandatory and comprehensive two weeks training on service delivery, service presentation and customer care service, which would be carried every half an year, is based on the need to incorporate every individual in the firm in delivering quality service thus, satisfying the customer and retaining their loyalty. Through the training, the cabin crews who present the service to the customer are equipped with the skills, knowledge, motivation and authority to facilitate service recoveries and prevent service failures such as service delays and poor service deliveries. Parasuraman (2006, p. 592) supports this by saying that every employee in an organization should be equipped with service recovery skills and competence and the management should integrate service recovery systems in the firm’s operation framework as a means of modelling opportunities in service recovery. According to Lewis & Mccann (200, p.7), a complaint by a customer is a chance to regain goodwill, develop stronger correlations and enhance the firm’s procedures for handling customer’s complaints. The author implies that, there should be a protocol developed and implemented to ensure consistency and credibility in responses offered. For this reason, before the letter was compiled, there are steps that were taken into considerations which include logging or recording the compliant in the firm’s complaint records within the Marketing department. This was followed by a thorough investigation to establish the source of service failures and development of effective responses efficiently. In addition, consultations among the concerned personnel was done to establish the right actions to take especially in regards to compensation in a bid to make amends with the disgruntled customer and hence, restore loyalty, confidence and meet customer’s needs. After the letter has been delivered to the customer, it is expected that a follow up will be done to assess if Mr. Bryce was satisfied with the service response and assess his perceptions on how the complaint was addressed. Based on suggestions made by Maxham & Netemeyer (2002, p.248), firms and institutions should not merely focus their service responses on distributive justice which is characterized by giving complaining customers refunds and discounts, but they should give emphasis to procedural and interactional justice which are characterized by objective procedures and policies accompanying recovery process and fairness in relation to customer’s interactions with service provider during recovery process respectively, in order to derive overall firm or institution satisfaction and influence purchase intent as supported by Rust et al. (2004, p.109). In my case scenario, this has been illustrated by the efficiency and flexibility with which the complaint has been handled, as the customer does not have to endure long waits to see results of his complaint. There are elements that Craighead et al. (2004, p.311) proposes to constitute an effective service response strategy which constitutes transparency and sincerity on the part of the service provider, fairness which entails addressing the complaint with objectivity and even handedness when handling complaining customers, efficiency in identifying the problem areas and developing effective solutions and accountability where the service provider takes ownership of the service failures and implement favourable solutions. The service response strategy adopted by the Airline is characterized by sincerity demonstrated by the willingness of the firm to resolve the service failures, by not denying that the service failures are existent, fostering impartiality by refusing to argue with the customer on who is right or wrong, taking ownership of the blame and developing effective and efficient ways of addressing the problem which not only serve to meet the needs of the customer but also, those of the Airline. Although firms and institutions should put in place effective and adequate service response systems as integral elements of the firm’s operations, it is of more importance to ensure there are minimal or no service failures or negative service encounters that occur. This is because, once a customer has had a bad experience, the probability of them forgetting ultimately is fifty-fifty. This is supported by the research findings by McCollough, Berry and Yadav (2000, p. 121). According to the study, the satisfaction and loyalty of customers is relatively low after a negative service encounter, despite a comprehensive and a high recovery performance by the service provider compared with provision of quality, value added, and error free services. In addition, the findings from the study demonstrate that firms and institutions fare relatively well in the perceptions of customers if they continuously offer error-free services. This therefore means, firms and institutions should invest and focus more on preventive service response measures than restorative service response interventions. The implications of delighting the customer through high recovery performance by service providers is not only a loyal, trusting and satisfied customer, but also, a customer with higher expectations, which makes it either more costly or hard to meet the expectations or satisfy the customer in the subsequent purchases, which hurts the service provider in the long run. Be it as it may, lack of response strategies or implementation of sub –standard service response measures does more harm than good to the service provider compared if they went a head and ‘delighted’ or complied with the customer’s needs and expectations. According to Rust and Oliver (2000, p. 86), despite the impact of delighting the customer which includes increased customer expectations during return purchases which makes it more hard to meet them, the downsize to non delighting the customers is worse as customers are more likely to shift brands or service providers that delights them. This translates to reduced profit margins, decreasing market share and diminished customer loyalty, which rounds off to death of businesses. Nevertheless, the author indicates that delighting customers has a counter effect where the customer may forget the delighting incidents and thus, refuse to shift to delighting service providers. Therefore as a firm, we delight our customers and incorporate it with quality service delivery that is error-free. This means we provide quality services all the time and if a customer is dissatisfied, we are not afraid to address the concerns raised and further foster increased loyalty and repurchasing. Conclusion The customer is a vital entity to a business and lack of them means death to the business. Therefore, when customers complain, organizations have no option but to listen, identify source of problems, implement recovery plans and thus, effectively and efficiently meet the changing needs, rising demands and the varied tastes, expectations and preferences of the customer. Developing effective response measures is critical to restoring loyalty and trust, exceedingly meeting the expectations and satisfying the needs of the customer who have had a negative service encounter. References Andreassen T.W. 2000. Antecedents of Satisfaction with Service Recovery. European Journal of Marketing, vol. 34, no. 1/2, pp. 156-175 Craighead, C. W., Karwan, K. R. & Miller, J. L. 2004. The Effects of Severity of Failure and Customer Loyalty on Service Recovery Strategies. Production and Operations Management, vol. 13, pp. 307-322. Etzel M.J. & Silverman B.I. 1981. A Managerial Perspective on Directions for Retail Customer Dissatisfaction Research. Journal of Retailing, vol. 57, pp. 124-136 Hart C.W.L., Heskett J.L. and Sasser W.E.J. 1990. The Profitable Art of Service Recovery. Harvard Business Review, vol. 68, pp. 148-156 Hocutt, M. A., Bowers, M. R. & Donavan, D. T. 2006. The art of service recovery: fact or fiction? The Journal of Services Marketing, vol. 20, pp. 199-207 Kau, A.-K. & Wan-Yiun Loh, E. 2006. The effects of service recovery on consumer satisfaction: a comparison between complainants and non-complainants. The Journal of Services Marketing, vol. 20, pp. 101-111. Lewis, B. R. & Mccann, P. 2004.Service failure and recovery: evidence from the hotel industry. International Journal of Contemporary Hospitality Management, vol. 16, pp. 6-17. Magnini, V. P., Ford, J. B., Markowski, E. P. & Honeycutt, J. E. D. 2007. The service recovery paradox: justifiable theory or smouldering myth? 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