Customer Service - Yield Management and Customer Complaints

process of allocating the right type of capacity to the right kind of customer at the right price so at maximize revenue or yield

yield = actual revenue / potential revenue

actual revenue = actual capacity used x average actual price

total capacity x maximum price

- pricing strategies to maximize yield
- concept of opportunity cost
- sophisticated statistical tool for forecasting demand and price elasticity needed

style of appearance of the physical surroundings and other experiental elements encountered by the customer at service-delivery sites

- servicescape
- other tangibles

- establishes distinctive image and unique positioning
- grabs ppl's attention
- creates moods/mindsets that facilitate service experience/encounter
- affects customers' service quality perception

The revenue per actual room (RevPAR) decreased as number of defects in a hotel increased

stronger impacts were found in guest rooms, exterior of the building and the guest bathrooms

characteristics of the environment pertaining to the 5 senses:
- music
- scent
- colour
- temperature

- induce positive affective sales
- activate related concepts
- influence's ppl's behaviour
- promotes right customer selection
- create certain mindsets
- decrease vandalism

- ppl prefer scented environements
- gamblers spend more
- ppl more willing to buy NIKE with floral

the higher the prices, the lower the temperature

- take some form of public action
- take some form of private action
- take no action

- complain to the firm
- complain to a third party
- take legal action

Defect (switch providers)
negative word of mouth

- obtain compensation from a monetary loss
- vent their anger
- help to improve their service

- probability of successful handling
- worthwhileness of complaints

5 to 10%

- convenience and easy access
- direct solicit of complaints
- incentives
- management by wandering about
- employee empowerment / reward

- distributive justice
(perceived fairness of outcome)

- procedural justice
(perceived fairness of company policies and practices)

- interactional justice
(behaviour of firm's employee in resolution of complaint)

process that:
- indentifies service failures
- effectively resolves customer problems
- classify their root causes
- yields data that can be integrated with other measure of performance to assess and improve the service system

- opportunity to resotre customer satisfaction and reinforce customer loyalty

- opportunity to communication firm's commitement to customers and strengthen the bond

opportunity to restore cust satisfaction and reinfore cust loyalty

those who experience a service failure that is satisfactorily resolved are more likely to make future purchases than customers without problems

- invisiblity of unhappy customers
- cost of fixing mistakes
- weakened reliability
- customer defection after service recovery
- updated customer expectation for future performance
- reduced tolerance zone for the mistakes in the same category

- do it right the first itme
- welcome and encourage complaints
- act quickly
- provide adequate explanations
- treat customers fairly
- learn from recovery experiences

- positive
(cognitive, occurs when asked)

- negative
(emotional, occurs voluntarily soon after service failure)

- commitment and consistency (cialdini)

- strengthens beliefs and attitude

writing a detailed review makes evalutations regress toward the center

positive become less positive, negative become less negative

Comes from retaliatory feelings consumers feel toward a firm after an extremely negative experience

- take legal action
- spread negative word of mouth
- switch brands

how does a consumer vengeance affect subsequent choice bahaviours?

tend to switch to number one rival, even with suboptimal choices

- force firms to focus on what customers want
- set clear standards
- highlight cost of service failures
- require systems to get and act on customer feedback
- promote customers to complaint and let the firm know about their service experience
- accumulate information
- reduce perceived risk of purchase