VTI – 2010Dr. Bård Tronvoll

How to take care of the customers: The need for a holistic service recovery system in public

transportation

Transport remains the number one problem sector for consumers, accounting for one third of complaints in EU

European Consumer Centres

Brussels, 3 August 2009

Under de senaste 12 månaderna, har du utfört ett formellt klagomål skriftligen, på telefon eller personligen till säljaren /

företaget om ett problem som du har upplevt

Source: Special Eurobarometer 298: Consumer protection in the internal market

Allmän kundtillfredsställelse avseende 19 tjänster och varor på marknaderna

Källa: IPSOS undersökningar om kundtillfredsställelse 2006 och 2008.

Theoretical background

• Service recovery was one of the earliest service areas to be addressed by marketing scholars because it introduced the elements of interactive customer experience, continuing customer relationship, and their long-term financial impact (Rust and Chung 2006).

• Service recovery benefits the company, as it positively influences customers’ expected utilities of a purchase, perceived purchase risk, customer perception of quality, and the generalisation of favourable word-of-mouth (Rust and Chung 2006).

• Indeed, Tax and Brown (1998) proposed that managing complaints well and recovery customers should be the cornerstone of an organizations overall customer strategy.

Theoretical background

• Customer recovery: The majority of the service recovery literature has taken a marketing view, focusing mainly on the impact on customer satisfaction and loyalty (Maxham 2001; McCollough and Gremler 2004).

• Process recovery: Spreng et al. (1996) have emphasised that the prime purpose of service recovery is to help drive improvement through the organisation. Such improvements of service recovery procedures can lead to cost reduction through the removal of inefficient and ineffective processes and to fewer failures in the future, and hence more satisfied customers.

• Employee recovery: Bowen and Johnston (1999) have suggested a internal service recovery/employee recovery to be important in the overall recovery process. They have revealed that it is vital for the organisation to support their employees in their difficult role of dealing with complaining customers.

• Recently have Johnston and Michel (2008) assembled the outcome of service recovery; customer, process and employee recoveries into the overall recovery strategy.

Network recovery

• A network is a composite of a large number of actors and the pattern of relationships is what tie them together (Iacobucci and Hopkins 1992).

• A business network can be defined as a set of two or more connected relationships, in which each exchange relation is between service providers that are conceptualised as collective actors (Emerson 1981).

• To be more precise, a value-creating network can be viewed as a service eco-system that is built upon loosely coupled value proposing social and economic actors interacting through institutions and technology (Lusch et al. 2009).

• A network service recovery adaption refers to the act of modifying the strategy, stance, posture or resources in order to enhance complementarily with partners (Pillai 2006).

Public transportation

• Public transportation is usually created in complex, human-based systems involving several actors.

• The more complex systems, the more actors involved in the service co-creation, the larger is the possibility for errors, mistakes or service failures to happen.

• Consequently, complex service systems need high attention to service recovery.

Levels of concerns

To expand the understanding and conceptualisation of service recovery we may use Johnston and Clark (2001) metaphor of different company’s levels of concerns. They suggest that service companies should be analysed from three standpoints:

i. Business-related concerns

ii. Operations-related concerns

iii. Encounter-related concerns

Customerrecovery

Employeerecovery

Networkrecovery

Processrecovery

The recovery diamond

Business

Serviceoperation

Serviceencounter

Service recoverylearning system

PTA

Entrp

Sub-entr

Responsibility for all public traffic within a geographic area and has 90 entrepreneurs

Buy lines from different entrepreneurs Have general interaction with the customer Handle the complaints from the customer

Handle the transportation Västtrafik is their customer Get complaints from customer

through Västtrafik (e-mail) Respond to problems and give

feedback to Västtrafik

Is contracted through one of Västtrafik’s entrepreneurs

Receive complaints through the entrepreneur

Get complaints from the entrepreneurs that is channelled through Västtrafik

Västtrafik

Göteborgs Spårvägar

Göteborgs-buss

Swebus Uddevalla Turisttrafik

Veolia Transport

(+ 86 entre-

preneurs)

Comments from an entrepreneur

• ” ... Vi får alltså kundsynpunkter sända till oss, men vi har sällan direktkontakt med resenärerna utan det är Västtrafik som har det. De ärenden som kommer till oss är av två olika slag. Det är kännedomsärenden och det är remisser. Remisser är sådana där kunden uttryckligen har önskat ett svar tillbaka på någonting, de vill ha en förklaring eller ursäkt. Då ser vi till att de får det, men det är fortfarande så att Västtrafik besvara kunden ...”

• ” ... arbetsledare åtgärder utifrån samtalen med föraren vad som behövs och sedan ger de ett svarsunderlag tillbaks till oss som vi kan besvara resenären. Eller rättare sagt, skicka vårt kompletta svar till Västtrafik som kan besvara kunden. Så det är ju lite lång gång kan man tycka. Men för Västtrafiks del är detta är oerhört mycket lättare för de har ju bara kontakt med oss då, bara kontakt med mig och min kollega på spårvägen. De behöver inte ringa till någon förman ute i något trafikområde eller så, utan det är vi som har den kontakten”

How complaints are been handled

PTA

Entrepreneur

Sub - entrepreneur

Send complaint

Send complaintFeedback

Feedback Contract

Contract

Answer the customer

Receive complaint

Summary

In addition to customer, process and employee recoveries there is also a need, in a complex human-based systems, for a network recovery system.

Service recovery has to be embedded in all levels of concerns within the company and therefore should also be included in the business level.A network recovery should focus on how actors can adapt to each other through a learning service recovery system

End quote

‘ When complaints are freely heard, deeply considered and speedily reformed, then is the utmost bound of civil liberty attained that wise men look for’

John Milton Areopagitica, 1644

’Når klagene er fritt hørt, seriøst vurdert og raskt ordnet, så er den ytterste grense for sivil frihet oppnådd, og som kloke menn ser etter’

Questions

Bård Tronvollbard.tronvoll@kau.seSAMOT