Virgins Non Specific Service Recovery - Case Study Example

Business letter and literature summary The letter below is a response to a complaint that was written to Virgin by a disgruntled customer. The customer complained of several mistakes that he noticed with the services provided by the airlines during several flights. The response is written by the marketing manager of virgin as an acknowledgement of receiving the letter. It addresses the complaints of the customer and gives solutions to the problems that were experienced during the said occasions. Business Letter (Response) Marketing Manager, Virgin Atlantic, Dear Bill Bryce, REF: Response to ‘Mumbai to Heathrow 7th December 2008’ We at Virgin appreciate the fact that you love the brand and have continued to use it for a substantial period of time despite the concerns that you have been having over the past few years. This moves to show that you are really a loyal client and here at Virgin, the Customer comes first and is our most treasured asset. That is why it has been noted with a lot of concern that such incidences have been taking place right under the noses of the management team. After receiving your letter and reviewing the unfortunate incidence that you have undergone over the past few years, conclusive investigations were launched by the management team with the assistance of private investigators from a highly reputable company. All the issues that you raised regarding your experiences have been noted and the necessary action has been taken. First, we at Virgin would like to profusely and sincerely apologize for what you had to go through at the hands of our staff. It is totally unacceptable and against the principles and values of Virgin. Our corporate philosophy drives our members of staff to provide high quality services at all times. They have been trained on respecting the customer and serving them in the best possible way. A keen look at your experiences depicts the lack of professional standards and ethics among the members of Virgin staff who have been charged with the responsibility of serving you on those particular days. It portrays their ignorance and unprofessionalism to the greatest extent. A mere look at those foods is disheartening and disgusting, especially considering the fact that you had paid to receive high class service. The members of staff on duty on that fateful day were interrogated so that they could provide explanations as to why the services offered to the customers were like that. The interrogations found out that they had no concrete reasons for not following company policies. It was shear negligence on their part and consequential action had to be taken upon them. Those that were responsible for ensuring that customers receive presentable and high quality food were all fired and replaced with more competent and trained individuals who have been notified of the consequences of repeating such incidences. In regard to the clarity of the pictures on the screen, the technical team was also interrogated and the cause could not be immediately established. As a result, the company has installed new sets of screens on all its planes that have been designed on the basis of clarity and quality. The technical team responsible for ensuring that the screens produce high quality pictures is working hand in hand with the technical support staff from the company that manufactures the screens to ensure that technical hitches are prevented and dealt with whenever they occur. We would like to sincerely thank you for raising such concerns because you have brought light upon a problem that would probably remain unnoticed if not reported. As a result, the company has improved its customer care services to include the promotion of reporting or complaints services. These services will ensure that there are proper channel that customers can use to report any form of discontent that they may undergo under the hands of our staff. The management has been comfortable for a long time now because such incidences are never reported and we remain unaware of them. That is why we appreciate any effort that you put into reporting these matters because they will go a long way in helping us to improve our service delivery. There has also been the appointment of a service delivery manager who will oversee that such issues do not occur. The service delivery manager will be responsible for formulating and implementing the company’s service recovery policy. As part of our efforts to satisfy our customers, we feel that there is a dire need for you to be compensated. You have raised legitimate concerns since other passenger were also contacted and interviewed and it has been confirmed that you concerns are indeed true. You, together with all the other passenger that were in that flight who were displeased with the services will be compensated the full fare for that flight. Please report to any of our offices in person with you relevant identification so that you can be accorded the necessary assistance. Having paid that amount of money that you did, we believe that you need to get value for it and nothing less. That is why we will refund the money and ensure that in future, you will always get value for your money. Once more, we apologize for what you have had to go through at our airlines and we kindly ask you to continue using our services to notice the tremendous difference in our services. Please feel free to report any other incident that causes you displeasure while using our services and we will be quick to address them. Feel free to also tell us what you think we can do to improve our services so that they can suit your needs. Yours Sincerely Marketing Manager, Virgin. Report Table of Contents Business Letter (Response) 1 Executive Summary 6 Introduction 7 Recovery Policy 8 Satisfaction 8 Non-specific service recovery 10 Receptive and accommodating Attitude 15 Conclusion 15 References 16 Executive Summary The service sector is becoming increasingly important in satisfying the needs of consumers. The modern economy is making competition to get harder and harder, thus giving consumers a wider range of alternatives to choose from. The buying and selling of goods/products has been the main economic focus for many decades. This trend is however changing today because the economy is focusing more on the service sector. In many regions therefore, the service sector is now taking a greater place in the modern economy. The service sector is also contributing to the growth rate of the economy in many states and that is why the economies are becoming more service oriented. Being a provider of a service is therefore not an easy task since it involves taking a lot into account so as to deal with the complexities and hardships of the service sector. Introduction Having noted that the service sector is a great part of the economies of the world, the sector has seen great developments and improvements that have been brought as a result of competition in the market. This also requires companies to adequately deal with problems that may arise as a result of poor quality service. Most business advisors today support the opinion that a business should either strive to satisfy its customers or risk losing out on business. There is no room for businesses today to offer poor quality service and still survive in the market. This is as a result of the stiff competition that is being posed by key players in the industry to provide high quality services that are aimed at ensuring customer satisfaction. Most businesses today have realized the value of appreciating their customers. In any business, there are some challenges and issues that are bound to go wrong at some point during its operations. Being a service provider can be a very demanding undertaking (Hvitman & Ryler 2005). Most service providers set out to accomplish perfectionism in the services that they offer to their customers. However, this is not always the case. The service providers sometimes fail to accomplish the desired quality of services that they set out to achieve. Such a situation is professionally referred to as a service failure. There are numerous solutions that have been provided in various business literature to deal with such service failures. These solutions are professionally referred to as service recoveries. A service recovery measure may imply the use of various tactics that are all aimed at reassuring customers and retaining their loyalty (Hvitman & Ryler 2005). These tactics may include apologizing formally to the disgruntled customers, compensating the customers over their losses and offering other high quality services at no extra cost. Recovery Policy The action taken by Virgin to have a service recovery policy is strongly supported by various authors in different business literature. Having a service recovery policy is a step in the right direction for any company that experiences service failures once in a while during its operations. A service recovery policy provides information on how a company should act in case of a service failure situation. It provides guidelines and steps to be followed to adequately address a service failure situation. These guidelines and policies work towards ensuring that service failures are reduced in future and in case they occur, they are adequately dealt with so as to ensure that the customers remain loyal to the company despite the problem. The policy can also show the customers that the company is committed to dealing with service delivery problems as soon as they occur. This assurance also contributes to helping the customers to remain loyal to the company despite the few problems that may arise during their interactions (Hoccutt 2006). Satisfaction According to the European Institute of Public Administration (2008), satisfaction is always an important concern for organizations and customers. Satisfaction usually depends on a number of factors but it usually varies from one person to the next. The main concepts of satisfaction include value and quality (Robbins 2004). Value has been described as the importance that is attached to services in terms of how they are used and the amount of money paid for them in exchange. Quality on the other hand is concerned with the meeting of the unique expectations and needs of the customers. Satisfaction therefore involves the combination of quality and value with the aim of meeting the standards of both so as to ensure that customers are pleased with the kind of services that they receive. In reference to the case at Virgin, the management has taken steps towards ensuring that the quality of its services is of high standards. However, there have been bottlenecks along the way that have seen customers being dissatisfied with the services that they receive from the company. The customer who wrote the particular letter to complain of various issues brought a lot of misgivings to light. The quality of the food offered during the flight is seen to be deplorable and not worth the money that customers pay for it. In other words, it is not valuable in comparison to its cost (Jones 2007). That is why the company has taken steps to ensure that the quality of its food is improved to meet the standards and expectations of the customers. Customers who pay for any service will expect it to meet their expectations. Services therefore must be of high quality and value so that they customers are satisfied. If quality and value issues are not addressed, then satisfaction will definitely not be achieved (Kau 2006). The conducting of formal interviews with all concerned stakeholders in a company when trying to establish the cause of a problem and seek solutions to these problems is also supported by various authors in different literature. The interviews are used as methods to research on the exact nature of the problems, to get immediate solutions to these problems and to prevent them from happening again in future. In the case of Virgin, the marketing manager told the client that interviews had been conducted to interrogate the members of staff who were responsible for causing the service failures. The main aim of the interviews was to establish the reason behind the service failures. The interviews would provide first hand information concerning why certain problems were experienced and why customers had to go through such experiences. Through interviews, the personnel who were responsible for the service failures can be identified easily and the appropriate action taken against them. This is one of the surest methods of collecting first hand information about any particular issue (Craighead 2004). Various researchers have found out that there is a strong correlation between the degree of empowerment and the service recovery policy. If Virgin had a specific service recovery policy, then the degree of empowerment amongst its employees would be much lower. This means that the workers would not be in a position to make wrong choices in the course of carrying out their duties. Specific service recovery policies do not empower employees to the extent that they can choose to do whatever they please, even at the expense of the customers. In fact, with specific service delivery policies, employees have no power to joke around with their duties. The specific policy is used as a tool of directing the actions of the employees and they are all made aware of the consequences of going against any regulation that has been outlined in the policy. Such a policy generally makes the employees to adhere to the work ethic and act in accordance to the provisions made by the policy. They act as guides to employees’ conduct and therefore reduce the chances of the employees doing the absurd things that the ones at Virgin were involved in (Magnini 2007). Non-specific service recovery A non-specific service recovery policy on the other hand demands or gives the employees a high degree of empowerment. This means that such a policy creates a form of laxity among the workers of a company because there are no strict guidelines and policies that address the issue of service failures. When there are no specific service recovery policies, then employees have no specific sense of direction as they would have when there were specific service recovery policies. The case is the same with companies that have semi-formal service recovery policies or those that have no service recovery policies at all. In the case of semi-formal service recovery policies, the degree of empowerment would also be medium ((Hvitman & Ryler 2005)). Virgin therefore took a step in the right direction by investing in a service delivery manager who was charged with the responsibility of formulating a specific service recovery policy. The service delivery manager would also ensure that all the services provided to the clients are up to standard and they are of high quality. The service delivery department can work hand in hand with the quality assurance departments to ensure that the value of customers’ money is not wasted or taken for granted. Such a role within the company will involve checking whether the services provided are satisfactory to the customers. It is also the role of the service delivery manager to reduce the number of service failures that may occur in future (Thwaites 2006). Researches in the field of customer satisfaction seem to agree that competition in the business world is getting tougher and tougher, especially with the modern economies of the world. No company has room to provide poor quality services and survive in such a competitive environment. Most businesses are in fact striving to outdo each other through the quality of services that they provide to their customers. This is because most of the businesses have realized the importance of value and providing quality services to their customers. For this reason, customers can not contend with paying for poor quality and valueless services because they will feel shortchanged and swindled. In today’s modern economies, more and more customers are becoming steadily aware of their rights as consumers. They cannot therefore sit back and watch employees of certain companies take advantage of them by providing them with poor quality services. This explains why the disgruntled customer chose to take the least expected action and write to Sir Richard Branson himself about his concerns and experiences at his airlines. This letter has in fact received numerous accolades from many people across the world. It has even been voted the best complain letter of all times due to the nature of its presentation. For this reason therefore, companies and other businesses know that they have to provide quality services otherwise they will run out of business (Lorenzoni 2004). Virgin should have realized this early enough so that it could prevent such an incident from occurring. However, it has taken the right steps by taking customer satisfaction more seriously. The management should not have sat back and assumed that everything was well at the airplanes. It should have sought to find out whether the customers were satisfied with their service or not. By doing this, it would be in a position to correct the situation early enough and the whole world would not have had to know about their shortcomings in terms of the poor services that were reported by the customer. It has also been noticed by research that with the stiff competition in the service sector, customers now have a wide range of alternatives and varieties to choose from in terms of the services that they pay for. This therefore means that those companies or businesses that are keen on providing quality and value added services are more advantaged than the ones that do not check on quality. Customers will prefer paying for services that are valuable for their money and not any other. The companies that do not provide high quality services that are up-to-standard, then it risks being hated and avoided by customers who prefer going to companies that are keen on satisfying their quality and value requirements (Hvitman & Ryler 2005). It cannot be said that Virgin took no steps at ensuring that the customers were satisfied. In a company of its reputation, it is not expected that the customers will be disgruntled to such an extent. Such service failures come about at certain points in the history of a business. Surveys done on companies have proven that service failures are very common at certain points in a company’s history. They are sometimes unavoidable but with the right actions and prevention measures, they can be greatly reduced. The situation at Virgin is no different. Despite having put numerous measures in place to ensure customer satisfaction through the provision of high quality services, the company still failed to impress some customers. Critics of this scenario tend to claim that this was most probably caused by the fact that the company had fallen into a form of “comfort zone” and taken a back sit as things went wrong. Virgin is a highly respected company that is sure its customers are satisfied. This might have been the reason as to why it was not keen to ensure that customer satisfaction is maintained (McColl-Kennedy 2003). The complain letter by the customer served as a wake-up call to the company. The marketing manager was right to thank the customer and encourage him to always forward any complaints that he may have. This is a form of positive business criticism that helps a company have the real picture of what its customers think of it. It also helps a company be aware of its strengths and weaknesses. When aware of its weaknesses, it can be able to take the necessary steps to ensure that it deals with them. When aware of its strengths, it can capitalize on them, therefore remaining ahead of its competitors. It was also brought to the attention of the company the areas that it needed to improve so that it can retain its loyal customers. This steps are supported by various business literature that provide useful information about ways of satisfying customers. Virgin’s competitive power and survival all depend on the degree to which its customers are satisfied with its services. That is why it needs to pay particular attention to the satisfaction of its customers. Since Virgin and its competitors offer undifferentiated products to their customers, Virgin ought to ensure that its services are unique and satisfactory to the customers to such an extent that customers will choose it over the other airlines (Wirtz 2004). Customer compensation was also proposed among the corrective service recovery measures to be taken by Virgin. Compensating disgruntled customers is a sure way of winning their loyalty. For the customer to have taken his time to write the letter so as to air his complains, he must have really been dissatisfied with the service that he was given. He was not content with the value of the services that he received. He took time off to notify the management at Virgin about the way customers were being handled by the members of staff during their flights. The way the food was served moves to show that someone was definitely sleeping on their job. The customer therefore felt shortchanged because he had paid to receive high quality services which included the food that was served. The customer did not feel satisfied about the amount of money he had spent on the flight on to get such kind of services. He felt as though he had wasted his money. No customer should feel this about the services that they receive from a company, especially after having paid for them. This is because the company might lose such customers if they are displeased with the services that they receive. The company therefore did the right thing by choosing to compensate their customers who were not happy with the services that they received (Boshoff 2003). By doing this, the customers can get the feeling that the company had no intention of fleecing them by providing poor quality services that were below standards and below the expectations of the customers (Hou 2004). Receptive and accommodating Attitude The receptive and accommodating attitude that was adopted by Virgin after receiving complaints of such nature from the customer was commendable. Not very many individuals, groups or companies take criticism positively. Not very many companies or individuals use criticisms to improve themselves. Only the wise do. Virgin therefore was wise to take the criticism from the disgruntled customer positively and use it to correct its mistakes and ensure that they do not happen again. This was wise because the customers and other critics were waiting to see how the company would react upon receiving such news. The company also shows its willingness to correct its mistakes and reduce them from happening again in future. The accommodating nature that the complaints were received shows the company’s commitment to its customers and how it strives to ensure that quality and value are maintained. It also shows how much the company values its customers and is willing to take corrective measures against any form of customer dissatisfaction. By responding to the customer’s letter in an open and apologetic manner, the company shows that it did not mean to offer such low quality services that were below the expectations of the customers. It also encourages other customers to offer their opinions and suggestions that can be very useful in helping it to correct its mistakes. When customers are given the freedom to openly air their views, they feel the need to remain loyal to a company because it cares for them and wants to provide high quality services (Kanousi 2005). Conclusion In conclusion, the service sector is becoming more and more competitive. The modern economy is making competition to get harder and harder, thus giving consumers a wider range of alternatives to choose from. Service providers will receive numerous complaints from their customers because every customer is unique and has varied needs that need to be satisfied (Arnould 2005). The situation at Virgin was not any different. It involved a customer who was unhappy with the services that he had paid for at the airline. He chose to air his concerns and this enable the company to take the appropriate steps towards correcting the situation. Service failures are bound to happen every once in a while in any company. Service recovery however depends on the actions taken after the failure. Virgin took the right steps by ensuring that it responds to the letter by the customer so as to address his concerns. It was also very open about the actions it had taken concerning the matter and the solutions that it had put in place as a result of the customers being dissatisfied with the services they received at the hands of Virgin’s members of staff. 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