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ABSTRACT
This research investigates how firms handle customers' complaints. We examine the fundamental question of how, or whether, firms respond to consumer complaints. Specifically, we examine services, as services present a unique challenge for marketers. The human element of service delivery creates many opportunities for failure. In this research we wanted to not only study complaint responses in the services industry, but also compare responses to published response rates to customer product complaints. Our examination, across a multitude of service industries, reveals response rates that are both low and slow. Our results are not encouraging. Service firms are clearly missing out on opportunities to repair problems and build relationships with their customers.
INTRODUCTION
There are many theoretical models that address consumer complaint behavior (Singh, 1988; Singh and Widing, 1991; Blodgett and Granbois, 1992; Boote, J. 1998). The ultimate goal of these models should be to benefit firms by providing knowledge about the attitudes and behaviors of current and future consumers. Firms who heed, and respond appropriately to, consumer complaints can increase satisfaction (Durvasula, Lyonski and Mehta 2001), ensure higher repurchase intentions (Halstead and Page, 1992) and prevent customers from switching (Fornell and Wernerfelt, 1987). A complaint provides the firm with the opportunity to change an annoyed customer into a loyal one (Hart, Heskett and Sasser 1990). Consumer complaints should be an invaluable source of information used to make strategic and tactical decisions (Kasouf et al, 1995) and develop a customer-focused culture (Plymire, 1991). While the aforementioned models provide a theoretical understanding of the consumer complaint behavior, the more fundamental question of how, or whether, firms respond to consumer complaints has received less attention. Of particular interest, is how service complaints are handled.
BACKGROUND
Services present a unique challenge for marketers because the opportunities for failures are greater. The people element of service delivery allows less control of the production process. The elements that separate services from products all represent potential areas for failure. Heterogeneity means that the friendly helpful employee in one encounter could be a rude and unhelpful in another encounter. Within and across employees and customers, service experiences can differ. Perishability of services means the ruined nights' stay at a hotel due to noisy neighbors can't be returned. Joint production and...