Types of Complainers

Service Blog 3 – The Online Retailer

This post is one in a series of four written for my Services Marketing class at Camosun College. The series seeks to understand and evaluate personal service encounters by applying varying services marketing concepts and studies.

Service Provider Amazon.com Inc

Service Type Online Retail Services

Encounter Time and Date Tuesday May 22, 2012

Related Course Chapters Chapter 8, Service Recovery; Chapter 9, Service Development and Design; Chapter 10, Customer Designed Service Standards

Concepts Discussed Service Recovery, Service Recovery Effects, Types of Complainers, Service Improvements, Customer Actions, Standardization of Service Behaviours and Actions, Customer Defined Standards

Price of Service Free, built into the price of goods purchased: book and DVD totaling $15.43; Shipping and Handling 7.47

The Encounter

Service recovery is an organizations response to service failures; effective service recovery improves customer satisfaction and loyalty, word-of-mouth marketing, and overall company performance. Only nine percent of unhappy customers who don’t complain intend to repurchase from the company after a service failure. When customers do complain, that rate rises significantly. When consumers complain and the problem is NOT resolved, nineteen percent intend to repurchase. When the problem is solved, fifty-four percent intend to repurchase. When the problem is solved quickly, eighty-two percent say they will come back (Zeithaml, Bitner, Gremler, Mahaffey, & Hilts, 2012, p. 189). Effective service recovery is a huge part of customer retention; so, welcome complaints. Service recovery can only happen if the organization knows there was a service problem.

A benefit of adulthood is that if you want something of moderate cost, you buy it. Of course, this makes what to get you for your birthday a challenge for all but the most creative of your friends and family. Cash and gift cards quickly become the gift of choice. And so for my twenty-eighth birthday, my mother-in-law gave me a gift card for Amazon.ca to purchase an ebook for my Kindle. It was a thoughtful and flexible gift, or so we both thought.

Amazon.ca is the Canadian division of Amazon.com. Ecommerce regulations in Canada and the United States make operating a different division in Canada more cost effective for the organization. Additionally, as Peng, Jianwei, Hsien-Ming, Lina (2012) discovered, cultures vary in how they interact with ecommerce. Their research shows how the Chinese provide shorter, more negative reviews, offer fewer recommendations, and focus on different product specifications (p. 131). While Canada is not China, this does demonstrate the online customization necessary country to country. On Amazon.ca, many of the same books and products are still available, however others, such as the Kindle and its proprietary ebooks, are not. Canadians need to purchase those internationally from Amazon.com.

Amazon.com’s success in online retailing comes from its standardization of services, the combination of technology and improved work methods to deliver on customer expectations (Zeithaml et al., 2012, p. 250). There customer defined standards, as opposed to company defined standards which focus internally at profitability and efficiency, are focused on customer requirements and are visible and measureable to the customer. Focusing on customer values allows the company to focus resources on maximizing value for the customer (p. 252).

When I went to purchase my ebook from Amazon.com with my Amazon.ca gift card – you guessed it – it didn’t work. The fine print on the gift card clearly stated that the gift card was only valid towards purchases from Amazon.ca. Not wanting to waste time and effort contacting Amazon.ca (or Amazon.com – I’m not sure which division would have handled my complaint), I bought a movie and a hard copy book from Amazon.ca.

Complainers can be grouped into four categories: passives, voicers, irates, and activists. Mostly I am a passive. Passives are the least likely to complain to either the organization or to other consumers through word of mouth; they either doubt the effectiveness of complaining or it goes against personal values and norms. Voicers are likely to complain to the organization but not to other consumers; they believe complaining is likely to resolve the problem (Zeithaml et al., 2012, p. 195). Irates are more likely to complain to other consumers than to the organization; unlikely to give the provider a second chance, they switch providers and spread negative word-of-mouth actively. Activists are the most likely to complain to the organization and to other consumers; they believe all forms of complaining have positive results (p. 196). But again, if a customer doesn’t complain, the company cannot attempt service recovery.

A week later – I’ve always been impressed with Amazon.ca’s fast delivery – my hard copy book arrived by UPS. Unfortunately, while I thought I had ordered the regular full size version, I had instead purchased the miniature novelty edition no bigger than the palm of my hand. The book had cost seven dollars, and so I did not complain, read my miniature book, and made the most of what had a been a confusing and disappointing service encounter.

For Amazon.com, there is an opportunity for service improvement, the most common type of service innovation, which changes the features of a service already offered (Zeithaml et al., 2012, p. 224). Customer actions, “the steps, choices, activities, and interactions that the customer performs in the process of purchasing, consuming, and evaluating the service” (p. 229), are their responsibility, but helping them take the correct actions through prompts, reminders, and verifications can help minimize their mistakes resulting in fewer perceived service failures. Had Amazon.ca asked if I intended to purchase outside my normal purchase behaviour with a mini novelty book, my error could have been remedied. Had Amazon.com accepted gift cards across all divisions, we could have skipped the mini book altogether and stuck with my preferred digital format. But of course, had my mother-in-law and I been more careful to begin with, there would not have been a service failure at all.

Level of Satisfaction with this Encounter

from 1 (extremely dissatisfied) to 7 (extremely satisfied)

Reasons for Dissatisfaction

• Unnecessary restrictions on gift card use
• Wrong product delivered (even though it was my error)
• Service failure remains unresolved (even though I have not complained)

Likelihood to Go Back

from 1 (definitely not) to 7 (definitely yes)

As this service failure was largely created from ignorance of my mother-in-law to the restrictions of the gift card and my own ignorance to what I was actually buying, I am among the nine percent of customers who do not complain but plan to repurchase (Zeithaml, Bitner, Gremler, Mahaffey, & Hilts, 2012, p. 189). After all, a hard copy book of a smaller size instead of a digital book for my kindle is a tragedy the magnitude of a mosquito bite.

However, this encounter did increase my perceived risk in online commerce as a whole. Hamer (2011) describes how while sixty-six percent of internet users engage in ecommerce, that number would climb to seventy-seven percent if online shopping was more trusted. And this issue of trust includes concerns over purchasing the correct item and the ability to return defective or broken items (p. 84). In a brick-and-mortar location, one can physically examine a product to ensure its accuracy and the expectations and processes for returns and exchanges are well established. Therefore, while I am extremely likely to buy from Amazon.com again, I will do so more carefully as I now perceive the risks to be greater.

References

Hamer, L. O. (2011). Reducing Online Buyers’ Perceptions of Risk: A Study of Online Auctions. Services Marketing Quarterly, 32(2), 83-95. doi:10.1080/15332969.2011.557594 https://libsecure.camosun.bc.ca:2443/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=59754906&login.asp&site=bsi-live

Peng, H., Jianwei, L., Hsien-Ming, C., & Lina, Z. (2012). A CROSS-CULTURAL COMPARISON OF ONLINE CUSTOMER REVIEWS. Global Conference On Business & Finance Proceedings, 7(1), 122-133. Retrieved from https://libsecure.camosun.bc.ca:2443/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=73204569&login.asp&site=bsi-live

Zeithaml, V., Bitner, M., Gremler, D., Mahaffey, T., & Hiltz, B. (2012). Services Marketing: Marilyn Drews, Camosun College-Interurban, Business Administration [Digital copy]. United States of America: McGraw-Hill Create. vbk:9781121484245