“Service failures are inevitable in service-based industries,” Dr Yang says. “But how organisations respond to them can make all the difference to customer satisfaction and long-term profitability.”
Up to 70% of customers who experience a service failure will do business with the company again if the failure is effectively resolved.
And while ethical leadership – the ability of a manager to balance the customer’s best interests with a company's financial health – often supports employees to successfully handle customer complaints, Dr Yang has found that it is teamwork that makes the most difference.
“Companies that promote teamwork see much better results in this space, because employees share knowledge and rely on one another to negotiate the more challenging customer interactions.”
Dr Yang says her findings have the potential to change the way that businesses think about leadership and handling customer complaints.
“Businesses should encourage teamwork and knowledge-sharing to improve problem-solving and reward employees for their efforts in recovery.”
“By moving away from rigid rules and empowering teams, companies can create faster and more customer-friendly recovery processes where employees feel supported, not restricted.”
