Perceived Fairness

Definition

Perceived fairness refers to the subjective judgment individuals make regarding the fairness of outcomes, processes, and interactions within service encounters. This concept is critical in shaping customer satisfaction and loyalty, as it influences how customers evaluate their experiences and whether they feel valued by a service provider. In service encounter management, ensuring perceived fairness can lead to stronger customer relationships and can mitigate negative feelings in situations where outcomes are less than ideal.

5 Must Know Facts For Your Next Test

1. Perceived fairness is influenced by three main factors: distributive fairness (outcomes), procedural fairness (processes), and interactional fairness (treatment).
2. High perceived fairness can lead to increased customer trust, loyalty, and word-of-mouth promotion.
3. Customers often assess fairness based on comparisons with other customers or previous experiences with the same service provider.
4. In situations of service failure, effective service recovery strategies can enhance perceived fairness and help retain customers.
5. Training employees in communication and conflict resolution can improve perceived fairness during service encounters, especially in challenging situations.

Review Questions

• How does perceived fairness influence customer loyalty in service encounters?
  • Perceived fairness significantly influences customer loyalty as customers who feel they are treated fairly are more likely to return and recommend the service to others. When customers believe that the outcomes they receive are justifiable and that the processes leading to those outcomes are transparent and respectful, they develop trust in the service provider. This trust fosters a positive emotional connection, making customers feel valued and appreciated, which ultimately enhances their loyalty.
• Discuss the role of interactional fairness in shaping a customer's experience during a service encounter.
  • Interactional fairness plays a crucial role in shaping a customer's experience by focusing on how they are treated during their interactions with service personnel. This includes factors like politeness, empathy, and respect shown by employees. When customers perceive that they are treated with kindness and consideration, even during challenging situations, it enhances their overall experience and can offset negative perceptions stemming from other areas such as procedural or distributive fairness. This reinforces the idea that positive interpersonal interactions can significantly impact customer satisfaction.
• Evaluate the strategies that service providers can implement to enhance perceived fairness during service recovery efforts.
  • To enhance perceived fairness during service recovery efforts, providers can adopt several key strategies. First, clear communication is vital; informing customers about what went wrong and the steps being taken to rectify the situation can foster trust. Second, offering compensation or remedial action that aligns with the severity of the issue demonstrates accountability and respect for the customer’s experience. Third, training staff to handle complaints empathetically allows for more personalized interactions that can alleviate frustration. Finally, soliciting customer feedback post-recovery can show commitment to improving services and reinforce their importance, thereby enhancing overall perceived fairness.

Related terms

Equity Theory: A psychological theory that suggests individuals assess fairness based on the ratio of their inputs (efforts, contributions) to outputs (rewards, benefits) compared to others.

Customer Satisfaction:

A measure of how products or services supplied by a company meet or surpass customer expectations.

Service Recovery: The actions taken by a service provider to rectify a service failure and restore customer satisfaction.