Service Recovery Paradox in B2B: Why Dispute Management Matters

In the dynamic B2B landscape, maintaining strong customer relationships is crucial. The Service Recovery Paradox highlights how resolving disputes effectively can enhance customer loyalty. Learn why integrating dispute management into AR automation is essential for building trust and satisfaction.

In today’s age of B2B relationships where the duration of the relationship is critical, Service Recovery Paradox plays a pivotal role. The Service Recovery Paradox occurs when a customer thinks highly of a company after it has corrected a problem, compared to, if no problem had occurred at all. So, though the first preference for any supplier is to prevent issues in the first place, however in case same has occurred then the best solution is to resolve the issue(s) effectively and timely.

1.       Many a times a customer raises an issue only when the invoice gets submitted and when the AR team tries to connect with the customer. Say for example, Supplier X has sold an MRI machine of Rs. 7 crores to City Hospital. Now the Account receivables team of Supplier X raises an invoice for the MRI machine and submits it to the Accounts Payable team of City Hospital. The Accounts Payable team, in turn, will ask for an NOC from the Biomedical Engineering Department (BMET). Now in case the BMET doesn’t give the NOC and raises an issue that the machine is faulty then the invoice goes on hold and Supplier X must send service engineer(s) to resolve the issue. Now here in lies the challenge. Without the presence of a Dispute Management Module in AR, the supplier has a multipronged challenge at hand. Firstly, the invoice gets stuck and secondly the supplier-customer relationship goes south, in case the issue doesn’t get resolved quickly.

 

Read full Article: https://inebura.com/blog/service-recovery-paradox-in-b2b-the-relevance-of-dispute-management-modules-in-ar-automation

 

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