Service Recovery – How Well Do You Respond to a Bad Customer Experience?

Great customer service is the cornerstone of any successful business. Knowing who the customers are, what they want and exceeding their expectations is the key to business growth. Unless an organization understands this very basic principle, they will have a difficult time achieving desired results.

Service Recovery is a theory that suggests that a customer who has a bad experience and receives a prompt, effective response to their issues, will be a more loyal customer than a customer who had no bad experience at all.

The reason for this is, a bad experience provides an organization the opportunity to demonstrate how valuable the customer is. Most organizations have some sort of customer service but poor customer service is common in many organizations. It stems from poor training, ineffective performance management and having the wrong people in critical positions.

We all have stories to tell about a bad customer service experience. In fact bad service is so common place that we often accept it and try to find places to do business with that are the best of the worst.

All organizations, no matter how well trained their employees are, or how technical their systems are, have times when something goes wrong. It is at these times when an organization can take a negative experience and turn it into a great experience.  This is why it is critical to have a good Service Recovery process in place.

Successful organizations train employees on what to do in these situations and when there is a service breakdown, employees are empowered to respond quickly to make good on the situation with the customer.

As an example, some companies give their employees a certain dollar amount that they can use to fix a problem for a customer, no questions asked. You see this a lot in the hospitality industry. The finer hotels have customer service representatives at the counter who are empowered to handle small customer issues. The Ritz Carlton is a classic example of this.

service-recoveryA personal example of service recovery for me was with a dry cleaners close to our home.  The counter staff were friendly and the cleaning was fine. We went years without incident and then one time I took a table cloth there to be cleaned. It wasn’t a very expensive table cloth but I sent it to the cleaners because I was afraid of shrinking it. Well guess what?  When I got it back from the cleaners it had shrunk. My husband mentioned it the next time he went to the cleaners and they immediately asked what we paid for the table cloth and reimbursed him, no questions asked. Now that is service recovery!

We were pretty impressed with this since we didn’t really expect him to believe us much less respond. Then a few years later we moved about seven miles away to a new neighborhood with three dry cleaners within a mile from our house. We told the cleaners we had moved and would probably find a dry cleaners closer to our house and he offered to give us a 20% discount if we would make the drive. We agreed and make the drive every couple of weeks not only because of the discount but because we now know he values us as customers and he will take care of us if an issue does arise. He has gained our trust and our loyalty. This is critical to thriving organizations!

Other Thoughts on Service Recovery:

  • There will be people who figure the system out and try to work it. I worked for a man who would try to find things to complain about when he traveled so he would get free hotel nights.
  • Create a process for dealing with complaints.
  • Some people are more gifted at working with people and communicating than others. Hire selectively.
  • Training is critical and key to the success of a service recovery program and needs to be demonstrated by management.
  • Some people will never be satisfied no matter what you do and often it is driven from issues well beyond your service breakdown.

Customers are the revenue engine in every organization and need to be recognized as such.  Businesses who embrace this and respond to customer issues will always be more successful than those that do not.

Do you have a service recovery process?

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article originally published January, 13, 2010.