'Service Recovery' Critical to Keeping Customers
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'Service Recovery' Critical to Keeping Customers

'Service Recovery' Critical to Keeping Customers

Every organization screws up regularly and probably every day. You have two choices. Focus on keeping the customer or let them defect.

Frederick Reichheld at Harvard Business Review has research that shows if you can reduce your defection rate by half you can double the growth of your business. If you can reduce the defection rate by 5% you can have profit swings of 25-100%.

To say ‘I am sorry’ is good customer service but it is not Service Recovery. When your company makes a mistake you have an opportunity to keep the customer or run for cover, lie, or put the blame on someone else. Your flight is delayed four hours. The gate agent says, “I am sorry.” How do you feel? Are you satisfied? Your family was expecting you at 3pm but now you will arrive at 7pm.

In the US, about 80% of employees lie and do anything possible to get rid of the customer. They know the customer will never remember who they talked to. They also prefer to avoid confrontation.

I can count on one hand all the times in my life I have heard an employee say, “I am sorry. I made a mistake and it’s all my fault.”

The 4 Service Recovery skills I teach are:

1. Act Quickly 

-The employees at the point of contact best implement Service Recovery

-Avoid moving problems and complaints up the chain of command

2. Take Responsibility

-Take responsibility no matter who is at fault (Don’t say it must have been accounting or sales that messed up)

-Sincerely apologize

-Don’t place blame

-Thank the customer for pointing out the problem

DON’T make excuses or lie to cover a mistake

DON’T point out a customer’s misunderstanding

DON’T pass the blame off to another employee or the organization

3. Be Empowered Make a fast decision in favor of the customer

-Gives those who work with customers the authority to do whatever it takes to ensure customer loyalty

-Empowerment is the backbone of service recovery

-Tells customers that you will put them first

4. Compensate Give the customer something of value

-Every organization has something of value it can give to a customer who has experienced a problem

-What does your organization manufacture, sell, or provide as a service that costs less than the value it has in the eyes of your customers?

Now the gate agent who has been trained on Service Recovery says, “Mr. Cain, I apologize, the flight has been delayed for four hours. Here is a coupon to access the business class lounge while you wait. There is food and drinks available for free in the lounge. In addition, I have added 15,000 miles to your account for your inconvenience.”

Now how do you feel?

Published: August 25th, 2021

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