Service Recovery—Use it and You will Have Customers Who are Loyal for Life

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Service recovery is taking a customer from hell to heaven in 60 seconds or less. When your organization makes a mistake you must apologize and then give them something of value to compensate for the error. This is advanced customer service for the firms who want world class customer service.

Service recovery is a foreign concept to many businesses. They don’t understand it, so they don’t practice it. As a result, they are struggling to survive.

Simply put, service recovery is putting a smile on a customer’s face after you’ve made a mistake. It’s solving a customer’s problem or complaint and sending him out the door feeling as if he’s just done business with the greatest company on earth. It is bringing a customer back from the brink of defection—and doing so in 60 seconds or less.

Service recovery is the step that should follow a mistake. You must apologize, take responsibility for the error or the inconvenience, and give the customer something of value as compensation, something that says, “We value you as a customer and want you to continue to do business with us.” What product or service can you give that will cost you little or nothing but that has value in the eyes of your customers? A hotel can upgrade a disgruntled guest to a suite. A restaurant can give offer a free appetizer. A cell phone company can offer 500 free minutes.

Advertising is aimed at the masses; service recovery is aimed at the individual. Put another way, advertising will bring a customer to you—once. It is the customer experience that will bring him back to you. That experience must include service recovery. Why? Because every company—no matter how excellent their products or employees—occasionally makes a mistake. Show me a company that has never made a mistake in serving a customer, and I’ll show you a company that is in deep denial.

When you effectively practice service recovery, you are creating a customer who will be so satisfied that she will tell anyone who will listen about the wonderful service your company provided her. Nothing is as powerful as a personal recommendation from a satisfied customer. Service recovery—solving a customer’s problem and sending him away singing your praises—creates word-of-mouth advertising that is 10 times more powerful than advertising—and 20 times cheaper. With service recovery, you can turn an angry customer, who will bad mouth your company to everyone and anyone who will listen, into a loyal customer who will spread the word about your wonderful service and who will return to you time and time again.

Service recovery will put you and your organization ahead of the competition. It will prevent customer defection, which will increase your sales and profits. It also will prevent employee defection. When employees are trained in customer service and are empowered to make decisions that will satisfy their customers, they are happier in their jobs. With service recovery, your customers—and your employees—wouldn’t dream of leaving you.

What separates service leaders from the rest of the pack is how they respond to mistakes. They will do whatever it takes to solve a customer’s problem—and take that customer from hell to heaven in 60 seconds or less. They understand the importance of service recovery to their bottom lines. Service leaders—like Amazon, Dell, Vail Resorts, Delta Dental, Southwest Airlines, General Electric, Commerce Bank, and Land’s End—have mastered the critical elements that drive a service-focused business.

-They drive superior customer service strategically. That means everyone, from the CEO on down, walks the talk and reinforces the importance of customer service.

-They make sure their policies, procedures, and systems are customer-friendly, ranging from the hours the company is open to the rules governing customer payments.

-They hire good people and treat them well, investing time and money to train and coach them in the art of customer service.

-They empower their employees, giving them the authority to bend and break the rules, to use their common sense, to take care of the customer.

Those companies understand that empowerment is the backbone of service recovery. Employees must have the authority to do whatever it takes, on the spot, to take care of a customer to that customer’s satisfaction—not to the satisfaction of the company. Most executives believe their employees are empowered. And most employees would agree—as long as they follow the policies and procedures set forth by the company. What that means is that there really is no empowerment.

Empowerment is a difficult concept for many bureaucrats to introduce. They would much rather institute policies and procedures that eliminate the need for employees to make decisions about how to serve the customer. What they don’t realize is that those policies and procedures prevent employees from doing their jobs well and providing the type of service that will keep customers coming back to do business with the company.

If you want to be a service leader and retain your customers, you must eliminate policies and procedures that prevent employees from effectively serving the customer. Then you must create specific procedures around service recovery that force employees to handle customer complaints effectively. By doing so you will create a loyal customer base—and a bottom line—that will be the envy of your competitors.

John Tschohl is an international service strategist and speaker. Described by Time and Entrepreneur magazines as a customer service guru, he has written several books on customer service, including e-Service, Achieving Excellence Through Customer Service, The Customer is Boss, and Ca$hing In: Make More Money, Get a Promotion, Love Your Job. John also has developed more than 26 customer service training programs that have been distributed and presented throughout the world. His bimonthly strategic newsletter is available online at no charge.

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John Tschohl