Ask The Expert: Article

Q: Why is service recovery important and how can my company excel at it?
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Recent airline industry events point to the fact that CEOs need to know how to say “I’m sorry” at the appropriate time and in the appropriate tone. And, it’s not just the CEO that must exercise this sensitivity.  With service recovery, frontline employees play a critical role and must be well-equipped with skills and resources. Although providing consistent quality service is optimal for building and deepening customer relationships, when a mistake is made, well-performed service recovery can protect valued relationships. In some cases, it may actually increase customer loyalty.

Naturally, service failures diminish the trust customers have for a company and reduce their desire to give the company their time and business. However, a strong effort to resolve customer complaints can result in a recovery that prevents customers from switching to competitors. In fact, some studies have shown that after a high recovery effort, customer satisfaction is greater than prior to the service failure—a phenomenon known as the service recovery paradox.

[1]

That is not to say recovering from service failures is more impactful on a company’s customer base than providing consistent quality service. Indeed, a key driver of customer loyalty is the absence of a significant negative event.[2] Yet, since attaining 100% service success is highly unlikely, building and executing on a strong service recovery strategy makes good sense.

Managers seeking to improve organizational capabilities related to service recovery should train and arm frontline employees with resources to take four critical steps immediately upon recognizing a service failure: 1) apologize, 2) listen, 3) resolve and follow up, and 4) document.

Acknowledging a mistake has been made and apologizing for it can reassure a frustrated customer and calm the situation. Customers want to know the company is on their side, so taking responsibility for the failure and showing customers the employee and company care about their well-being puts employees in a better orientation for solving problems and gaining back trust and loyalty. Some employees will resist, not wanting to say “I’m sorry” for something they didn’t do.  What they need to understand, and what managers need to explain, is that an employee can always “feel sorry” that a customer is experiencing distress, regardless of the cause of the distress. An apology should be seen as a sign of maturity and empathy; it is not always an admission of fault. Frontline employees should also recognize that they are the face of the company and that management counts on them to provide an apology on behalf of the organization.

Good service recovery is about making customers feel heard. Upset customers can find sharing their frustrations stressful and difficult, so allowing them to fully express their concerns, and listening attentively and empathetically while they speak, gives them the chance to be heard and gives the employee the opportunity to patiently process what is being said. Employees should not blame customers or pass judgment on what they say, but rather show appreciation for the information. It is always better to hear these things directly than to read about them in an angry social media post. Recapping the customer’s complaints will show that the employee heard him or her correctly, and opens up the conversation to allow the employee to find a resolution.

Seeing the problem through to a satisfactory resolution is the key to a good service recovery, and employees should be encouraged to use all available resources to address service shortfalls. Solving the problem quickly mitigates the chance of escalation. Employees must be empowered to make full use of available tools and to make exceptions to rules when needed.

Key success factors for empowering the frontline include 1) equipping them with the right knowledge and skills, 2) providing them with the appropriate resources and/or budget (e.g., to compensate a wronged customer), and 3) loosening the reins to allow for creativity in leveraging available resources to reach a satisfactory resolution. Empowerment requires multilevel management commitment, from communicating consistent policies to training and providing a reasonable level of oversight.

After resolving a customer issue, employees can follow up with a note or call, a simple but often overlooked courtesy that reinforces the customer’s importance to the company.

Documenting conversations and the resolution of customer issues will help ensure that similar situations do not arise in the future. Internally noting and communicating relationship history, including service failures and recovery, provides team members with information they need to be sensitive to customer experience, and can lead to more mindful treatment during subsequent interactions. Noting service failures in detail and creating a closed feedback loop enables the organization to identify trouble spots and implement steps to permanently fix system defects.

 

What’s the next step for those who want to step up their service recovery? Incorporating these steps into training can be a good first step. But don’t stop there. Service recovery excellence requires the hiring of skilled and motivated individuals, provision of the right resources, and regular role modeling of the desired behaviors by senior management. Like most things in an enterprise, a service recovery ethos emanates from the top

[1] Service Recovery Paradox: A Meta-Analysis, August 2007, https://www.researchgate.net/publication/247745333_Service_Recovery_Paradox_A_Meta-Analysis

[2] Ibid.

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