Mistakes made good

A failure in service is more visible to the customer than dozens of successes. Delays, defective products, or lost luggage are a black spot that quickly expands into quality control efforts. Many of these mistakes are avoidable. Customer recovery systems at that moment become a fundamental factor in re-building the company’s image.
Only one of five customers offers the company the possibility of recovering them, because only one files a complaint: the rest will simply not come back. This statistic added to the fact that, according to experts in several industries, it costs five times as much to obtain a new customer than to retain the old one, led many companies to include strategies to retain its customers.

Many lost customers are recoverable

An airline doesn’t get any credit for taking its customers’ luggage to their destination on time, because it’s what’s expected of them; but if it doesn’t occur, it will not take long for complaints to roll in. Some companies such as Disney or American Express do an excellent job of recovering customers, and statistics show the benefits and importance of taking advantage of the opportunities to make up for the mistake. In recent years, these measures are quickly spreading among companies. However, more than half the efforts to recover customers fail, and they even worsen the relationship with them.
On the other hand, when the measures are successful, the customers can even end up more satisfied with the service than they would have been had it worked from the beginning. A case at Club Med shows how a failure in service is a conflict, but it is also an opportunity to strengthen the link with that customer even more.
A group of tourists left Paris destined for Club Med-Cancun. The flight was delayed 10 hours, with 2 unscheduled layovers and supply problems, turning it into a true nightmare for the summer vacationers. When the plane finally touched down at 2a.m. in the Mexican city, it was necessary to take urgent measures to salvage the disaster. The resort’s general director looked for the solution. He took half of his employees to the airport to receive the passengers with music, drinks, and food. When they go to the hotel, the tourists were given an extravagant party with mariachis and much champagne, in which the rest of the guests also took part. The remedy had an amazing effect: the group confirmed its royalty to the company.
It is necessary to identify problems with service, resolve them, and learn from the experience. Some customers change brands or providers for only one bad incident, explains Charles Lamb, Professor of Marketing at Texas Christian University.
Without effective repair measurements, the customer often spreads his or her bad experience, and the case gets out of control. Supervising service with mystery shoppers, and confronting market studies are good tools for finding out the degree of customer satisfaction, and what their expectations are in the case of failures in service.

"Only one of five customers offers the company the possibility of recovering them, because only one files a complaint: the rest simply will not come back"


Need for Customer Research

Customer research means being pro-active in contacting customers and asking them about their experience. Many customers would not complain, but if you ask them about quality of service, they are willing to point out failures and inconveniences. The lobby listener is one of the figures that allow us to obtain that data. Its function is to spend some time in the hotel lobby at peak hours and ask customers who are checking out about the quality of service.
Listening to customers is the starting point. The easiest way to find out the degree of satisfaction with the service is giving the customers the possibility of complaining. Many do not complain because they think that companies don’t pay attention. Moreover, it takes time and psychological energy to complain, and in many cases they don’t know who to complain to. A 1-800 number is usually an effective method for channeling complaints. Marriott Corporation has a 24-hour hotline in its hotels so that guests can place orders and make suggestions on the spot.

Trained personnel with competition

In the first place, in order to recover a customer it is necessary to establish a relationship with him or her. That requires trained personnel that approaches the complaining customer and apologizes. Companies must ensure that all employees have the ability, motivation, and authority to carry out the recovery service.
Many companies stress the importance of offering a good service but do not train their employees to recover customers. They must be motivated and compensated to do that. For example, the company newsletter could include successful case histories.
When a problem occurs, the first reaction is generally to look for explanations and excuses, instead of solving it. The training must create that repairing reaction. This is where it is very important to give power to the front line so that they can make decisions that allow them to solve the problem and compensate the customer for the mistake. Many companies are afraid to include this policy, but those that have advanced in this sense have been successful.
A significant portion of recovered customers is more content when the initiative is carried out by the first person they dealt with, than when they have to talk to a second or third employee. Whoever first finds out about the problem must take charge and resolve it. The best moment to try to recover the customer is as soon as possible, adds the professor.
Some companies have "sundown policies": when a customer notifies about a problem, the company must make contact with them before sundown, even if it’s only to tell them that they are working on the case. It is necessary for the company to show certain urgency in attending to the customer and solving the problem.
For the service recovery to be successful, it is generally necessary for the customer to be confident that the company has previously offered them a good service. It is not possible to make up for chronic bad service with a good recovery service.

"When a mistake is solved well, customers may even be more satisfied with the service than they would have had it worked well from the beginning"

12 recommendations for an effective recovery service

  1. Act quickly. If the complaint was made while the service was being delivered, time is the key to obtaining a complete recovery. When the complaint occurs after the fact, many companies established policies of responding within 24 hours or before.
  2. Recovery must be personal. Form letters are not successful.
  3. Recovery must be, as much as possible, at the first point of contact. It must be possible, and customers must not have to deal with several staff members. A study by Federal Express revealed that 77% of customers who complained are satisfied with recovery efforts if they deal with only one employee, but only 61% are content when they are sent to a second representative.
  4. Admit the mistake but do not adopt a defensive attitude. That might suggest that the organization has something to hide or is not willing to explore the situation fully.
  5.  Show that you understand the problem from each customer’s point of view. Seeing situations through the customer’s eyes is the only way to understand what they think went wrong and why they’re upset. Service personnel must avoid reaching hasty conclusions based on their own interpretation.
  6. Don’t argue with customers. A successful situation would be revising the facts in order to reach a mutually acceptable solution, not winning a debate or proving that the customer is an idiot. Arguments rarely dissolve anger.
  7.  Be aware of the customer’s feelings. Let the customer know, implicitly or explicitly, that you understand how they feel. This action helps establish contact, the first step in re-building a damaged relationship.
  8. Give the customer the benefit of the doubt. Not all customers are right, nor are all complaints justified. But customers must be treated as if their complaint is valid until there is clear proof to the contrary.
  9. Clarify the steps necessary in resolving the problem. When immediate solutions are not possible, informing the customers on how the organization plans to proceed shows that they are carrying out corrective actions. It also establishes expectations regarding the wait-times involved (the company should be careful with its promises).
  10.  Maintain customers informed of any progress. Uncertainty leads to anxiety and stress. People tend to accept inconveniences better if they know what is happening and receive periodic reports.
  11. Consider the possibility of compensations. When customers undergo serious drawbacks or lose time and money because of a mistake in the service, monetary compensation or the offer of an equivalent service is appropriate. This strategy can even reduce the risk of the customer seeking legal action.
  12. Persevere in order to regain confidence. A heavy dose of perseverance is required in order to dissolve the buyer’s anger and convince them that actions were taken to avoid repeating the problem. Exceptional efforts can be extremely effective in achieving the customer’s loyalty.

Importance of an effective customer recovery service