It is a fact that any organisation, no matter how well-prepared, will occasionally undergo a service failure. A service failure, whether big or small, can make or break relationships with customers.

However, if service recovery is done effectively, it can lead to increased trust and customer loyalty. What creates differentiation among successful brands is responsiveness and timeliness in rectifying the wrongs and going beyond the usual to delight the customer.

Service recovery done right can minimise the costs associated with customer defection and negative word of mouth that may be harming the organisation’s reputation. It plays an imperative role in ensuring disconcerted customers don’t switch brands.

Today, many organisations are facing challenges in the area of customer service and service delivery. Given the cost of attracting a new customer is more than retaining an existing one, organisations are striving to build long-term relationships with existing customers.

Research shows 70 per cent of customers who experience good service recovery after a failure continue to do business, and 30 per cent also increase their business with the company. The top two reasons for customer exits are that they feel poorly treated, and don’t have issues resolved. So, the real issue is not always the failure itself, but how your customer service representatives respond to failure or customer issues. A good service agent will ensure the customer’s concerns are acknowledged and resolved, and keep them updated.

In a world of automated voice recordings and electronic communication, a customer who talks to a service agent, who listens and accurately responds to the core issue, will be more forgiving after experiencing service failure. Customers just want their concern to be acknowledged and apologised to, instead of being denied or danced around. Make sure your customers don’t feel like they are part of the problem; instead, enable them to be part of the solution.

Here are a few accounts of companies that have a very efficient service recovery program where the empowered front line staff executed it effectively.

  1. Maruti – Maruti service centre had committed a time for the pickup post service; customer was intimated about a four-hour delay. Given that there was no prior intimation given for the delay to the customer, the unexpected delay made him upset and more so since he was with his family. The manager requested the customer to wait and returned after 10 minutes with three movie tickets at the theatre in the nearest mall for the customer and his family. The manager also ensured that they dropped the family at the mall and also offered to pick them up once the movie was over. A service recovery program cannot be successful without adequate authority given to the front line staff, who need to execute it on the ground. Often a service recovery attempt will require a customised solution depending on the situation and customer need. This is a great example of how the brand representatives flipped the situation in their favour and left a positive impression in their customer’s minds.
  2. Mainland China (Restaurant Chain) – There was a group dinner booked for ten customers. One of the dishes was not liked in the group and so the restaurant manager made that dish complimentary. In fact, he asked them to order an alternative dish of their choice. The restaurant simply followed a no question policy. What made a difference was the speed at which the decision was taken. Not only was it appreciation worthy but also led to winning the loyalty of the customers. 
  3. Westside – A customer shopped from Westside, and gave clothes for alteration at the store. The customer didn’t check the alteration at the time of delivery as the shop was closing and took it back home. The fitting was still not perfect and so the customer called up the store next day, and the store personnel agreed to collect the dress from the customer’s house and deliver it back once it was altered correctly. This proves a classic example of the brand not only owning the mistake but rectifying it, which in turn retained the customer’s confidence.

If your company can deliver good customer service and provide exceptional service recovery after a failure, your customers will feel valued, and hold a greater emotional connection to your company. Loyal customers mean greater sales and greater customer retention, both of which pay dividends for both reputation and income.

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