Service Recovery Paradox


The Service Recovery Paradox- Leveraging your mistakes!

How many times have you failed to meet the expectations of your clients because of a service delivery failure?  If’ your like most service providers, you never thought of this as an opportunity to enhance customer satisfaction and loyalty!  The reality is, most of us either try to “justify” our mistakes or we simply avoid dealing with them altogether.  But justifying or avoiding a failure always result in a poor customer experience.  Moreover, by not addressing a failure, we completely miss a prime opportunity to build a stronger customer relationship.

A picture is worth a thousand words… so check out this figure displaying how customer loyalty (and dissatisfaction with the service failure) can improve when a service recovery is successful.

File:ServiceRecoveryParadoxon.png
http://en.wikipedia.org/wiki/Service_Recovery

Note that loyalty is actually higher in the long run when a service failure and recovery occurred.  This “recovery” is the paradox. At first glance, it doesn’t seem logical that customers would actually experience greater value when a service failure and recovery occurs than when a service is delivered as expected.

But the reality is that clients know that mistakes happen.  Customers don’t penalize you for your mistakes as much as they penalize you for your inability or unwillingness to make it up to them (recovery) in a timely and meaningful way.  In addition, customers often place a greater value on a service recovery than they penalize you for the service failure that necessitated it in the first place.

The lesson here is clear, make sure that your company:

1) identifies all service failures
2) takes complete responsibility for these failures
3) responds fully and adequately to them

But I think there is more to this story than this.  In order to CAPITALIZE on a service recovery, your response to a service failure should be:

1) OWNED: Not only should you identify service failures, you should take full responsibility for them, even when some outside factor is at fault.  Customers don’t care if it is the fault of your shipping department or the US postal service, a failure is a failure.  OWN your service failures fully.

2) TIMELY: If a customer knows that you did not respond immediately to a service failure, they are far more likely to perceive the service recovery as an act of “necessity” rather than a conscientious act of good will toward them.  In fact, more good will is generated when a mistake is corrected before the consumer is even aware of it or asks that it be corrected.

3) SINCERE: Customers know if you truly regret the inconvenience that the service failure has caused them.  Nothing is more insulting than to be patronized by the very person who has failed you in the first place.  Put yourself in their shoes!  Empathizes before you respond.

4) GENEROUS: Beyond making them whole, your recovery efforts should leave customers with the sense that they owe you (at least another chance) for your generosity.  This generates loyalty that will pay dividends in the long run.  Don’t think of this as a “loss”, think of it as an investment!  Customer loyalty is what drives word-of-mouth patronage.  Be generous in response to service failures.

5) CONSEQUENTIAL: Service failures are mistakes, and mistakes are often the result of service delivery systems that are broken.  Let customers know that you take your sercive failure seriously by investigating why it  happend and how you can avoid it in the future.  Customers are quite savvy and are often aware of the what you do in response to their complaints.  Where possible, follow up a serice failure with a note thanking them for their understanding and explaining what you are doing to ensure that such mistakes will not happen again.

Service failures are inevitable and recovery is tenuous at best!  About all we know is that your response will shape theirs.

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