December 2, 2013

Customer First: Loyalty through Service Recovery

By Allwell Nwankwo

Leonard L. Berry and A. Parasuraman put it beautifully.  In their classic, Marketing Services: Competing Through Quality, they describe superior service recovery as “doing the service very right the second time.”  In the simplest of terms, service recovery is the act of making things right for the customer whenever a service failure is occurs.

Should we aim at 100 percent accuracy in service delivery?  Absolutely.  Can we always achieve it?  Maybe not.  Do customers expect us to do it right at all times?  They have a right to do so.  But, fortunately, they also appreciate that occasionally things may go amiss despite the best of efforts.

Given that we should all endeavour to give great service the very first time and every time, there are times when things simply don’t work out that way.  Since those who deliver service are fallible humans, they are bound to make mistakes once in a while.  Sometimes, some situations beyond everybody’s control (the weather, for instance) limit the ability of service people to meet up with customer expectations.  At other times, sheer human error or poor attitude crops up. Thus a delivery date may be missed, a bus service may take off late, a package may be delayed or the wrong product may be shipped.

Once the organisation is aware of a service failure – whether it discovers on its own or through a customer complaint – it is the manner of righting the wrong that makes all the difference.  An excellent service recovery programme offers an organisation the opportunity to showcase its service orientation to an otherwise angry customer.  Service recovery may, in certain situations, involve bending over backward to ensure that the customer is happy once again.  In some organisations with excellent service culture, frontline staff are authorized to spend up to a certain amount of money in resolving a customer complaint without recourse to a superior.  In others, there is a policy of complaint resolution at first contact.  This means that whoever receives a complaint first or gets to know about a matter first, owns the problem and ensures that it is resolved immediately to the customer’s satisfaction.

What’s the payoff for “doing the service very right the second time”?  In one word, loyalty.  Various studies indicate that when a complaint is satisfactorily resolved, most customers will continue doing business with the organisation and may even become more loyal than they would have been if there had been no problem.  This is known as the service recovery paradox.  Do you need to disappoint customers sometimes in order to execute an excellent service recovery and earn their loyalty?  That’s clearly not the way to go.  The fact though is that customers are happy with those who resolve their challenges effectively.  They also spread positive word of mouth, which brings in more customers.

But we need to clarify one point.  The customer is the ultimate judge of satisfaction.  Therefore to make dissatisfied customer happy again, the organisation must tackle the complaint with despatch, courtesy and empathy.  If the service recovery process is long-winded and rigorous, the customer may remain dissatisfied after the problem has been resolved.  Speed is of the essence.  When we realise that most customers won’t complain then the importance of excellent service recovery cannot be overlooked.

It is important that every serious organisation have a service recovery plan with a simple procedure in place.  The story is popularly told of how Nordstrom, a specialty retailer, accepted returned automobile tyres and refunded the customer the amount he said he bought the goods although the company never sold the tyres.  The company allowed this just to keep a customer happy.

Few companies would go as far as Nordstrom.  But every company definitely has a great opportunity to leave lasting impressions on customers through service recovery.

Here are a few suggestions you should consider.
*Have a service recovery system in place.
*Put your service recovery plan to work once a mistake has been identified, whether the customer is aware or not.
*Speed is of the essence.  Do it now.
*Service recovery is not a cost.  It is an investment.