You cannot put a price tag on customer loyalty; it is priceless.
Customers who return to you day after day, year after year will drive your business to great heights. How do you create that loyalty? I can tell you in two simple words: service recovery.
Service recovery is what you do after making a mistake to ensure that the situation is rectified and that the customer is satisfied. It is taking a customer from hell to heaven in 60 seconds or less. It puts the “wow” in customer service.
Every organization – no matter how good its employees are or how dedicated it is to customer service – occasionally makes a mistake. And yet I would guess that only 1 percent of U.S. businesses use service recovery; the other 99 percent don’t even know what it is. Shame on them!
In order for service recovery to work, it must occur on the front lines, with those employees who have direct, day-to-day contact with the customer.
But those employees must be trained in the skills of service recovery and must be empowered to do whatever is necessary to satisfy the customer. They must also be supported in their efforts by a management team that is committed to customer service.
Following are four tips for providing service recovery. When put into practice, they will result in increased customer loyalty – and increased sales and profits.
Act quickly
To be effective, service recovery must take place within seconds. That means the employee at the point of contact should handle the problem and should do so immediately – not tomorrow or next Tuesday. The longer it takes for a complaint to be resolved, the angrier the customer gets. If the problem isn’t dealt with immediately, you can kiss the customer goodbye.
It’s also important that the problem not be bumped up the line. When a problem moves up the ladder, it costs more, the customer is angrier, the compensation has to be greater, and it becomes more expensive. Few customers have the patience to move their complaints up the line; they would rather take their money and run – straight into the arms of your competitor.
Take responsibility
For most people, it’s human nature to want to blame someone else for a mistake. The customer really doesn’t care who made the mistake; she wants the employee standing in front of her to correct it. That employee must own the problem. He must apologize on behalf of the organization and then take the necessary steps to solve the problem.
Be empowered
Empowerment is the backbone of service recovery. If you don’t have empowered employees, you will never have service recovery. Employees must be empowered to bend and break the rules and do whatever they have to do to satisfy the customer. Most employees, however, are petrified at the thought of making an empowered decision.
They are afraid they will be reprimanded or, even worse, fired for making a mistake while trying to satisfy the customer. So it’s no surprise that they love policies and procedures that allow them to simply tell the customer, “I’m sorry, but we have a policy about this.” Policies and procedures can become a security blanket that protects employees from taking risks in practicing service recovery.
Many executives also prefer strict policies because they don’t trust their customers or their employees. They think customers will take advantage of the company by intimidating employees, who then will give away the store just to get rid of an angry customer.
If there is any policy regarding service recovery, it should be one that requires employees to do whatever it takes to take care of the customer – to the customer’s, not the company’s, satisfaction.
Compensate
Service recovery doesn’t end when you solve the customer’s problem. You must give him something of value, something that says, “We’re sorry you had this problem, we value you, and we want to keep you as a customer.” Every organization has something it can give a customer who has experienced a problem. It doesn’t have to cost the company a lot, but it does have to have value in the eyes of the customer.
Identify five or 10 products or services you can give to a customer who has experienced a problem with your organization. For example, a hotel can upgrade a guest’s room, a restaurant can provide a free round of drinks, an airline can give a $50 discount on a future flight, a credit card company can waive a late fee, and a cell phone company can offer a free month of service.
When your employees act quickly, take responsibility, are empowered, and compensate a disgruntled customer, you will have a customer who will be loyal for life. And that customer will tell everyone he knows about the wonderful service he received from your organization, resulting in word-of-mouth advertising that will bring in even more customers.
John Tschohl, a customer service strategist, has been instructing and motivating employees, managers, supervisors and company CEOs for 35 years. His Web site is www.johntschohl.com.
