Why Is A Service Recovery Strategy Critical To My Business?

Customer Focus

By Tim Connor, Rodeo! Performance Group, Inc.

EThe smart leader, to build loyalty in customers and keep his or her business lively and growing over the long term, must have a plan for recovering from service errors. This article describes service recovery, the three crucial elements of such a plan, and why they make the it work.

Every business, every organization, every human, makes mistakes. It’s part of the human condition. It’s going to happen.

That has to be said first, because if your assumption is that you won’t make mistakes, you have to proceed on a wholly different premise, and it will be a premise built on the quicksand of fallacy. Now, we’re in a unique position as a nation because we have moved into the “Gotcha!” mode with our legal system and indeed in our popular thinking, which seeks to shift responsibility for mistakes onto whoever has the most money. But that will have to be addressed in another article.

So, if we make the assumption that your business is going to make mistakes, then we can move on to breaking mistakes down into one of two categories: product mistakes and service mistakes. Product mistakes are the most obvious, because if our product doesn’t do what it’s supposed to, there’s a problem. But product errors turn immediately into service mistakes because they require you to deal immediately with the customer who bought the product. So the plan here is to focus on service, and the method you have in place to properly deal with those issues. That’s called service recovery.

Service Recovery Must Have Goals

Think about it for a minute: what are the outcomes you want for a customer when an error has been made? This isn’t rocket science, business leader, because you are dealing with people. What do people want when there’s been an error made? Let’s break it down into pieces.

People Want You To Acknowledge There’s a Problem

This is first and foremost, because (especially in our present economy) people just spent hard-earned cash with you, they expected a certain product, and they feel they haven’t gotten it. So your plan has to be to get on the customer’s side. You and your staff have to agree with the customer that there’s a problem, and that it’s your #1 priority to get it right. If the customer hears that from your staff, there will be an immediate de-escalation in the whole interaction, and you will hear the customer calm down. People are “wired” in that they want to be heard when they have a problem, and if they feel heard – especially if your staff give immediate feedback that they have heard – it satisfies this inbuilt need.

People Want A Product That Works

The second goal must be to provide the customer a product that works, because that’s what they expected when they purchased from you. So once your staff have communicated that they’ve heard, a working product has to be provided – and quickly. One of my favorite passages is from Tom Peter’s book Thriving On Chaos, in which he describes a situation within Coleman, the company that manufactures the well-known Coleman Stove. It seems there was a problem with the boilers cracking, and the service department showed up at the executive meeting with their report and the expectation that the team would have to settle down to a long meeting and discussion. Mr. Coleman, the owner, was there, and after about 30 seconds of listening he sat bolt upright in his chair: “’You mean we’ve got goods out there that aren’t working? Get ‘em back. Replace ‘em, and find out why, @#$%&!’ And that was the end of the meeting. There was no financial analysis. There was no legal analysis. There was no customer-relations analysis…The issue was the integrity of the product – which means there was no issue at all. We stand by it, and that’s that.” Page 86, Thriving on Chaos

If you, as the leader of your company, stand by your products in that way, and your staff know it and know that you mean it, they’ll be willing to meet the customer’s requirement for a product that works.

Now you have to include a plan to get the product quickly replaced, with a way for staff to do that. You also have to have a way to find the root cause and get it fixed. But the main thing is to meet the customer’s need, and that can be accomplished as part of your service recovery plan.

People Want To Continue The Relationship With Your Company

Why does your customer buy from you in the first place? Because you have something that they feel meets their needs. Sure it includes price, but in a much deeper sense – and over time in dealing with you – they want a relationship with a business they can depend on. Such a relationship is the foundation of customer loyalty, and it goes far beyond just satisfying the customer. Don’t believe it? Just look at those companies whose customers continue to be fiercely loyal to them: Federal Express, Lincoln Electric, Ritz Carlton. Every one has a plan to remedy mistakes that includes maintaining relationships at its very core.

The third part of your plan, then, has to include a method for continuing and strengthening the relationship with that customer. One way this can be done is with a follow up call to make sure that they’ve received the replacement (or the service that was needed to resolve the problem), and that they are satisfied with the result. Be honest and forthright with this interaction, make sure that the customer is 100% satisfied. When your staff do this, you will be on the path to building loyal customers, and it’s loyal customers who will keep your company in business for the long term.

Summary: Three Parts To Your Plan

So, as you develop your service recovery plan – and as you implement it with your staff – make sure that you have solid steps addressing each of the three key parts:

• 1. Hear and agree that there is a problem
• 2. Provide the replacement product quickly
• 3. Follow up to verify 100% satisfaction

And there’s another benefit. Over time, those companies which maintain their integrity and their relationships with their customers can have a higher price for their products, because their customers feel that that company “is worth it”. Do you want your organization to be a company like one of those?

Start your service recovery plan to accomplish that today.

Customers and the Moment of Truth

Customer Focus

By Tim Connor, Rodeo! Performance Group, Inc.

Sounds kind of scary, huh? We know the “moment of truth” as being that defining moment, that critical point upon which everything that follows depends. We’ve all had moments of truth in relationships, in jobs, in projects, in the execution of business strategies…but did you know that every customer who enters your organization goes through a series of moments of truth?

It’s true, you know. Any time a customer comes in contact with a part of your company that they later use to judge the quality of your organization, it’s a moment of truth. And, if you want to really manage customer satisfaction within your company, you should know what those moments of truth (MOTs) are for all parts of your company’s processes.

Moments Of Truth

A contact by which a customer will judge the quality of your company. Where would that occur? Let’s look at some examples and some questions that should be asked at each…

The Initial Phone Contact

What happens during the first contact with your company? In what manner is the customer greeted? How is the interaction itself, is there an atmosphere of welcome or one of bother? Is the customer’s question or concern well addressed? If necessary, are transfers speedy and to the right person? How will the contact be remembered?

Walking In The Door

What do they see? WHO do they see? Are they greeted immediately, or allowed to stand there while staff ignore them. Customers tend to understand when they can see staff are busy with others, but it doesn’t hurt to give a smile and quick greeting, and tell them they will be attended to as soon as is possible.

Discussion With Sales Staff

What approach do your sales staff take? Is it pressure for a sale, causing the customer to begin putting up barriers, or is there a real effort to understand the needs of the customer? Does he or she feel “sold to”, or on walking out do they feel that they have a workable solution?

Dealing With Problems

Problems are inevitable in any business, do your staff understand this? Is there a systematic plan for approaching customers who are having a problem? Does the plan include a friendly manner, and do your staff know how to “get on the customer’s side” so he feels the company really cares that the difficulty is solved? Studies have shown that well-handled difficulties make the most long lasting good impressions on customers. Are you making the most of yours?

Paying Bills

This is an important process to the customer, how is yours? Is your billing process accurate, and does the bill arrive timely? Is it easy to understand, and are payment expectations clearly communicated? More importantly, are your staff well-versed in the process and ready to help with billing questions or to help arrange payment?

As you can see, the process of evaluating your business for MOTs is a straightforward one. If you walk your mind through the major touch points your company has with a customer, you can generate your own questions to evaluate desirable outcomes for each MOT. Or, and this is even better, “shop” the process yourself, or have a trusted staff member do it.

This approach gives first-hand data on attitudes, knowledge, and approach of the company in handling each Moment, but obviously, be sure that the one working through the process is unknown to other staff!

What Happens Next?

It’s not the norm, but the best way to use this evaluative process is in a matter-of-fact way, without the aim of punishment or reproach involved. If you and your staff see it as a means to improve each Moment of Truth, AND if it’s done regularly, steady improvement is the almost inevitable result. Be sure your approach involves all staff, and that ideas for improving each MOT are discussed and implemented. It’s also wise to have a good measure for improvement at each point (number of problems dealt with, number of complaints, types of issues, number of sales, comments, etc.) to provide feedback on these Moments of Truth throughout the process. Once identified, such measures should be reported to the involved staff regularly, and should be trended to show either improvement or need for improvement.

Your company has Moments of Truth, why not be known for having good ones?

Customer Loyalty Starts with Your Basic Services

Customer Focus

By Tim Connor, Rodeo! Performance Group, Inc.

Any organization, manufacturing, medical, education, government, or small business, has basic service processes which, though common and expected are VERY important! You can make a difference in the success of your business by paying attention to them.

Every organization, manufacturing, medical, education, government, small or large, has service processes. These are the processes that provide interaction with clients all through their interaction with your organization, and they make a lasting impression!

How pervasive are these basic services? In manufacturing, they make up 85% of the services in the company! That’s right, only 15% of manufacturing processes have to do with the assembly or production line, the rest have to do with service involving the customer.

Here’s the key point. Even in a small business, those processes are executed dozens of times a day, and often will be done hundreds of times. So being sure they work right is important, and will have a very significant effect on the organization’s profitability or effectiveness.

Common Service Process

What are these common processes? Let’s take a look…

Inquiry Process – before prospects move to considering a sale, they usually want to know more about you and your product. What to Consider: How are inquiries handled? How is the interaction itself in terms of friendliness? Is there a plan that really helps answer questions and concerns, with supporting materials?

Sales Process – the sales process involves working with the customers who’ve come through your door, encouraging them to buy, plain and simple. What to consider: How well is it done? What are the customers’ feelings during the process? How well are their needs and questions addressed? How many sales are made? How many complaints come back to the business after the sale?

Service after the Sale – the process that handles customer questions and issues after the sale has been made. It’s this process that is most important in building loyalty, or long term relationships, with the customer. What to consider: Are common issues and questions identified, and their cause removed whenever possible?

Billing Process – that process that sums up the clients expenditures and accurately reports them, asking for payment (duh!). What to Consider: Is the process accurate? Is it timely? Does it include explanations where they are necessary? Are recurring questions related back to the process so it can be improved?

Service Processes: Ends-In-Mind

Remember, these are the processes that interact with your customer, and the ones that will form the impression of your company in every customer’s mind. Your time taken now could make a big difference in marketing, sales, and customer loyalty.

Building Positive Word of Mouth Advertising

Customer Focus

By Tim Connor, Rodeo! Performance Group, Inc.

People like to talk, so you will always have your business talked about by somebody to somebody else. The important thing is to make sure that what’s talked about is good and not bad stuff!

How do you do that? By making each part of the customers’ contact with you a contact that wows them.

Turning Negatives Into Positives

There are multiple points in your business where your customers have contact with your organization. The easiest to see is on the front end, where we meet them, greet them, and hopefully make a sale to them. But what about when they call because they don’t understand something about the service or product they’ve bought? Or when they have a problem with the bill? Or when it’s time to upgrade? Or even – good grief! – when they’re unhappy about part of your service? Believe it or not, these are your very best opportunities for developing good word of mouth advertising.

Now, why would I say that? Obviously, we spend most of our money and do most of our training on doing a good job at the front end – the sales end. It’s easy to see results here, either you make the sale or you don’t. But “buying something from us” does not make people appreciate us as a company, dealing well with a problem does! There will always be problems involved with some part of our relationship with the customer, and our thoroughness in planning for the interactions that occur at these times will make the difference between bad or good word of mouth advertising.

Fed Ex Sets the Example

Federal Express is one company which has taken this to heart, and issues that arise during shipping (and there aren’t many!) are dealt with quickly and thoroughly by the staff member taking the call. One such interaction had the staffer listening to an irate customer with a lost package who was “fed up” with the lack of response she was getting from the local employees. During her call to national headquarters in Memphis, the staff member heard her out, restated the problem back to her to be sure of understanding, get on that customer’s side by committing to find an answer to it, and gave the customer the option of staying on the line or waiting for a call back with resolution of the issue.

The problem was resolved and the package found.

The Customer’s Perspective

Now put yourself in the customers place: if someone had taken the time to obviously listen well, and then worked hard to fix a problem you had, what would be your feelings toward them? Wouldn’t you mention the whole situation to people you knew? Wouldn’t it be in the front of your mind whenever someone else talked about a problem they were having with a service or product? And think about what would be actually said: “Well, listen to this! I had sent a package with Fed Ex, and they lost it, but you should have seen how that woman in Memphis worked with me! She listened to me, took down all my information, followed up with me within 15 minutes – I’ll tell you, I was impressed.

Notice how customers in this situation will go through all the steps that were taken to help them resolve the issue? And that sort of story is very impressive to the third party who’s hearing it. Who do you think they’ll use when they have a package to send? They already have a good story of a problem dealt with well, and it has already put the company in a good light with them.

To Sum Up

So time taken to analyze the customer contact points in your business is time well spent. And getting the staff involved in coming up with the steps to be taken to resolve problems is worth the effort. You can start your own positive word of mouth marketing campaign, and lift morale and pride in your company while you’re doing it.