Why Is A Service Recovery Strategy Critical To My Business?
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.