Setting Your Sites on the Service Recovery Paradox

Putting in place an effective service recovery plan ensures companies a reliable measure to improve satisfaction, increase loyalty and building lasting customer relationships. And a truly effective service recovery plan can even reverse any negative impression the customer may have had in the first place.

Even in the face of a major service failure, customer impressions, and subsequent potential loyalty, can be salvaged. One evaluation of service recovery even suggests dissatisfied customers can ultimately wind up happier than those having never experienced service failure, provided that their problem is resolved efficiently. Known as the service recovery paradox, it is exactly for what every customer-facing organization should prepare.

Take for example one instance recently experienced in Vail, Colorado. My son and I decided to have lunch at a very expensive restaurant. This place was highly recommended and we expected nothing but the best. However when my son was served, he decided he did not like his choice. My son is a  very picky eater, I called the server over to see if he could take it back to the kitchen. My son said it was fine and no replacement was needed.

The server accepted my son’s apparent reluctance to stay with the original meal choice, which he never  finished. At face value, this may have seemed a sound fiscal measure on the server’s behalf. He saved the restaurant the cost of the meal, but what was the true cost of this? Two days later, my son refused to go back to the same restaurant. So everyone in our party wound up eating elsewhere, and for the remainder of the trip we didn’t go back to the establishment.

The server having accepted my son didn’t like his lunch without insisting on rectifying the service issue cost his employer the profit on four plates. The server I am sure had never been trained on service recovery, for if he had, he could have retained a customer. And one customer retained means multiple customers retained. Say, for example, my son brings his own children to Vail someday. Given the restaurant is still in operation, I can guarantee he will not be giving this operation his business.

A service failure presents a valuable opportunity for companies to provide an excellent service experience and ensure customer retention. That’s because an effective service recovery plan builds trust between the company and customer. Resolving service failures shows a customer that the company understands their needs and will seek to fulfill them.  And if the server was trained on and had employed effective service recovery, the restaurant would have retained a customer.

There are four critical steps. 1. Act Quickly. 2. Take Responsibility. 3. Be Empowered. 4. Compensate. Every employee must master these skills.