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Service Recovery: Four Steps to Customer Loyalty

Over the years, I have addressed service recovery in thousands of speeches throughout the world. It is, I believe, one of the most important elements of customer service, and it can make the difference between success and failure for any organization.

I am amazed, however, at how many people—from frontline employees to senior executives—do not understand service recovery. If you don’t understand it, you can’t provide it.

service_recoveryLet me give you a real-life example of wonderful service recovery. At his wife’s request, Bob stopped at the Olive Garden Italian Restaurant in Bloomington, Minnesota, to pick up a salad to have with dinner that night. When he returned home and his wife opened the container, she discovered it did not include the dressing for which the Olive Garden is famous.

When Bob returned to the restaurant, the manager already had been made aware of the mistake and was waiting. He apologized profusely and gave Bob two bottles of dressing, a large dessert, and a $10 gift card. What was the result? Bob and his wife happily enjoyed their salad and dessert and are looking forward to using their gift certificate.

They also told many of their friends about the incident—not focusing on the mistake the Olive Garden had made as much as what the manager had done to make up for it. The actual cost of what the manager gave to Bob and his wife was negligible; the word-of-mouth advertising the Olive Garden received for it was priceless.

This is what service recovery is all about. It is turning a negative situation into a positive one and sending the customer home thinking he has just done business with the greatest company in the world.

Word-of-mouth advertising is the most powerful advertising you can get—and it costs you nothing. It’s common knowledge that most of us, before making a purchasing decision, ask friends and coworkers for referrals. What they say is very influential, because they are people we know and whose opinions we trust. So, when someone asks Bob to suggest a restaurant for lunch or dinner, you can bet he will recommend the Olive Garden.

On the flip side, people who have problems with a company and do not have those problems solved to their satisfaction tell anyone who will listen about their negative experience. And they often do so via social network. Before an unsatisfied customer even walks out of your business, she can be sharing her dissatisfaction via her smart phone to hundreds of friends on Facebook, for example.

Every company, no matter how good its products and employees are, occasionally makes a mistake. It’s how you handle that mistake that makes the difference between earning a customer’s loyalty and driving that customer away. When a customer comes to you with a complaint, take these four steps to ensure that you provide the type of customer service that will keep him coming back to you:

1.    Act quickly. Do whatever you can to solve the customer’s problem on the spot. When you send that problem to someone else—your supervisor or manager—the customer becomes frustrated. That frustration escalates with every delay in reaching a solution. If you can’t solve the problem within a matter of minutes, you’re in trouble.

2.    Take responsibility. Don’t get defensive and take the complaint personally. And don’t challenge the customer. Instead, be empathetic. Offer a sincere apology. You might say, for example, “I am so sorry. I understand why you are upset. Let me see what I can do for you.”

3.    Make an empowered decision. Know the boundaries of your authority so you can solve customer problems and complaints. Make it clear to the customer that solving her problem is your priority.

4.    Compensate the customer. When you offer the customer something in the form of compensation, it does several things. It makes her feel valued. It makes her think he just did business with the greatest company in the world. It increases his loyalty to you and your organization. And it creates positive word-of-mouth advertising.

In the case of Bob and his experience with the Olive Garden, he and his wife told all of their friends about their experience. And they are looking forward to using that $10 gift card. That is what service recovery is about: satisfying your customers and making sure they return to you.

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