What is the service recovery paradox?
We hear about the service recovery paradox every week from our customers in the anecdotal conversations we have with them. You probably experience it in your business, but may not have ever considered it as a concept before.
It’s a proven fact that customers can often be more loyal to your business after they have experienced a service failure, than if it had never happened in the first place.
We all experience problems with suppliers. Things go wrong – that’s just life. As a business, you have to learn to accept that. Of course, it’s how you deal with those problems which sets one business apart from another.
The graph below explains this visually.
The graph shows customer loyalty over time.
When things go wrong, you can see that line taking a big dip as a problem occurs and that loyalty starts to disappear.
If your business deals with it well, you can clearly what happens to loyalty growth. What do we mean by dealing with it well? How can you do that?
This service recovery paradox can only occur when a business faces up to a problem, it empowers staff to take action, it apologizes, it offers discounts as appropriate and it’s done everything in its power to make that customer happy again,
Service recovery examples
In a world where we are all busy trying to reduce the number of complaints, this little known concept should have us questioning whether we should be encouraging complaints instead! (If you click that link – you’ll be able to download our quick read ebook all about encouraging complaints.)
The very best businesses know that everyone makes a mistake sometimes. 5 star hotels, luxury goods brands, leading airlines – they usually do a fantastic job, but occasionally when something does go wrong, the differentiating factor is that they do something about it immediately, often without being asked or without the customer necessarily even having to complain.
Companies with the best customer service understand the paradox: customers are often more loyal after a service failure (so long as the recovery has been swift and good) than customers who have not experienced a service failure at all.
The service recovery paradox creates positive stories about your business that they go on to tell their friends and colleagues.
- The ski resort that bought people stuck on a broken chair lift for an hour in the cold a hot drink and gave them free ski passes.
- The company who included a free toy car in a furniture delivery for a little boy who had to wait for his new bed 2 weeks longer than promised.
These swift recovery actions usually cost very little but create incredibly powerful word of mouth advertising and referral.
How can you take advantage of this concept?
Of course, we are not advocating going out and messing up for your customers just so that you can fix it brilliantly! But the service recovery paradox does make it critically important to find out whether your customers are happy or disappointed – ideally as soon as possible after a product was delivered or a service took place.
It’s time to stop thinking that complaints are a bad thing. Customers who want to tell you how they feel about your business should be actively encouraged. In our experience, customers are VERY happy to provide feedback. The key to getting it is to give them the right mechanism and to get the timing right too.
Why not have a think about how thoughtful your business could be and what powerful corrective actions you could take, if you could understand how every one of your customers felt.
This is exactly why we’re so passionate about the power of Customer Thermometer.
With it, you can check how happy customers are, in real time, without bothering them with long surveys. Simply send, fix and delight!
If you’re not already a user – why not test us out? You could be finding out what your customers are really feeling within minutes…
Grab a free trial now:
Want more great posts like this one? Here are 3 of our most popular…
- 50 resources to improve customer loyalty
- The Best TED talks on customer retention
- 5 reasons customer satisfaction surveys don’t work