Service Recovery

Now that you know that your customer is dissatisfied through the complaints that you get, how can you make up for it?

SERVICE RECOVERY would be the magic world for this post.

Service recovery is what helps builds customer loyalty and brings a customer back from the brink of defection.

For example you may have given a customer an upgrade of hotel room type simply because the facilties in the room that the guest is presently staying in is faulty and has caused much inconvenience to the guests (eg, faulty shower room). This is service recovery.

It helps you to obtain back the trust, confidence and satisfaction of a customer who were upset by the service/product that you deliver. If managed properly, service recovery paradox may even occur.

(Figure 4-Service Paradox)

The service recovery paradox means that with a highly effective service recovery, a service or product failure gives a chance to obtain higher satisfaction grades from customers than if the failure had never happened. This translates that a good recovery can turn upset and frustrated guests into loyal, very satisfied customers. It may even create more goodwill than if things had gone impeccable in the first place.

Complaints anybody?

"Handling customer complaints is one of the essential pillars of customer service and customer retention. However, it's just smart business to try to understand WHY customers complain, so you can PREVENT complaints from happening in the first place. Understanding why customers complain, and addressing concerns before they happen saves time, and reduces the incidence of angry customers."
Robert Warlow

"When the customer pays for a product or service, it is assumed that the product will work correctly or that the service received is as promised. Ideally, the customer will be satisfied, and there will be no complaints."
The School Of Champions

Customers who complain are not difficult customers, it has been proven that such customers;
1. They Are mostly loyal and sincere
2. They care about the service they receive
3. They want to continue to support your business
4. They want you to set things right

You should treasure such customers. They are customers who will want to RETURN to you. If possible, you should even try to ENCOURAGE customers to complain and give feedback. This is much better than having customers dissatisfied and then leaving you forever without telling you what went wrong and giving you a second chance to make up for it.

Another way in which complains may help you is displayed in the below figure 3 (To improve your services and staff service skills)

Keeping your customers

Now that you are convinced that you should keep your existing customers coming back, you may be wondering how you can do it. Please take a look at figure 1 below.

(Figure 1)

It is clearly shown that SERVICE is the CORE of the problem. It may be bad attitude of staff or their indifference. It may not even be because of the staff's bad attitude, it may only be due to CUSTOMER'S own PERCEPTION(as we have discussed earlier).

How then can we turn this round?
A person whom can we all look for help for is Mr.Konosuke Matsushita.

(Figure 2)

I would advise you to read the above figure 2 carefully. You should follow its teachings and apply it to your company.

There are also other ways to keep your customers happy:

Customers will usually come back if,

• Your keep your promises (DISSAPOINTMENT is a negative emotion and you should avoid any happenings that may cause customers to link your service with ANY NEGATIVE EMOTIONS)
  

• You are willing to help (It makes you seem that you will go the extra mile for them)
  

• You inspire confidence (It makes customers trusts you and wants to do business with you)
  

• Your treat customers as individuals( as uniquely as possible)
  

• You make it easy for customers to do business with you (Convenience is key)
  

• All the physical aspects of your product or service give a favorable impression ( POSITIONING)

Negative emotions tend to be much stronger than positive ones. Humans tend to register negative events much better than positive ones. Therefore, it will be much more difficult to impress your customers than making them sad. But is it hard to satisfy a dissapointed customer?

As you can see on the solutions mentioned above, winning customer perception is mostly a PSYCHOLOGICAL game.

Why do I have to delight my customers?

You may be wondering of why you should be trying to exceed the satisfaction of your customers. Well, studies have shown that companies who can exceed customer satisfaction tend to benefit by having a good Positioning in customer’s minds and this helps them to:

1)Have a significantly higher customer retention rates
2)Gain significant market share against those companies that are perceived as poor service providers
3)Gain a great deal from word of mouth advertising
4)Benefit by having a reputation that attracts and retains talented staff
5)Better rate of return on investment and sales as compared to companies who are inferior


Now, why would you want to have high customer retention rates when you can always gain more customers? You may think that it may not matter how good/bad a service you give as you can always gain more customers, and therefore you need not consider having returning customers. Well…

1.Acquiring new customers costs five times more than satisfying and retaining current customers
2.A 2% increase in customer retention has the same effect on profits as cutting costs by 10%
3.The average company loses 10% of its customers per year
4.5% reduction in customer defection rate can increase profits by 25-125% (depending on the industry)
5.Customer profitability rate will increase over the life of a retained customer



Are you more convinced now that you should delight your customers and exceed their expectations?

Managing Customer Perception

As we have discussed earlier, customer perception is highly subjective and the key to control it is by controlling the MOMENT OF TRUTHS.

So how do we do so?
Simple, we have to ensure that we delight them by meeting their expectations and aiming to exceed it.

This can be done by:
1) Having a corporate service culture which involves all staff to put customers first
2) Training front line staff as they will be your key players in the Moment of Truth
3) Gathering Feedbacks and responding actively (Listen and react appropriately)
4) Gathering Market Intelligence to recognize trends, needs and wants of customers
5) Internal Marketing-Selection of staff who will be dedicated
6) Understanding how customers think/feel and responding in the best way possible (empathy)

Managing Customer Perception is like playing a psychological game. You may think that you had done a good service by promptly informing the customers of rules that they should not break such as dress code but it may not be the case. The customer may in fact think that you were just ignorant and do not want to bend the rule for them.

Let me share with you a story which my tutor told me in one of her classes,

There was a very hardworking shoe shop salesman, when there are no customers, he will go to the store room to check on the inventory. One day, there was a customer who walks in and wanted to buy a pair of shoe from the shop. She asks the hardworking salesman if he is able to get her a pair of shoes of her size. Since the salesman did regular stock taking, he knows that the size that she wants is currently not available. Therefore, he informed the customer of the sad news IMMEDIATELY, WIHOUT going back to the store room to check. The customer then went to another store which sells an almost identical shoe. The customer went in and asks the salesman if he has a shoe of her size for her. The salesman was lazy and did not do stock taking as regular as the hardworking salesman. So he went to the store room and went searching for the shoe for 15 MINUTES! He came back to the customer and inform her that the shoe of her size not available.

Which salesman appear more hardworking to the customer?
The Lazy salesman.

So you see, no matter how hard you work, sometimes its only 1 MOMENT that matters!
Thus, you only need to manage that 1 MOMENT to make the BEST impression.

Moment of Truth

The moment of truth is defined as the time when a guest comes into a contact with any aspect of your company and gains an impression of it.

The key to managing Customer Perception is based on how you manage each moment of truth.

There are 11 elements of customer perception namely,
1) Previous Experience
2) First Impression
3) Decor Ambience
4) Product Design
5) Product Innovation
6)Pricing Policies
7)Advertising & Promotion
8) In store Experience
9)Recommendations
10) Previous Experiences
11) First Impressions

You should try as best as you can to control these elements in order to paint a consistent and desirable picture of your company in your customers minds (Positioning). Amongst these, the element that is hardest to control or even may be out of your control would be in store experience and recommendations. The reason is simply because we are not able to control how people speak about us and what others will recommend. However, what we can do is to ensure that every guests who walks in has an excellent perception of us and thus will deliver positive word of mouth advertising for us, therefore recommending our company. This is what we mean by to "try as best as you can to control these elements in order to paint a consistent and desirable picture of your company in your customers minds (Positioning)."

There are some ways in which you can do so:
1) Identify your target market
2) Identify your core contribution to the target market
3) Decide on what you would like to be seen best at

This 3 steps simply means GOAL SETTING, taking into consideration what your company resources has and who you are serving.

Note: One of the key factors that cause first impression to form, affecting perception is your APPEARANCE. Therefore I would highly reccommend that you read my blog on The Art of Appearance Alteration at http://appearance-alteration.blogspot.com/2010_01_01_archive.html in order to manage your appearance and how others perceive you.

Painting Our Appearance

It does not matter what you had done, be it you gave it your best shot, or you were slacking off. Your customer would not know what you did behind their back and there is simply no way you are able to tell them each details of what you had done for them.

CUSTOMER PERCEPTION is real, it is highly subjective and it is what determines how your guests sees you.

This Blog is dedicated to BESE lestures and tutorial lessons on "Customer Perception".

The blog shall explain to you on how guests will see you and how you are able to paint a nice picture of your company for your guests.