Let’s face it:
Every employee and every business in the world occasionally makes
a mistake. What separates service leaders from the rest of the pack,
however, is how they handle those mistakes, how they meet the challenge
of turning a disgruntled customer into one who sings their praises
and becomes a customer for life.
This is called service
recovery. It is taking a customer from hell to heaven in 60 seconds
or less. It is apologizing, taking responsibility, and giving customers
something of value as a way of appeasing them and earning both their
trust and their loyalty.
Unhappy customers can
wreak havoc on your business. They reduce employee moral and increase
employee turnover, generate negative word-of-mouth advertising,
and destroy your bottom line. The good news is that, using some
of the strategies in my new book on service recovery, which will
be available later this year, you can quickly put smiles on the
faces of those unhappy customers and keep them coming back to you
year after year.
Service leaders realize
they are in the service business—not the banking, restaurant,
hotel, computer, airline, or health care business. They know the
value of a loyal customer. They spend time and money training their
staffs in the art of customer service and give them the tools they
need to do their jobs. They establish customer-friendly policies
and procedures. They hire people who genuinely enjoy working with
people. They empower their employees to bend and break the rules
in order to solve customers’ problems.
Incredible service will
give you incredible returns. If you doubt that, you need only look
at Amazon.com. In 1995, during its first year in business, the company
had sales of $511,000. By the end of 2003, Amazon.com had sales
of $5.26 billion and was expecting sales of between $6.2 and $6.7
billion in 2004. What is driving those remarkable sales? Service.
Happy customers will
drive your business. You must care for them, nurture them, and do
whatever it takes to earn their undying loyalty. We all know that
advertising can bring a customer through the doors to your business
once. The challenge is to keep them coming back to you, to provide
them with service that is so exceptional they wouldn’t think
of taking their business elsewhere. That includes solving their
problems. Let me give you an example of service recovery. While
I was skiing at Vail Resort in Colorado, the ski lift malfunctioned
and left me and many other skiers stranded for an hour. The resort
people offered us two free lift tickets. It would have cost us $140
to purchase those two tickets, but they represented no out-of-pocket
expense for the resort.
All too often, companies
handcuff their frontline employees with strict rules and procedures.
Employees who don’t follow those rules and procedures are reprimanded,
even fired. Service leaders, on the other hand, have policies that
say, “Do whatever you have to do to take care of the customer.”
They train their employees and trust them. They praise their employees
when they break the rules and the result is a satisfied and loyal
customer.
Commerce Bank on the
East Coast is a $23-billion bank with a 10-year, 31-percent annual
return that knows the importance of service recovery in operating
a successful and growing business. In fact, the company pays $50
to any employee who identifies a stupid policy or rule that gets
in the way of serving the customer.
Empowerment is the backbone
of service recovery. You must allow your employees to solve a customer’s
problem on the spot. You also must encourage your employees to give
the customer something of value, something that is so powerful they
not only will keep coming back to you but will tell everyone they
know about it, as well.
What can you give your
customers when you make a mistake? First, give them an apology.
Then follow that with something that has value for the customer.
Hotels can upgrade the customer to a suite at no extra charge. Restaurants
can provide a free round of drinks or appetizers. Airlines can upgrade
passengers to first class. Car rental firms can give the customer
one free day of rental. Car dealerships can provide a loaner car
when the customer’s car is not repaired when promised. Internet
service providers can waive their fees for a month or two when service
is disrupted. The list goes on and on. The key is that you are giving
the customer something that has value in their eyes—and pocketbooks—but
that doesn’t cost you an arm and a leg.
Price alone is not a
competitive weapon. You must provide exceptional service and service
recovery if you are to survive and succeed. Practice service recovery
and you will be amazed at how often you can bring customers back
from the brink of defection and at the positive impact it will have
on your bottom line.
John Tschohl
is an international service strategist and speaker. Described by
Time and Entrepreneur magazines as a customer service guru, he has
written several books on customer service, including e-Service,
Achieving Excellence Through Customer Service,
The Customer
is Boss, and Ca$hing In: Make More Money, Get a Promotion, Love
Your Job. John also has developed more than 26 customer service
training programs that have been distributed and presented throughout
the world. His bimonthly strategic newsletter is available online
at no charge. You can reach John at www.customer-service.com.
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