Beyond Apologies: 7 Keys to Service Recovery After a Mistake - By Shyla Ratna

STORY HIGHLIGHTS

• The impact of mistakes and service recovery responses on customer loyalty
• Best practices for addressing and preventing service mistakes
• Seven examples of effective service recovery methods from reputed companies

In a world where customer expectations are constantly rising, and social media can amplify experiences, service recovery has become an essential part of any company aiming to maintain customer loyalty.

Mistakes are now magnified (and even go viral), consumers have hundreds of alternative options, and errors come at a higher cost.

But there's good news! Just as your minor missteps resonate, so does the praise when a company acknowledges its faults, apologizes, and provides a genuine, human, and tangible solution.

A recent Retail Customer Dissatisfaction Study showed that 95% of dissatisfied customers return if their problem is effectively resolved. This underscores the importance of addressing errors and turning discontent into happiness.

This article will delve into the magic of service recovery through seven inspiring key actions that have served companies well in transforming challenging moments into opportunities to strengthen their customer relationships.

1. The magic of Amazon: Less talk, more action

Amazon is renowned for its exceptional customer service. If a customer receives a damaged or incorrect product, Amazon promptly replaces it or issues a refund without asking questions. This hassle-free return policy has fostered strong trust between customers and the company.

Such policies allow companies to stay ahead of problems. In other words, if you make a mistake, there is already a clear strategy to assist the customer and rectify the situation. This leads to benefits beyond service recovery: 68% of customers are likelier to remain loyal to a brand offering uncomplicated return or damage repair policies.

2. Words are wind: Ensure your apology resonates

Actions speak louder than words. Customers want you to apologize, but from an active standpoint, with concrete actions and results.

Starbucks, for example, demonstrated this in 2018 when it faced a serious incident of racial discrimination at one of its stores. A simple "We're sorry, we do not condone discrimination" was insufficient.

The company responded by temporarily closing all its stores in the United States to conduct racial bias training for its employees. This focus on education and accountability displayed a serious commitment to addressing issues and building a more inclusive culture.

3. Stay one step ahead: Bring your mistake to light

If you know you've made a mistake, why not acknowledge it before customers find out? It's a brave and challenging but strategic decision: it will facilitate damage control (and service recovery) in the future.

Such cases are frequently found in the automotive industry, with Audi being an illustrative example. The German automaker faced a safety issue in one of its models. Instead of concealing the problem, the company issued a voluntary vehicle recall and committed to resolving the issue free of charge for owners.

4. The best service recovery prevents future mistakes

Don't assume you've succeeded by addressing a customer's problem and making them happy. You need to learn from the error and establish a robust framework to prevent it from happening or significantly limit the likelihood.

This is what the UK supermarket chain Tesco did. When customers reported issues with the quality of certain products, Tesco not only refunded the money for unsatisfactory products but also reviewed and improved its quality processes.

Service recovery and error correction are estimated to represent up to 10% of spending for some industries, such as e-commerce. The best approach is to take preventative measures.

5. Don't hide it: Use mistakes to humanize the brand

Some things cannot be hidden; everyone notices, and it's an obvious mistake. If you are criticized for an error, why not analyze what you're doing wrong at the business level instead of taking offense? A proud company dominated by ego cannot engage in service recovery because it believes its service is the best despite criticisms.

In 2009, Domino's faced criticism for the quality of its pizzas. Instead of ignoring the critiques, they launched an advertising campaign called "Pizza Turnaround". They openly acknowledged that their pizzas were not up to standard and committed to improvement. They changed their recipes, showcased employees discussing the changes, and solicited customer feedback. This open and courageous strategy helped change the brand's perception.

It's incredible how a good narrative and demonstrating genuine change can turn an error into an opportunity to humanize the brand through service recovery.

6. Throwing a curveball: Turn discontent into happiness

Is your customer dissatisfied, and have you created a problem that you can no longer solve? It's time to be creative, drastic, and, above all, very human.

As in this story: In 2011, a couple traveling on a Virgin Atlantic flight from New York to London was on the verge of missing their scheduled wedding the following day due to a flight delay. The couple had planned their wedding for over a year and were desperate to arrive on time.

The airline staff learned of the situation and decided to take extraordinary measures to help. During the flight, they organized a surprise mini wedding ceremony on the plane. They invited passengers to participate in the celebration, provided an emergency bridal gown and groom's suit, and created a festive atmosphere with music and champagne.

The couple was able to get married on board the plane in an unexpected and exciting event. It?s a service recovery case worthy of a Hollywood movie.

7. Put yourself in their shoes: Humanizing service recovery

To conclude, we must add a piece of advice that may seem superficial to some but is the foundation of service recovery. You need to understand what the customer is feeling to act consistently and sensitively!

It's very human, as illustrated by this story from Zappos, an online shoe and clothing store known for exceptional customer service.

A notable example occurred when a customer called to return a pair of shoes they had purchased but never used due to the death of their mother. The customer service representative processed the return smoothly and sent flowers to express condolences.

Remember: Build a service recovery strategy with a human focus. This approach will make your brand shine and give your strategies and policies more reach.

Shyla Ratna - Hospitality and Service DNA Solutions Associate at EHL

This article originally appeared on EHL Insights.