“If you want to increase sales, grow a loyal customer base that is the envy of your competitors, and provide service that is worth thousands of dollars in advertising and marketing, you must make a commitment to solving your customer’s problems—and to doing so quickly.”
So says John Tschohl, founder and president of the Service Quality Institute in Minneapolis, Minnesota, which develops and delivers customer service training programs throughout the world, and author of several books on customer service, including Loyal For Life. “Every company, no matter how excellent its products or employees, occasionally makes a mistake,” he says. “How those companies and their employees respond to their mistakes, however, is what separates successful, customer-service driven organizations from the rest of the pack. Service recovery is the key.”
Tschohl defines service recovery as solving a customer’s problem and improving customer service by sending that customer out the door feeling as if he’s just done business with the greatest company on earth. Unfortunately, he says, most companies handcuff their employees with inflexible policies and procedures that discourage them from making empowered decisions to solve a customer’s problem.
“Empowerment is the backbone of service recovery,” Tschohl says. “Employees must be allowed to solve a customer’s problem on the spot.” Research, he adds, shows that a customer who has experienced a problem with a company and had that problem solved are more loyal that a customer who never had a problem.
“Research also shows that there is nothing as powerful—or inexpensive—as word-of-mouth advertising,” Tschohl says. “Happy customers will tell everyone they know about how well your company treated them, which will drive your business. You must care for them, nurture them, and do whatever it takes to earn their undying loyalty.
Advertising will bring a customer through your doors once, but the challenge is to keep them coming back to you.” Tschohl recommends taking these four steps to provide service recovery that will grow your business:
1. Take responsibility. “Admit that the company made a mistake and tell the customer you’re sorry for the problem,” Tschohl says. “Admit that the company made a mistake. It’s human nature to want to blame someone else for a mistake. But the customer doesn’t care who made the mistake; she just wants the employee standing in front of her to correct it. That employee must own the problem, apologize on behalf of the company, and then take the necessary steps to solve it.”
2. Act quickly. “Service recovery should happen in 60 seconds or less,” Tschohl says. “Great service recovery is not moved up the ladder or passed to a supervisor to be handled another day. The cost of a delay is dramatic, because most customers won’t wait; they will simply leave you. The longer it takes for a complaint to be resolved, the angrier the customer will get and the more likely he will be to take his business—and his money—elsewhere.”
3. Be empowered. “If you don’t have empowered employees, you will never have service recovery,” Tschohl says. “And, if you don’t have service recovery, you won’t have loyal customers. The magic of improving customer service occurs when it happens with a frontline employee. Identify and eliminate policies and procedures that tie your employees’ hands and then reward employees who make empowered decisions that satisfy—and retain—your customers.”
4. Compensate. “Service recovery doesn’t end when you solve a customer’s problem,” Tschohl says. “You must give him something of value, something that lets him know you value his business and that will keep him coming back to you. Every organization has something it can give a customer who has experienced a problem. It doesn’t have to cost the company a lot but it does have to have value in the eyes of the customer. Identify 10 products or services you can give to a customer who has experienced a problem with your company. For example, a restaurant can give a customer a free dessert, an airline can upgrade a passenger to first class, a cell phone company can give a disgruntled customer 1,000 minutes.”
The purpose of service recovery is to prevent customer defections. “If you solve your customers’ problems and resolve their complaints, they will stay with you,” Tschohl says. “In each customer complaint is an opportunity to win that customer’s long-term loyalty. In the process, you will prevent customer defections, create word-of-mouth advertising, and dramatically increase your sales and profits.”
John Tschohl is an international service strategist and speaker and founder and president of the Service Quality Institute in Minneapolis, Minnesota. Described by Time and Entrepreneur magazines as a customer service guru, he has written several books on customer service, including Loyal for Life, e-Service, Achieving Excellence Through Customer Service, The Customer is Boss, and Ca$hing In: Make More Money, Get a Promotion, Love Your Job. The service Quality Institute has developed more than 26 customer service training programs that have been distributed and presented throughout the world. John’s bimonthly strategic newsletter is available online at no charge.