Even in companies with great customer support, service failures can and do occur. However, with an effective service recovery plan, companies can improve satisfaction, increase loyalty, and build a positive, lasting relationship with customers even in the face of a major service failure.
The service recovery paradox states that customers can leave a service failure more satisfied and loyal to the company than they would be if no failure had occurred, provided that their problem is resolved efficiently. This means that a service failure presents a valuable opportunity for companies to provide an excellent service experience and ensure customer retention.
While instances of the service recovery paradox are rare, here’s a situation in which this might occur. A customer’s computer crashes while the customer is working on an annual report for work that is due the next day. The customer is extremely frustrated with the product and brand for a failure that occurred at a critical time.
When the customer calls the support agent, on his first try he is unable to help the individual restart her computer. After some addition research into the problem, however, he reconnects with the customer, and the computer and the document she was working on are restored, saving her hours of work she was anticipating in having to recreate the document on another device. In a matter of minutes, the CSR has gone from complete zero to customer service hero, delighting the customer and restoring her faith in the brand.
The Quick Recovery
How is it possible that a customer who has experienced a service failure could be more satisfied than a customer who has never experienced a failure? According to “A Conceptual Framework for the Service Recovery Paradox,” an effective service recovery plan builds trust between the company and customer. Resolving service failures shows a customer that the company understands their needs and will seek to fulfill them. When a customer perceives that the company cares about their problem and will support them through failures, they are more likely to remain loyal and repurchase than a customer who has never sought support.
Additionally, a strong recovery plan builds customer confidence. Every time a customer makes a purchase decision they realize a risk of product or service failure. By addressing the failure the company assures the customer that their complaints will prompt a resolution, a feeling of support they would not have without an initial failure. Resolving the service failure can effectively erase negative memories of the issue and generate a positive view of the firm.
According to “The Service Recovery Paradox: Justifiable Theory or Smoldering Myth?” the effects of the service recovery paradox are most likely seen in situations where the customer perceives the failure to be minor and when they believe that the company had little control over the cause of the problem. Customers are more receptive to service recovery efforts when they have not experienced service or product failures with the firm in the past.
5 Tips to Move from Zero to Service Recovery Hero
In order to take advantage of the service recovery paradox, your company needs to have a plan in place to address problems when they arise. Here are few tips adapted from “A Conceptual Framework for the Service Recovery Paradox” to help you turn an unsatisfied customer into loyal one:
1. Be proactive. Beyond issuing a complaint, customers can take action after a service failure by switching to a competitor, reducing their business, or generating negative publicity for your company. If you respond first, you can remedy the situation before experiencing these negative consequences.
2. Act quickly. Above all else, your recovery plan needs to be timely. Frustrated customers want a solution, and they want it soon. Make sure you escalate service failures to make sure they are a priority.
3. Listen to your customers. The customer service paradox can be difficult to study because it’s largely based on individual preferences. Ask what your customer needs from you to remedy the situation.
4. Communicate. Effectively communicating empathy and apology throughout the service recovery can rebuild customer relationships and trust. Assure your customers that their problem is important to the company and that it will be addressed.
5. Acknowledge the problem. In most cases costumers are forgiving. Many just want the company to admit that a problem exists, apologize, and explain while taking corrective action.
Remember, customers will reciprocate your helpful actions. When you resolve failures quickly and effectively, acknowledge and apologize for the problem, and then respond to their critical need, most customers will pay you back with continued or increased loyalty, goodwill and even perhaps, repurchasing. The service recovery paradox means that even major service failures are opportunities to show the reliability of your customer support functions and provide the most positive experience possible.