The Excellent Economics Of Service Recovery

Most customer service and CX professionals intuitively understand that their companies need to do a good job in recovering from an experience miscue. An unhappy customer is never a good thing. So we decided to do a quantitative analysis of the relationship between service recovery and consumer spending. As you can see in the chart below:

  • Any improvement in service recovery has a positive effect on future spending patterns.
  • Moving service recovery from very poor to neutral limits the amount of decrease in future spending.
  • Moving service recovery from neutral to very good not only limits decreases in spending, but also increases the number of people that will spend more in the future.
  • Companies that do a very good job with service recovery have more customers planning to increase spending than decrease spending.

Companies that want to improve their service recovery should follow our C.A.R.E.S. model:

  • Communication (clearly communicate the process and set expectations)
  • Accountability (take responsibility for fixing the problem or getting an answer)
  • Responsiveness (don’t make the customer wait for your communication or a solution)
  • Empathy (acknowledge the impact that the situation has on the customer)
  • Solution (at the end of the day, make sure to solve the issue or answer the question)

The bottom line: Mistakes are inevitable, so recovery is critical.

About Bruce Temkin
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, marketing, interaction design, customer service, and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

One Response to The Excellent Economics Of Service Recovery

  1. Dave Fish says:

    Hi Bruce,

    This is very consistent with what we have found time and time again in every sector we work. The more important the purchase (i.e., high involvement) the stronger the effect. While we should work to resolve issues before they even occur, but “normal accidents” do occur even in the best companies and running down those “silent sufferers” and taking care of them is critical. There was a time when they told there friends, now they can post in social media in tell hundreds of thousands.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 2,799 other followers

%d bloggers like this: