[Part 2] How To Win-Back Unhappy Customers
A successful service recovery strategy can help businesses to increase customer retention and revenue after a service failure. Part one of this series focused on the complaint handling steps that should be part of a service recovery strategy. However, there are some other critical factors that play an important role towards its success and ultimately customer loyalty.
4 Success Factors For Your Service Recovery Strategy
1) Response Speed
Up to 96% of customers will stay with a business if they feel that the company has acted quickly on their complaint. Time is indeed of essence for a successful recovery.
You want to reach out to the customer whilst the experience and memory are still fresh. Therefore, your first response has to be almost immediate. Make sure to always keep an eye on your recent reviews and ask for regular feedback to catch any complaints early on.
But equally important is the timeframe between the actions taken. A speedy apology will be worthless if you take too long to resolve the issue. Also, communication is important here. Provide your staff with tips on how to keep customers updated about the progress made and next steps.
Empower your staff to make their own decisions during the recovery. They should be able to take necessary measures (within guidelines) without having to ask for approval first. Some bigger brands, like The Ritz-Carlton Hotels or Virgin even have a fixed service recovery allowance per employee.
The fewer people that are involved in the service recovery the easier and quicker it will be for your customers. So, if you empower your employees to take ownership, they will act as the main contact person throughout.
Besides, allowing your staff to handle the complaint using their own judgment and authority is a great morale booster for them.
3) Staff Training
To succeed with your service recovery strategy, you have to provide your team with the right skill set. This involves regular training to make them more confident when dealing with complaints.
Equip them with a clear step-by-step process they can follow along, similar to the LEARN framework we had a look at in the first part of this series.
And make sure to record your incidents and the outcome to share it with the whole team. This is the best way to improve your processes.
4) Compensation Matters
The most important factor in your service recovery strategy is to match the compensation to the type of failure and develop individual strategies for each customer.
In general, a financial compensation often won’t do the trick towards customer loyalty. It’s what customers would at least expect after a complaint. You have to find a solution that reassures them of your commitment to delivering on your promised customer experience.
The trick is to go the extra mile. Apply an experience-driven recovery approach, which means addressing customers emotionally by focusing on their needs. This way the newly created experience will make up for the failure that happened before. Which leads to an increase in their loyalty.