Last week, Anne shared her story about a Winnipeg Taxi company taking its “regular” (aka loyal) customers for granted as it strove to attract new customers. I have often heard her say,
“You will exceed your customers’ expectations only once; the next time they will expect that level of service.”
Some years ago, Anne’s company was hired to help define customer expectations. Customers were asked, "What can Company A to exceed your expectations?” and their most frequent answer was this, “Deliver what you promised to deliver when you promised to deliver it, at the price you quoted. Period. Just meet my expectations and you will have exceeded my expectations.”
This past week, I sat in on a client meeting with Anne. The client was very upset, and I wasn't sure whether she was going to scream or cry. She said to Anne,
“I am so tired of customers. All they do is complain!”
The client acknowledged that the customer’s delivery had been promised for 9 am and she didn’t receive it until after 10 am. So, her company had failed to meet the customer's expectations.
I could have predicted what was coming next … Anne smiled empathetically and said gently, "You are not alone, there is not a business on the face of this earth that hasn't disappointed at least one of its customers.
“In my experience, when a company makes a graceful recovery from a product or service failure, you have an opportunity to build a stronger relationship with the customer than if you had delivered a flawless execution. This is known as the Service Recovery Paradox.”
Anne reached under her blotter and pulled out the chart below to illustrate the paradox.
“Would you like to know what I would do if faced with this situation?” asked Anne. She waited for the client to give permission before saying more.
The client nodded and Anne went on, “I would pick up the phone and call that customer. I would introduce myself as the owner of the business and I would let the customer know I was sorry for the late delivery. I would say to the customer, “I am sorry we let you down, and I am glad that you let us know. You SHOULD complain! I know I would. Please, tell me how we can make it right.”
Anne went on to say, “Having validated the customer’s complaint and asked what they would like us to do, I would stop talking and wait to hear what the customer feels would be a satisfactory resolution.
“There is an oft-quoted study from the Nottingham School of Economics which demonstrated that twice as many customers who complained were satisfied with a simple apology (45%) compared to those who received both an apology and cash compensation (23%).
“Of course, you would have considered how far you wanted to go to “make it right”. Perhaps you will offer them free shipping on their next order or a discount coupon? If the customer wants a refund, give it to them – and, if possible, let them keep the product.
“Remember that a dissatisfied customer will tell up to 15 other people — five times as many as a happy customer who might tell 3 other people!
“Resolving the customer’s complaint to their complete satisfaction is an investment in the growth of your business! Telling dissatisfied customers that they SHOULD complain, is an investment in your business. Mastering the art of the graceful recovery is an investment in your business."
Whether you receive a complaint from a customer, a friend, or a family member, remember the Service Recovery Paradox! This is an opportunity to build an even stronger relationship or friendship.