The Profitable Art of Service Recovery by Christopher Hart, James Heskett and W. Earl Sasser is the newest addition to my service design research collection. The 1990 HBR article is a terrific overview of service recovery.
Mistakes are a critical part of every service. Hard as they try, even the best service companies can’t prevent the occasional late flight, burned steak, or missed delivery. The fact is, in services, often performed in the customer’s presence, errors are inevitable. But dissatisfied customers are not. While companies may not be able to prevent all problems, they can learn to recover from them. A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact create more goodwill than if things had gone smoothly in the first place.
Hart et al. identify seven tactics for service recovery:
- Measure the Costs – Considering how much it costs to lose a customer, few recovery efforts are too extreme.
- Break the Silence – Don’t attend to just squeaky wheels; make an effort to actively inquire about problems.
- Anticipate Needs for Recovery – Narrow the search for opportunties by identifying and monitoring certain problem-prone areas of an operation.
- Act Fast – Service problems quickly escalate so identifying a problem is only fruitful if the company responds fast.
- Train Employees – Good service companies rely on “standard operating procedures” for problems that come up from time to time.
- Empower the Front Line – Training can give employees the perspective that service recovery requires, but the company must empower them to act.
- Close the Loop – If a customer’s complaint leads to corrective measures, the company should tell the customer about the improvement.
The authors explore these tactics with examples from Club Med, Maine Savings Bank, Marriott Hotel, British Airways, Domino’s Pizza, Stew Leonards, US Air, DFW Airport, Sheraton Hotel, Smith & Hawken, First Union National Bank, US Secret Service, Sonesta Hotel, Montgomery Ward, McDonald’s and Federal Express.
Some of the examples are truly phenomenal.