In today’s socially wired world, positive word of mouth is an ever more prized commodity. Most companies solve problems when the fault lies with the company. For example, Ritz-Carlton Hotels are famous for making every problem into what the organization calls an “opportunity.” It’s based on the concept, introduced in Harvard Business Review some two decades ago, that “service recovery” — a company’s ability to respond quickly, decisively, and effectively to a service problem of its own making — is a powerful way to increase loyalty among existing customers.
Mistakes are a critical part of every business. Hard as they try, even the best businesses can’t prevent the occasional late flight, burned steak, or missed delivery. The fact is, in business, 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. Consider how Club Med-Cancun, part of the Paris-based Club Mediterranée, recovered from a service nightmare and won the loyalty of one group of vacationers.
The vacationers had nothing but trouble getting from New York to their Mexican destination. The flight took off 6 hours late, made 2 unexpected stops, and circled for 30 minutes before it could land. Because of all the delays and mishaps, the plane was en route for 10 hours more than planned and ran out of food and drinks. It finally arrived at 2 o’clock in the morning, with a landing so rough that oxygen masks and luggage dropped from overhead. By the time the plane pulled up to the gate, the soured passengers were faint with hunger and convinced that their vacation was ruined before it had even started.
Silvio de Bortoli, the general manager of the Cancun resort and a legend throughout the organization for his ability to satisfy customers, got word of the horrendous flight and immediately created an antidote. He took half the staff to the airport, where they laid out a table of snacks and drinks and set up a stereo system to play lively music. As the guests filed through the gate, they received personal greetings, help with their bags, a sympathetic ear, and a chauffeured ride to the resort. Waiting for them at Club Med was a lavish banquet, complete with mariachi band and champagne. Moreover, the staff had rallied other guests to wait up and greet the newcomers, and the partying continued until sunrise. Many guests said it was the most fun they’d had since college.
Opportunities for service recovery abound. Any problem that employees who are close to the customer can discover and resolve is a chance to go beyond the call of duty and win a customer for life. Good recoveries from service problems do happen, but usually because some exceptional individual like de Bortoli takes the initiative to solve a customer’s problem. Companies should not depend on such rare instances of resourcefulness. They should take steps to ensure that everyone in the organization has the skill, motivation, and authority to make service recovery an integral part of operations.
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