5 Steps to Turn a Loss into a WinNov 30, 2021
You've likely heard the statistics about much more expensive it is to gain a new customer vs. keeping and existing customer.
So why is the customer service recovery function treated like a cost, rather than an investment?
Let’s look at the numbers*
- Acquiring a new customer is 5x as expensive as retaining an existing customer.
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
- Increasing customer retention rates by 5% increases profits by 25-95%.
Bottom line – if you keep your existing customers happy, and maximize your relationship with them, you can reduce your customer acquisition costs and increase revenue.
Errors are inevitable, dissatisfied customers are not.
The primary responsibility of your customer service recovery organization is taking those unhappy customers and turning them around.
And here’s a secret not often talked about ...
A customer that experiences a loss and is recovered is more likely to be your advocate than a customer that merely experiences a win.
Now that we agree WHY customer service recovery is important, let’s look at WHAT you can do to ensure successful customer service recovery.
Listen to the concern
You may hear the same concerns day after day. You may have access to a system that shows you exactly what went wrong with that customer. Your job is to listen. Listen, and empathize. Actively listening. Don’t listen to justify how you were planning to respond – rather respond based on what you heard. Understand not only what went wrong, but the impact it had or is having on the customer. I had a conversation with someone recently who had a problem with their stove heading into Thanksgiving week. They contacted a repair person whose response was “I am so sorry. We can’t have that getting in the way of your Thanksgiving plans. Let’s see how quickly we can get someone out there”. That representative listened, understood the impact, and empathized.
When I led the Guest service recovery team at Disney we would get lots of concerns about things that were out of our control … like weather … or the actions of another Guest … or a flight being delayed. We would use the phrase “it may not be our fault, but it is our problem”.
You have to apologize for the customer’s experience. Some companies actually have a policy to never apologize – with the rationale that it makes them liable. That’s rubbish! You don’t have to accept responsibility, but you have to show understanding and apologize for the customer having had to go through a disappointing experience. A sincere apology is sometimes all it takes. I can’t count the number of times I heard from an escalated Guest “if they would have just apologized, rather than getting defensive”. If a customer is reaching out – it’s now your problem. Apologize. Be authentic.
Make it right, plus a little more
Sometimes making it right is obvious. It’s replacing a product or offering a refund. Sometimes it’s not so obvious. In a previous blog, I talked about thinking out of the box when it comes to recovery. It’s important to have guidelines .. and then empower your customer service representatives to do the right thing by the customer. We would use phrases such as “like for like, plus a little more”. If you merely replace a product or experience you are not necessarily making them whole. What inconvenience or time did it cost the customer to get the issue resolved? “Plus a little more” will surprise and delight your customers.
If you are in a position to recover using something that is limited edition, highly sought after or not available for sale to the general public – you could be a service recovery rockstar!
Once you’ve made things right with the customer there are a new more steps.
First - thank the customer for sharing their concern and allowing you to make it right. Often times in business we don’t know what’s going wrong unless a customer (or employee) points it out. We can only get better when we know what needs to be fixed. We owe our customers a debt of gratitude both for bringing issues to our attention, and also for giving us a second chance to earn back their business, their loyalty and if we’re lucky, their advocacy.
Then make sure you do whatever it is you offered to do. Seems simple, right? Whether that means fulfilling yourself, or inputting your offer into a system for someone else to fulfill – make sure it’s done! I’ve been in situations where I've had to “recover the recovery”. It’s time consuming. It's embarrassing. And it's more expensive than the initial recovery.
Next – ensure you have a process to record the service failure that happened so that you can try to prevent it in the future. Your business needs to know what is going wrong so that they can implement improvements. As mentioned earlier – errors are inevitable. What you want to look for are trends.
Last – make sure you are tracking the recovery so that you maintain a history of the customer. That history may inform future offers, interactions or recovery options.
This step, keep track, is actually the first and last step. You need to research the inquiry – has the customer written before, what is their history, etc. And then you need to record the most recent interaction. It’s a bookended process.
There is much discussion in the world of customer service recovery about scams, scammers, and being taken advantage of. In my 10 years leading a customer service recovery team I can tell you that there is a slim percentage of your customers that are trying to scam you. When I would talk about the 10 different types of Guests that would contact us … I would include scammers as a category, but always point out that the majority of all Guests inquiries were genuine. My philosophy has been to err on the side of the customer until I’ve been given a reason not to. That requires tracking.
Tracking also allows you to be more informed as you consider future offers to this customer. You would also have the information you need to determine if you want to be more hands-on with a customer's next interaction.
Now that you’ve retained your customer - you can look forward to years of loyalty, commitment and advocacy of your business. Costs go down, revenue goes up. It’s a dream scenario.
It doesn’t have to be a dream!
If you are looking to improve your customer service recovery process you really need to know where you are coming from, and where you are going. It’s time to do an honest assessment of your organization’s customer service recovery process. Then you need to define what you want it to look like. What’s best in class? If you’re not ready to jump to best in class, what does a phased approach look like? Who do you have that can lead such an effort?
Where you might get stuck
First and foremost - it can be difficult to have an “insider” assess your current operation. You need someone that can ask difficult questions, dig deep, share tough feedback and not paint a “rosier than reality” picture in order to garner favor with the boss.
It also may not be easy to define the roadmap to get you there.
Lastly, you may not have a resource skilled, available, and objective enough to lead the work.
If you’re ready to take action and overcome these obstacles - you can work with me and I’ll bring the art and science of customer service to transform your organization into a world class operation.
Interested? Book a call to see how we can work together
Whether it’s an assessment of your existing operation, a roadmap for improvement or simply facilitating your leadership team through a work session to discover your gaps – I’d love to help YOU bring out the best your organization has to offer.
I’m Heather Havey. My consulting business brings the art of Disney and science of GE to clients looking to transform their operations. I help clients fix, build and grow their businesses through a unique combination of analytical skills, contact center leadership, project implementation experience and an obsession with employee and customer engagement.
My passion for relationship building and six sigma discipline is infused into every project. With 20 years at Disney combined with 10 years at GE, I am equipped to help clients improve their employee engagement, deliver a world class customer service experience and optimize their existing resources.
Whether you are a large service-oriented business with a desire to level up your customer service operation by benchmarking the Disney Guest experience, or a small to mid-sized business in growth mode looking to define or formalize customer service and recovery processes … I offer customized, no-nonsense, real-world solutions designed to position you as the hero in the reinvention of your business.
Check out options for how we may be able to work together at https://www.heatherhaveyconsulting.com/services .
And if you think you could benefit from having an expert partner with real-world, action-oriented change solutions that will absolutely work, let’s chat. In your free strategy session, we’ll get those ideas out of the clouds and onto the road to results. Schedule a complimentary strategy session to talk about leveling up your employee satisfaction, customer experience and financial results.