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The Profitable Art Of Service Recovery

The Profitable Art Of Service Recovery



This presentation is the summary of a HBR article by the same name, about turning complaining customers into loyal ones

This presentation is the summary of a HBR article by the same name, about turning complaining customers into loyal ones



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    The Profitable Art Of Service Recovery The Profitable Art Of Service Recovery Presentation Transcript

    • The Profitable Art of Service RecoveryBy Christopher W.L. Hart,James L. Heskett, and W. Earl Sasser, Jr.
      Summarized By:
      Group 5
      Anubhav Vanmali
      Sharadkumar R Bhatt
      Siddharth Anand
      Symbiosis Institute of Business Management, Bangalore
    • Introduction
      Mistakes are a critical part of every service
      Errors are inevitable but dissatisfied customers are not
      A good recovery can
      • turn angry/frustrated customers into loyal ones
      • create more goodwill than if things had gone smoothly
    • Example: Club Med - Cancun
      Recovered from a service nightmare and won the loyalty of a group of vacationers
      A horrendous flight
      Antidote –
      Personal greetings, help with baggage, a sympathetic ear, a chauffeured ride to the resort, lavish banquet
    • Where lies the opportunity?
      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
      - mistaken billings, late deliveries, etc.
      It costs much more to replace a customer than it does to retain one
    • The Road to Service Recovery
      Focus on the goal of customer satisfaction, adopting a customer-focused attitude, and cultivating the special skills necessary to recovery
    • The Road to Service Recovery
      In services, no matter how rigorous the procedures and employee training or how advanced the technology, zero defects is an unattainable goal
      - The best airline reservation system can’t prevent the airport from fogging over
    • The Road to Service Recovery
      The surest way to recover from service mishaps is for workers on the front line to identify and solve the customer’s problem
      Requires decision making and rule breaking
    • The Road to Service Recovery
      Measure the costs of effective service recovery
      Break customer silence
      Listen closely for complaints
      Anticipate needs for recovery
      Act fast
      Train employees
      Empower the front line
      Close the customer feedback loop
    • Measure the Costs
      Measurement precedes management
      Do not underestimate the profit lost when a customer departs unhappy
      What gets measured is truly what gets managed here
      Do not overlook the hidden costs that customers get stuck with – money spent for phone calls, time spent in making the cases, the aggravation endured throughout the process
    • Break the Silence
      Every customer’s problem is an opportunity for the company to prove its commitment to service – even if the company is not to blame
      Some customers make a point of being heard – listening to them is important
      Most unhappy people don’t speak up
    • Break the Silence
      Make it easy for customers to complain
      Dedicated toll free numbers
      Questions like, “How was everything?”
      British Airways – Video Point Booths
      Maine Savings Bank – $1 for every suggestion
      Looking for trouble in the making – listening for offhand comments
      Marriott Hotel
      Solve the customer’s problem - even if it isn’t the company’s fault
      Domino’s Pizza
    • Anticipate Needs for Recovery
      Companies can narrow the search for problems (opportunities) by monitoring certain areas of the organization and addressing them in their service-recovery strategies
      Complex scheduling
      New services & products (Signs at a new facility)
      Areas where turnover is high and workers are inexperienced (Security Gate, Operator)
    • Act Fast
      Identifying a problem quickly is fruitful only if the company responds fast
      As service problems escalate quickly, so the opportunity to prove one’s commitment to the customer is fleeting, especially if the company is at fault
      Priority 1 : Complete the service promptly
    • Act Fast
      The urgent resumption of service and an apology are often sufficient to make amends. But not always.
      Some situations call for a gesture which says, “ We realize there’s been a mistake, and we want to make it up to you”
      Free dessert if the wait for table is long
      Flowers to inconvenienced customers by Bank
    • Train Employees
      Developing the communication skills & creative thinking needed to deal with irate customers
      Making decisions on their feet and developing an awareness of customers’ concerns
      Simulated real-life situations & role playing
      Discussing and planning for possible contingencies
      A sense of the whole organization (Job Rotation)
    • Empower the Front Line
      Authority to act
      obligation to act, not just to accept blame
      Bending the rules, taking initiative
      SOPs for problems that come often
      Minneapolis Marriott ($10 + Sweet Dreams)
    • Close the Loop
      If a customer’s complaint leads to corrective measures, the company should tell the customer about the improvement
      It it’s something that can’t be fixed, the company should explain why
      Timely telephone responses
      Asking for even more feedback
      These efforts tend to give customers a positive impression
    • Conclusion
      Service Recovery shifts the emphasis from the costof pleasing a customer to the value of doing so, and it entrusts frontline employees with using their judgment
      Recovery is fundamental to service excellence and therefore should be regarded as an integral part of a service company’s strategy
    • “To err is human;
      to recover, divine”
      Thank You