The Profitable Art of Service Recovery

Article presentation Christopher W.L. Hart : Cambridge Massachusetts James L. Heskett : HBS And W. Earl Sasser Jr.: HBS Published by Harvard Business Review July-August 1990

Christopher W.L. Hart : Cambridge Massachusetts

James L. Heskett : HBS

And W. Earl Sasser Jr.: HBS

Published by Harvard Business Review July-August 1990

Summary Introduction : Concepts & Findings Measure the costs Break the silence Anticipate the need for recovery Act Fast Train employees & Empower FLE Close the loop & Conclusion

Introduction : Concepts & Findings

Measure the costs

Break the silence

Anticipate the need for recovery

Act Fast

Train employees & Empower FLE

Close the loop & Conclusion

Introduction : Concepts & Findings Zero Defects doesn’t exist in Service Business All of us have experienced service defect But still the topic is ‘’tabou’’ Front Line Employees are unprepared Companies have made idiot-proof systems. But idiots can’t solve problems.

Zero Defects doesn’t exist in Service Business

All of us have experienced service defect

But still the topic is ‘’tabou’’

Front Line Employees are unprepared

Companies have made idiot-proof systems. But idiots can’t solve problems.

Measure the Costs Managers are trained to get new customers not to keep them Managers underestimates the profits of a departing/unhappy customer The costs to keep a customer (A) The costs to replace a customer (B) The truth is that A is (always) less than B

Managers are trained to get new customers not to keep them

Managers underestimates the profits of a departing/unhappy customer

The costs to keep a customer (A)

The costs to replace a customer (B)

The truth is that A is (always) less than B

Break the Silence Every customer complaint is an opportunity Listen to customers complaints Make it easy for customers to complain : Hot lines, toll free, boxes etc. … but do it right.

Every customer complaint is an opportunity

Listen to customers complaints

Make it easy for customers to complain : Hot lines, toll free, boxes etc.

… but do it right.

Anticipate needs for recovery Know where errors are in the company Know the product life cycle : When errors occur Identify the FLE in contact with customers File and do some statistics on complaints

Know where errors are in the company

Know the product life cycle : When errors occur

Identify the FLE in contact with customers

File and do some statistics on complaints

Act fast Research : 11 people (Bad) Versus 6 people (good) Learn the lesson Fix the problem Talk to the customer For example :

Research : 11 people (Bad) Versus 6 people (good)

Learn the lesson

Fix the problem

Talk to the customer

For example :

Train employees & Empower FLE Do me another favor : Train FLE Empowerment & Responsibility Authority & Incentives How is Training being carried out ? (Real life and Role play)

Do me another favor : Train FLE

Empowerment & Responsibility

Authority & Incentives

How is Training being carried out ? (Real life and Role play)

Close the loop & Conclusion Close the loop Go to the end of the complaint Conclusion : make it a culture

Close the loop

Go to the end of the complaint

Conclusion : make it a culture

Q&A