The document discusses the importance of service recovery strategies when mistakes happen. It provides statistics showing that most unhappy customers will not return if their complaints are not addressed. However, resolving complaints can increase the chance of customers returning to 95%. The document outlines four service recovery strategies based on the level of fault and severity of the issue: 1) Apologize for low fault, low severity issues. 2) Apologize and fix the problem for high fault, low severity issues. 3) Become a hero and help the customer for low fault, high severity issues. 4) Roll out the red carpet by apologizing, fixing the problem, and providing extra assistance for high fault, high severity issues. Companies should identify

1. Don’t Miss An Opportunity to Demonstrate Great Service Recovery
Author: Teri
When things don’t work out the way you want, turn lemons into lemonade. It’s important not to miss
an opportunity to make it right with the customer. How important? Just look at these statistics
according to a study conducted by the Research Institute of America:
• 90% of customers who are dissatisfied with service they received will not come back or buy again
• Only 4% of unhappy customers bother to complain. For every complaint heard, 24 others go
uncommunicated to the company, but not to other potential customers
• Of the customers who register a complaint, between 54% and 70% will do business again with the
organization if they receive a response to their complaint. That figure goes up to 95% if the customer
feels that the complaint was resolved
So, obviously it pays to have a good service recovery strategy in place! The key is to be sincere and tailor
the response actions to the situation vs. a standard robotic approach; such as always sending a basket of
fruit or flowers no matter what the complaint. This approach requires the employee to think creatively
and makes the follow up with the customer more sincere and personal.
Service Recovery Strategies
1. LOW FAULT, LOW SEVERITY
If the issue is on the low scale of being your company’s fault and you would consider it low on the scale
of being a huge problem/inconvenience to the customer, then: APOLOGIZE
For example: You are at the bank to get some information regarding your account. The computers are
down and the employee has to take a few extra moments to look up your information manually. Of
course computers are supposed to be “up” 100% of the time, but sometimes things happen. Employee
should APOLOGIZE sincerely for the small delay, find the information and thank you for waiting.
2. HIGH FAULT, LOW SEVERITY
The problem is directly caused by your organization, but it is deemed low in seriousness to the
customer. APOLOGY/FIX IT+
For example: You are dining at a nice upscale restaurant. You and your date order a medium rare filet
mignon. Both steaks come out and yours is exactly what you requested, but your date’s is well done.
Employee should APOLOGY/FIX IT+ This includes an apology from the waiter and a new steak should be
prepared with a freebie given such as a dessert.
3. LOW FAULT, HIGH SEVERITY
This approach is for the issue that is low or of no fault of your organization, but is high on seriousness to
the customer in causing hassle, frustration or pain. Set employees up to become a HERO.
For example: You’ve just dropped your cell phone into the water and it no longer works. You are
worried about all your contacts being lost. You go to the cell phone store to see what you can do. The
employee becomes a HERO when she says she has a database of all your contacts/phone numbers in

2. their system and she will be happy to download them for no charge if you have to get a new phone. She
really becomes a SUPERHERO if she has an extra phone like yours that was recently turned in and she
gives it to you.
4. HIGH FAULT, HIGH SEVERITY
It is obviously the fault of your organization and it is causing a very serious problem for the customer.
The employee should roll out the RED CARPET, which means doing whatever he can to correct the
problem and to comfort the customer.
For example: You and your family have been traveling all day. Flights have been late and everyone is
tired and hungry. You check-in at hotel where you’ve reserved a room far in advance and are told “hotel
overbooked”. The RED CARPET approach includes an apology, fixing the problem and all bells and
whistles, such as calling another hotel, upgrading the room reservation and picking up the tab for a late
dinner.
These four approaches can be tailored to any organization. It is important to identify examples of each
in your business, then train and communicate to all employees. Allow them the opportunity to
brainstorm possible follow up approaches. Great service recovery cannot be underestimated!
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