Nothing is more crucial than how a business fixes things after they’ve gone wrong. Find out how you can actually improve customer loyalty simply by the way you handle problems.
We all try to get things right, but life is full of unexpected moments and, inevitably, mistakes do happen.
While many businesses focus on getting it right the first time, very few realise the importance of setting things right after they’ve gone off the rails.
It is exactly when things go wrong that customers are most sensitive about how they are treated, most likely to share their experiences with friends and most likely to decide if they’ll bring their future business back to that company or to its rivals. When things go wrong, customers know that mistakes happen. What they don’t know is how they will be treated when they try to deal with the situation, and ask themselves, “Will they say it’s my fault?” and “Will they argue with me?”
When customers come back to deal with the situation, their sensitivities are heightened. You can make that sensitivity work in your favour. If service errors are quickly and professionally handled, customer loyalty can actually ‘bounce back’ to higher levels. Look at this example. You buy a pair of expensive shoes at a small boutique. Two weeks later the heel pops off as you’re walking down the street. You decide to return the shoes but you’re nervous because you’ve thrown away the receipt.
Now imagine the sales clerk welcomes you with a smile and sets you at ease about not keeping your receipt. She promptly gives you a new pair of shoes and throws in a free pair of socks “to thank you for coming back and to apologise for the inconvenience”.
Would you return to that boutique again in the future? Of course you would. Your loyalty has actually strengthened because your service problem was well handled.
This is the key point: when things go wrong, businesses have a tremendous opportunity to build customer loyalty by quickly and generously setting things right.
Seven steps to better SERVICE
Use these seven simple steps to gain customer loyalty by ‘bouncing back’ with S-E-R-V-I-C-E recovery.
S-ay you’re sorry
There’s nothing like a sincere and immediate apology. There’s no need to grovel or apologise forever – one honest and heartfelt apology will suffice.
The faster you can fix the problem the better. Do whatever it takes to set things right. Costs will be forgotten or absorbed over time, but benefits last forever.
R-espond to the customer
Remember that you’re dealing with a person. Take the time to empathise and listen. And when it’s all over, thank them personally with a note, small gift or other special gesture.
V-ictory to the customer
Build customer loyalty by giving them more than they expect – refunds, discounts, special assistance – it doesn’t have to be money! But do it fast. No loyalty is gained from a refund or gesture that takes months to negotiate.
Change your processes and improve training to avoid the problem next time. Institutionalise improvements.
Spread the word so that everyone can learn from what happened. Provide full information about consequences and improvements.
E-xtend the outcome
Don’t stop working when they stop complaining. Stay in touch until you are sure the customer comes back and their long-term loyalty is assured.
What can you do to keep your customers coming back?
Here are some ideas to get you started:
- Set up a telephone hotline for immediate response to customer comments and complaints.
- Give counter-staff the power to take prompt and significant actions for your customers.
- Use surveys, ‘comment cards’ or focus groups to keep track of your customers’ changing expectations. Find out what customers are buying now and what they may want in the future.
- Become a customer of your best competitor. Eagerly seek out what they do better or differently than you, and adapt it to your own business operation.
Long-term, loyal customers lead to lower costs, repeat orders, frequent referrals and expanding profit margins. Losing one of these precious patrons is much more costly than the revenue from a single sale! While service recovery does cost money, remember that a sincere apology costs nothing and goes a long way towards appeasing upset customers.
‘Bouncing back!’ through generous service recovery is a proven strategy for building repeat business and long-term sustainable profits. It’s not a cost – it’s an intelligent business investment.
Copyright, Ron Kaufman. Used with permission. Ron Kaufman is the world’s leading educator and motivator for uplifting customer service and building service cultures. He is the author of the New York Times bestseller, Uplifting Service, and founder of UP! Your Service. For free customer service training articles and video, visit UpYourService.com.