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

1. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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)

13. 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

14. 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

15. 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 Games A sense of the whole organization (Job Rotation)

16. Empower the Front Line Authority to act Responsibility obligation to act, not just to accept blame Incentives Bending the rules, taking initiative SOPs for problems that come often McDonald’s Minneapolis Marriott ($10 + Sweet Dreams)

17. 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

18. 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

19. “To err is human; to recover, divine” Thank You