Service Recovery

Jan 23, 2020

“It takes 20 years to build a reputation and five minutes to ruin it…” – Warren Buffet


Service recovery. It sounds like something we should all know already, but what exactly is service recovery? Think about these examples: the chair lift breaks while you’re riding it and you’re stuck for two hours above the ski slopes. A rainstorm comes through unexpectedly and delays all flights. A train is delayed due to unexpected rail traffic. An agent calls out sick at the last minute and there’s no one to fill their spot. A subway car has to stop for an hour due to debris on the track… These are all situations in which service recovery would be implemented. Simply put, service recovery is creating a process for dissatisfied customers, due to a service issue, to return to a state of satisfaction.

As you can imagine, service issues are inevitable, especially with uncontrollable environmental variables. But what can be controlled is how you respond and implement your service recovery plan. We all know the basic steps – apologize, listen, respond quickly, offer compensation, fix the problem – and yes, all of those steps are very important, but there’s more to service recovery than just following a process. The main question is, how do you utilize loyalty to assist with your service recovery plan and enhance your member’s experiences? Below are a few key drivers that enhance the quality of your service by using loyalty to alter customer attitudes towards your brand.

  1. Be Human. There’s nothing worse than receiving a robotic voicemail apologizing to you after you’ve been sitting on a tarmac for two hours, especially when you’re an elite status flyer. Remember to lead with conversations that help solve your customer’s problem. The cost to the brand is typically low, but the impact is unprecedented.
  2. Be Useful. Service recovery is not the time to ‘check a box,’ but rather it’s the time to make an impression and be useful to your customer. Remember, you have all of their data and history sitting right in front of you – use it to your advantage to create a compelling offer that resonates with their needs. And, take this one step further by empowering your staff to offer rewards and engagements on the spot, rather than sending a follow-up communication.
  3. Be About the Customer. Again, it’s easy to just go through the motions, but you should put the customer first during service recovery and think about their return on engagement to create a more valuable experience. This is also the perfect chance to identify opportunities for improvement in future situations. Think about the customer first!

It’s a fact that members who have experienced a successful service recovery incident are more loyal than those who haven’t. In the graph below, we see just that. You can see, during a time of service failure and service recovery, customer loyalty drops significantly. But what’s interesting is the increase in loyalty once the solution is handled properly and resolved. This is why service recovery is so vital for a brand.

Customer expectations have changed in recent years. Customers are becoming much smarter about how and when they share their data and are requiring a strong value proposition in return for that data. The key to service recovery is to anticipate their needs before they even realize something is wrong. This is where loyalty can come into play. By utilizing the first-party data associated with a member’s program, you can provide a more rewarding journey and implement appropriate solutions, creating a much stronger relationship with your customer, versus just a transaction. It’s time for industries to optimize their investments in handling service recovery and remember to always put the customer first.


Did you know Kobie is ready to help fuel your service recovery efforts? Contact us for information about our offerings.