What is service recovery: meaning and examples | RingCentral UK Blog (2023)

Remember the old adage "The customer is always right"? It is the key to any successful business and ensures that customer expectations are exceeded.

After all, dissatisfied customers can negatively impact your business. Not only have they lost their usual habit, they don't recommend it to any friends. A positive review can do wonders for your business. But what happens when you get stuck with a crusher?

Service recovery is all about keeping scathing reviews low and customer satisfaction high.

This article looks at service recovery and why it's important for every business.

What is Service Recovery?

Service recovery consists of correcting your errors. It's a poor person's recovery processcustomer service experienceand regain customer loyalty. The key is to react as quickly as possible and correct your mistakes when you spot them.

However, this is only possible by planning such an event. By equipping your frontline workers with the right information to help customers, you can help cushion the blow when disaster strikes.

A successful service recovery should restore customer confidence, increase customer retention and increase brand awareness. There are even studies about it.James L. Heskett and Christopher W. Hart wrote"The Profitable Art of Service Recovery" which examines service recovery and how it can really benefit businesses.

What is the service recovery paradox?

The service recovery paradox occurs when a customer feels better about your business after the issue is resolved. And it's a situation you can use to your advantage. This theory means that even if a customer experiences a service outage, if you handle the situation well, customers will be more loyal than ever.

However, there are some conditions. In general, the paradox applies to smaller problems that are easier to classify. For example, if a customer complains that a coffee shop overcharged them for their coffee, the coffee shop will refund them as a goodwill gesture and also offer a free snack for the inconvenience. But when it comes to bigger issues like password cracking, disgruntled customers aren't as quick to forgive and forget.

Not only that, but the paradox is less true when better planning could have resolved the situation. If the problem was reasonably foreseeable, customers are less likely to accept it. For example, when an airline overbooked seats on the flight and left some very unhappy tourists stranded at the airport waiting for the next available plane.

Here is a graph that demonstrates this:

The two approaches to restoring services

If service recovery is part of your business plan, there are two ways to approach it. These are the main approaches to the profitable art of service recovery:

Identify the problem before it reaches the contact center

Prevention is often seen as the best solution. However, if the problem cannot be avoided, there is still time to resolve the situation through a service reset. This approach aims to minimize the number of customers calling the contact center.

Companies may want to limit this for a variety of reasons. From ensuring the contact center isn't overwhelmed to streamlining calls so critical customer issues are resolved with one agent.

So how can you identify a customer issue before it reaches the contact center? The use of technology is key. Take Microsoft, for example. Sometimes a Sasser computer virus, a type of software worm, can affect your operating system. If customers have an issue with this, the quickest way to resolve it is through self-diagnosis and recovery steps that can be performed on your site. It is not always necessary to call the call center.

Likewise, using tools like RingCentral is a way to ensure that customer concerns are addressed quickly. With yourInbound-Contact-Center-SistemaCustomer service representatives are available 24/7 via live chat, messaging and social media interactions to assist with customer concerns.

You can also take advantage of "proactive customer service", where you inform the customer of an issue before it occurs. For example, if a train operator suspects that the next train will be delayed, he can inform customers via SMS.

Use service recovery to retain customers

This approach may not work for all organizations as it involves the paradox of service recovery. Essentially, this means that when the customer experience fails, your customers remain loyal, but you can bounce back with excellent customer service.

However, that doesn't mean you should do this.to allowfor the problem to occur. It means thathe musthappens, you've taken all necessary steps to minimize damage and keep customers as satisfied as possible. To ensure this, your contact center needs to be robust and supported by qualified agents.

Importance of Service Recovery

Here's an overview of how important service recovery is for businesses:

Reduce negative reputation

As a business, especially as a customer-centric business, your reputation is extremely important. You want to attract new customers and retain existing customers with your excellent reputation for customer experience.

By implementing service recovery strategies, you are actively taking steps to ensure your customers are happy even when things go wrong. For businesses of all sizes, word of mouth can do a lot of damage to your reputation, but especially so for small or local businesses that rely on positive reviews and recommendations. Service recovery is critical to reducing a negative customer experience.

Increase customer loyalty

Service recovery is important for customer retention. As a brand, building a strong customer relationship is one of the best things you can do. That way, customers feel emotionally connected to your business and are more likely to remain loyal. Even if you let them down.

If brands are known for transparency as part of the customer experience, almost9 out of 10 peopleThey are more likely to get a second chance after a bad experience. And 85% are more likely to stick with them in crises.

By using Service Recovery, you ensure that all customer needs are met, especially when service standards are not met.

Höherer return on lifetime value

Because service recovery increases customer retention, it means that customers whose needs are met have greater lifetime value. A loyal customer is more likely to return to buy and support a company if they trust the brand. Once you build a relationship with customers, your spending grows with trust.

Finally they spend57% more with brands they are loyal to. This underscores why customer lifetime value is so important to a business, because when customers are served well, the business benefits.

Reduce the cost of doing business

By resolving customer complaints as quickly as possible, you reduce the number of customers who need help from agents in your call center. Offering virtual customer support means fewer calls are handled, thus reducing the cost of doing business.

You can also analyze calls and look for opportunities to improve your business processes. That way, you can avoid these problems in the first place. Tools like RingCentral can help with this.Anrufanalysis, as you get real-time information about calls, as well as the ability to conduct customer surveys.

Steps to a successful service recovery plan

When writing a successful service recovery plan, there are some important steps to consider:

1. Be proactive

Analyze customer journeys to see where issues can arise. This can help you avoid them in the future. To do this, scour your website and social media analytics, conduct customer surveys, and speak with your contact center team to identify the most common issues.

You should also communicate with customers and ask if they have any issues. For example, when you are at a restaurant and the waiter asks you if everything is ok with your meal. This is the first step to a successful recovery plan, finding the problems and trying to eliminate them before they become bigger.

2. Decide which approach you want to take

As we discussed, there are two distinct approaches when it comes to efficiently restoring service. The first is to identify the problem before it reaches the contact center and the second is to accept the service recovery paradox.

To ensure your plan is consistent, you need to decide which approach works best for your business. And remember, the goal is to make sure customers are happy, so be sure to follow up once the issue is resolved.

3. Focus on employee training

Whichever strategy you choose, you need to make sure your employees receive the right training. Empowerment is important for employees, they need to feel empowered and supported.

One of the training steps is letting them know how much they can offer a customer before the issue needs to be escalated to a higher level. For example, you could give staff a £20 goodwill gesture if certain customers are particularly frustrated, but if they feel the customer deserves more, this should be discussed with a manager.

In addition, every agent should have a roadmap for how to handle the toughest customers. Tools like RingCentral are ideal for handling complaints because agents can review customer information before answering the call and customize the script to meet their needs. Agents using RingCentral can do the sameAnswer calls remotely, so that more customer queries are answered.

Examples of restoration services

To understand what good service recovery is, let's first look at an example of what not to do.

Imagine you've booked a hotel, but quickly realize you're in the wrong area for your business trip and need to cancel. If you did not book directly with the hotel, you may need to contact your reservations agent. First, check online to see if you can change your reservation without the hassle of phone calls. Unfortunately you cannot. Then you call the company that has your booking. But since they don't have efficient enough systems, they keep you on hold for over an hour. If you finally get it, you're talking to the wrong department. The agent will connect you back to the person who can help you.

This agent finally explains that due to their policy they cannot offer refunds but you can change dates. But you don't want a date change, you want a full refund! This process can be time consuming and even if there is a solution, customer confidence will be undermined.

A good example of service recovery is one where the company intends to fix the problem first. For example, if you find that your phone bill has been overcharged, the first thing to do is contact your phone service provider.

They have a helpful page with self-diagnosis issues and helpful FAQs. However, you would like to speak with a consultant, so click on "Live Chat". An agent will appear on your screen and since you are talking to the person best able to solve your problem, it will be resolved in minutes. And because they want to make sure you're completely satisfied, they're offering an extra £10 credit.

The quality of service in this example is high because his needs were met and he was also rewarded.

What must you deliver in the service recovery process?

Your recovery efforts need to be genuine and thoughtful to reduce customer dissatisfaction. Start by offering the customer a sincere apology to start the recovery process. After that, providing the service consists of solving your problem and ensuring that you can regain your trust.

To do this, you need to provide top-notch customer service. Understand their concerns and make sure they get in touch with an experienced agent to resolve them. RingCentral software can help with this.

As advanced features such as intelligent routing are used, customers are always routed to the best agent for the job. This means users are routed to the right department the first time. Eliminate the frustration that switching to multiple departments can cause.

After contacting the right agent, that agent can start using RingCentralreal-time analysisTool to retrieve any customer information that may be relevant. This helps them provide personalized service even when working from a script.

And if the customer's request needs to be escalated, the agent can transfer the call to their manager and receive immediate approval. Integrating your CRM system with RingCentral can also be useful for visualizing customer data.

Reports: document them for future reference

Sometimes customer issues cannot be fixed. But when they do, it's a useful learning tool for your business. You have a wealth of data on multitouch attribution, including vulnerabilities, customer concerns, and user experience.

You may want to expand your knowledge and consultretail diaryit's atMarketing Magazine. Both aim to increase readers' knowledge of customer service, supply chain, and management in retail and marketing environments. And all of this can be used to your advantage. It is important that you document this for future reference so that you can learn from your mistakes and provide better customer service.

RingCentral provides valuable analytics that you can view at any time. You can also create detailed reports to gain insights into your customers' experiences and how your agents are handling them. This is information that may allow you to do better when encountering another customer issue.

So, if you want to improve your service recovery, implement our steps and use useful tools like RingCentral.

Originally published April 29, 2021, updated May 15, 2021