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We’ve all had it happen – companies we deal with mess up and let us down. And chances are at some point you’ve dropped the ball with your clients, where an unintended mistake caused frustration and inconvenience. But a recent conversation highlighted a four-step plan to turn service problems into client satisfaction success stories.
That conversation was with an east coast business owner – let’s call him Paul – who explained how two separate problems on a five hour flight had inconvenienced him, but ultimately left him more likely to do business with the airline as a result. The reason had nothing to do with the problems themselves, but rather the response from the flight attendant involved. This episode contains important lessons for you and your team on what to do – and what not to do – when clients run into service issues.
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Something simple gone wrong
The flight was with WestJet, not Paul’s usual choice, but one that he selected because the timing was convenient and the fare significantly less than his normal airline. The issue began with a full flight, something every traveler has experienced lately. Shortly after takeoff, Paul used his credit card to purchase a movie on the screen at his seat – only to find that the sound didn’t work. The flight attendant – let’s call her Jessica – tried to reset it without success, then apologized but explained there were no empty seats on the plane where he could be reseated. To make things worse, the middle seat in which Paul was sitting made it a challenge to approach other passengers about switching seats with him.
Jessica seemed genuinely sincere in her apology, to which Paul said he didn’t care that much about the movie, as long as he was reimbursed for the cost. Jessica suggested that the $6 cost for the movie would be credited against his meal purchases, a resolution which satisfied Paul.
Problem two arose when Jessica came by with the cart on which sandwiches for the long flight were available for purchase. Because Paul was towards the back of the plane, by the time she got to him the selection was limited – and food allergies meant that he couldn’t eat any of the remaining options. So not only was Paul going to be hungry on this flight, he didn’t even have a movie to distract him. As a result, Paul began to rethink whether the savings he’d realized by flying with WestJet were worth the hassle – and also whether he would choose WestJet in future.
A lesson in service recovery
That’s when Jessica took action. First, she offered Paul snacks from the food cart that fit his dietary limitations, waiving the cost. Paul was pleasantly surprised and was in fact reasonably content, as Jessica genuinely seemed to be doing her best to deal with a difficult situation.
A little later, Jessica came back to his seat and apologized again for the problem with the movie and the sandwich – and to compensate him for the inconvenience, offered him a voucher for $100 towards his next flight on WestJet. She also said that he’d hear from someone at WestJet customer service to arrange for the reimbursement of the cost of the movie.
Paul hadn’t asked for or expected this, so was very pleasantly surprised – but was concerned about losing the voucher before he had the chance to use it. That’s where WestJet did one final thing right. The next day, Paul got an email from a customer service representative, explaining that at Jessica’s request a WestJet travel bank account had been opened for him, in which the $100 credit had been deposited; the credit would be good on any booking made within 12 months and was fully transferrable. As well, the customer representative asked Paul to call him with his credit card number so he could process the refund for his movie.
Applying these lessons to your business
With airlines, restaurants and hotels, customers have lots of alternatives. WestJet’s successful recovery from Paul’s service problems flipped his attitude towards using them again: He went from being disposed against flying with WestJet in future to choosing them if he could. And even though interactions with financial advisors are more deeply rooted and as a result clients less likely to switch due to minor service errors, the principles of effective problem resolution practiced by service leaders such as Marriott, Southwest Airlines and Club Med can be utilized by advisors.
WestJet’s staff borrowed from a model for recovering from service problems in a 1990 Harvard Business Review article titled The Profitable Art of Service Recovery. That article outlined the flaw with applying the “zero-defect mindset” from manufacturing businesses to service operations like airlines. In manufacturing, every step can be controlled and mistakes effectively eliminated. But, because of the human dimension – both with customers and staff – problems can be reduced in service businesses but never eliminated. As a result, companies in the service business should put in place four steps for service recovery. As the article put it: “Every customer’s problem is an opportunity to demonstrate the company’s commitment to service.”
Step one: Be an active problem finder
The first step is to invite customers to share their issues, contrary to the behavior of many service businesses that appear to be in denial about the fact that they have problems. The authors of the article suggested that instead of papering over service problems, companies should seek problems out and invite customers to let them know when they run into any issues.
Some companies do this via 1-800 numbers or email addresses to which customers can send complaints. One bank offers $10 to any customer who sends a letter outlining a suggestion for how they can improve. Along similar lines, one advisor tells new clients: “My team and I are committed to doing everything we can to make your experience working with us a good one. If you ever encounter a problem dealing with us or with our firm, I want you to promise me that you’ll pick up the phone and call me or send me an email.” He gets very few calls as a result of saying this, but these words send a positive signal about his commitment to his clients’ experience. And when he does get a call or email, he’s able to address small issues before they escalate into large problems.
Note that service businesses have become better at identifying customer issues before they escalate. For example, all the major airlines and hotel chains have dedicated staff who monitor Facebook and Twitter looking for online complaints, with the mandate to quickly approach unhappy customers to solve their problems before their posts escalate into negative word-of-mouth. In fact, customers who find that a hotel has lost their reservation or airline passengers whose flights are cancelled are more likely to get fast action if they write about their situation online than if they call hotel and airline customer service lines. While that’s certainly a start to solving customer complaints, imagine how much better it would be if customers with problems could easily approach hotels and airlines directly rather than having to complain online to get attention.
Step two: Communicate you’re truly sorry
We’ve all had the experience of being inconvenienced and then having the person we’re dealing with deliver a rote apology. Think about the last time you called a customer service number and were kept on a lengthy hold, and the first words you heard were a perfunctory: “Sorry to keep you waiting.” Few of us feel that the person at the other end of the phone is truly sorry when we hear that, it’s just part of their automatic scripted routine.
Along similar lines, when I was on a long flight earlier this year with a competitor to WestJet, my seat didn’t go back. When I pointed this out to the flight attendant, she responded with a curt “ Sorry about that, I’ll make a note of it” and breezed to the front of the plane. Rather than acknowledging my problem, she dismissed it – and my aggravation level went up rather than down. Suppose instead she’d paused for a moment, actually looked at me and said: “ I’m really sorry about that, I’m not sure how that failed to get picked up. Let me see if there’s another seat available.”
Even if there was no other seat, the mere fact that she’d communicated real regret – as Jessica did – would have made a big difference. When you hear a complaint or problem, the first thing is to let your client know that you’re genuinely sorry. The extra time to do this is one of the best possible uses of five or ten seconds.
Step three: Deal with the issue
While apologizing to clients is an important starting point, it’s not a substitute for fixing their problem. When someone complains, take the time to ensure that you fully understand the issue he or she is dealing with, by using the most under-utilized words in the industry: “Tell me more.” At that point, whoever is dealing with the complaint needs to sit back, listen and take careful notes. Once you’ve heard your client out, respond with something along the lines of: “Let me say again how truly sorry I am. Just to be sure that I have all the details right, let me play back what I’ve heard you say.”
This does two things: It reinforces that you listened to your client and also reduces the chances of further miscommunication. In the perfect world, you’d provide an immediate solution. When that’s not possible, tell the client when they can expect to hear from you or someone at your firm with a resolution. And in cases such as Paul’s where it’s impossible to fix the problem, outline what you will do to compensate your client for the inconvenience.
The Harvard Business Review article on service recovery pointed out that solving customer problems is especially powerful in building loyalty when the customer is the source of the problem. Earlier this year, some friends and I subscribed to a symphony series at the large concert hall in my home city of Toronto. At a recent performance, one of our group forgot his tickets at the office. The box office attendant quickly printed out a pass that replaced the tickets, without any cost or hassle. In the scheme of things not a big deal – but something that impressed us and made us all feel better about subscribing to the series.
The HBR article pointed out that two things are necessary for effective problem resolution. First, establish a client-first mindset within your team and having done that, empower your front line staff to act immediately, giving them the autonomy and authority to take the initiative to resolve issues. Jessica didn’t have to ask permission to offer Paul a travel voucher – she took her own initiative to do this. Along similar lines, one advisor gives his team the mandate to send flowers and a note of apology to any client who’s been inconvenienced by a problem, with the goal of having the flowers arrive the same day the problem has been reported (and hopefully resolved.)
Once you’ve developed a culture of rapid service recovery, one final step is to borrow from service leaders like Four Seasons Hotels who use letters from satisfied customers to recognize staff who’ve shown initiative and to reinforce an “ above and beyond” mindset.
Step Four: Follow up afterwards
The final step is to follow up afterwards to ensure that clients are happy with the way their issues were resolved. We’ve all had the experience of running into a problem and then finding either that promised follow-up didn’t take place or that the supposed solution only made matters worse.
One advisor starts his Monday morning team meeting by reviewing a list of any client issues and problems and how they are being addressed. Problems stay on the list until someone has spoken to the client involved to ensure that they are 100% satisfied with the manner in which the issue was resolved. Sometimes, fixing a problem in your eyes isn’t the same as fixing it in the client’s – and ultimately what matters is not whether you think a problem has been resolved, it’s whether it’s been addressed from your client’s point of view.
The payoff from service recovery
There are a number of ways that effective service recovery pays off.
First, it ensures that client satisfaction isn’t undermined by things that may not be big issues in and of themselves but cumulatively can lessen bonds with key clients. You can do lots of things right, but minor screw-ups on service related issues can do remarkable damage to your relationship. As one example, I talked to a client some time ago who was generally happy with his advisor but was frustrated because after three attempts, some of his statements were still being sent to an old address. That experience made him reluctant to refer this advisor to friends – he was prepared to put up with small administrative problems but wasn’t prepared to take responsibility for inflicting this on other people.
Second, service recovery reduces the chances that you’ll run into negative word of mouth. I wrote in the past about a musician who flew United Airlines and after he was refused payment for a guitar that was damaged during the flight, launched a video that went viral, with 14 million views. It got picked up in national newscasts and cost United millions of dollars in negative publicity. Even if your unhappy clients are unlikely to post viral videos, you need to do everything in your power to avoid jeopardizing your reputation. That’s especially the case as user-generated online reviews make their way from Tripadvisor and Yelp to sites that grade lawyers, doctors and financial advisors; never forget that your reputation within your client community is your most valuable asset.
Finally is the satisfaction for you and your team in knowing that you have done everything possible to deliver an outstanding experience for your clients. Not only will you benefit from better client satisfaction, loyalty and word of mouth, but everyone on your team will feel better about your relationships and the impact you’re making in your clients’ lives.
So the next time you or your team run into an administrative screw-up, remember that like the WestJet passenger whose movie didn’t work, most clients are reasonable. For most people, the issue isn’t the mistake, but rather how it’s dealt with. Provided that mistakes happen only very occasionally, when clients encounter a service error, adopt the four-step approach to rapid service recovery and you too can turn service screw-ups into heightened client satisfaction.
conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written and video commentaries, go to www.clientinsights.ca. Use A555A for the rep and dealer code to register for website access.
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