Two weeks before Kristen DeTienne moved into her new home, she called the phone company to pre-install a new phone line. The company didn't come through and she had to live for weeks without a phone.
"The organization later faced a class-action lawsuit, and I got a rebate check as part of the settlement," said DeTienne, a Brigham Young University professor of organizational leadership and strategy in the Marriott School of Management. "Customer service problems can be very expensive for companies, and a lot of times they don't think about the long-term costs and the loss of loyalty issues they create."
As an expert in the field of customer recovery – the way companies try to make customers happy once there's been a service failure – DeTienne studies what companies can do to hold on to their best customers.
"The thing that's fascinating to me as a business researcher is that most companies don't do anything about this," said DeTienne. "Managers know they are relying on frontline employees to provide their product or service and yet they don't usually train the employee what to do when there's a failure."
Companies with successful service recovery systems increase future business, can command a premium price on products and services, get better word-of-mouth advertising and reduce overall costs, said DeTienne.
"Bad service is something everyone can relate to – we've all had an experience with an obnoxious employee or had to call to correct an error on a bill," said DeTienne, citing as an example the time a waitress accidentally spilled a tray of drinks down her back at an important business lunch. "What we often can't relate to is the great way a company recovers from a service failure and wins our future business."
Too often, recovery efforts are inadequately handled, much like DeTienne's was in this case: the restaurant gave her a coupon for a free appetizer on her next visit.
Research conducted by DeTienne and fellow Marriott School of Management professor Kristie Seawright suggests that companies need to establish systems to ensure they are providing two key types of value to unhappy customers to keep them from heading elsewhere.
Customers who have had a bad experience tend to look at how they are treated by a company from both a psychological perspective – how responsive, courteous and respectful customers feel the company is – and a tangible perspective, or what the company does to appease customers.
"Tangible is what the company does to appease customers and psychological is how they do it," said DeTienne. "For example, we had a student who paid for flowers to be delivered on Mother's Day. By accident, the flowers weren't delivered. The florist profusely apologized for the oversight – that was the psychological. Then, he recovered by delivering a different bouquet of flowers to the mother's house every day for a week after that – that was the tangible."
DeTienne encourages customers to help companies be more responsive after a service failure. She recommends the following four actions:
1.) "Bring problems to a company's attention. There are a lot of companies that want to keep you as a future customer, and if they don't know you are dissatisfied, they won't do anything about it," said DeTienne. "I'm using a rental car right now because my car is in the shop. The rental car's windshield wiper fluid is out, the wiper on the driver's side doesn't hit the windshield and the tires are bald. In the snowy weather this is dangerous. I will explain to the company that this is a liability for them and suggest what they need do to fix it."
2.) Tell a company any additional inconveniences you've had to deal with as a result of service failures. "Often companies are not aware of additional inconveniences caused by their service failures," said DeTienne. "They know the new TV you bought from them broke, but don't know you had all of your friends over to watch the game when the picture went out."
3.) Clearly state what the company can do to make things right. "Often times they'll do what's necessary to keep your business but they need to fully understand your expectations," said DeTienne.
4.) Be civil and respectful when discussing service failures with company representatives. "One of the reasons I'm interested in service recovery is because years ago I was working for the customer service line of a newspaper. When people missed their newspapers, I was the person they called," said DeTienne. "I understood the situation the same whether they cursed at me or used a friendly tone of voice. I think it's important to be very clear about what the problem was, the inconvenience it caused you, what you are expecting them to do to recover, but be kind in your behavior, as well."
So what should companies do to improve service recovery efforts?
First, said DeTienne, managers should figure out where service problems will inevitably rise and devise ways to prevent them in the first place.
Second, managers should realize that no system is perfect and there will be mistakes. For problems that still creep through, managers should have an established plan in place to handle them. This plan should ensure that customers perceive a high-quality service recovery effort that focuses on psychological and tangible dimensions, said DeTienne.
"I was in the grocery story the other day; there were very long lines. They gave me a 100 Grand candy bar with a little saying attached to it that read: 'We're sorry you had to wait a long time, but we think you're grand.' It was simple, but it told me they noticed there were long lines, they didn't expect me to wait that long, and if I have to, they are going to apologize. If companies can figure out what their failures are going to be and how they can make customers feel good about them, they are going to keep those customers in the long run."