CEM – The Service Recovery Paradox
The service recovery paradox is one of the most intriguning concepts in Customer Experience Management (CEM). In a business context loyalty can be measured by the tenure of customers. The longer they stay with you and keep buying your products and services, the more loyal they are. The blue dotted line in the illustration below plots the ‘theoretical’ loyalty of a customer over time.
Following the definition of loyalty, the curve will trend upwards over time. The relationship follows an S-curve, suggesting that at the start of the relationship, loyalty will grow moderately until the company has convinced the customer with its service which is when loyalty will receive a boost. There will be a point in the customer lifecycle when the growth will slow as their loyalty has reached saturation level.
However, in almost any customer lifecycle there will be a service failure at a certain moment of time, being of a magnitude to the customer that it is an impactful moments of truth. Companies attempt to avoid service breakdowns at all costs. However, what some companies do not realize is that by providing an excellent service at the right time and in the right manner, the loyalty of customers can be boosted to a level far beyond the normal cycle making them life time ambassadors of your brand. That is the trajectory that the red solid line is depicting.
Excellent service recovery requires all employees to have a Customer Centric mindset. You cannot influence when a customer may be in need of recovery, or which channels they will use to voice their dissatisfaction. Employees need to be trained and prepared for when these situations occur. This mindset was adopted by a number of companies’ years ago such as Disney and Ritz Carlton. Should you visit a Disney theme park you will understand what I am talking about. Top notch Customer Experience is delivered by all employees from the janitor to the CEO.