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Service Recovery

Service Recovery
You can please - all of the people some of the time; some of the people all of the time; BUT, you can never please all of the people all the time.

A group of four people go out to dinner on Friday night. Three peoples food is brought to the table, one persons order was lost. What is an adequate recovery? What if it happened at lunch on Wednesday?

Services loved and despised

Name a service to which you have committed to never return? Name a service where you have experienced a great recovery?

Reworking customers not easy

Recoveries fix circumstances and attitude 96% of disgruntled customers walk rather than complain. Complaining customers are an asset Demanding customers are an asset

Key to a quick recovery

Shift efforts from recovery to prevention


the failures Insert counter measures

If 96% of service failures walk, service providers may know of failures that are not obvious to management. How management responds to the providers will determine how much is revealed to them in the future.

Learning vs. Accountability

A preliminary model
Blamefree culture

open reporting

Full investigation


Process improvement



The Value of Open Reporting

Failures Observed
(without voluntary reporting)

All failures Near Misses

Accountability AND Open Reporting

just culture just, a. 2. Equitable; impartial; fair; as, a just decision provides a fair and productive alternative to the two extremes of punitive or blamefree cultures. balances the need to have a non-punitive learning environment with the need to hold persons accountable for their actions.

David Marx, Just Culture: A Primer for Health Care Executives

Just Culture at a Glance

Normal Error Intended action No At-Risk Behavior Yes Reckless Conduct Yes

Knew risk of action Recommended response

Blame Free

Blame Free


The Problematic Middle Ground

At-risk behavior

the employee intend to violate the rule? Yes Did the employee understand the risk? No

Some deviations from rules may be justified Sometimes, the written procedure and the actual procedure performed by employees dont match.

Changing Standards
New Standard New Standard Old Standard

Normal Error Intended action No

At-Risk Behavior Yes

Reckless Conduct Yes

Blame Free

Old Standard

Knew risk of action Recommended response


Blame Free


Just Culture
with it
without it

Ignorance is not bliss.

Service Recovery Policies

Bumper to bumper warranty Unconditional Guarantee Replacement or money back Discount on current service Discount coupons for future service

Service Recovery Policies

Effective Unconditional Guarantees
Unconditional without exceptions Easy to understand and communicate Meaningful (valued by customer) Easy and painless to invoke Easy to collect

Wont customer take advantage?

Negative word of mouth (customer tell an average of 9-10 people) Low propensity to complain. Only 4% complain about actual failures Actual failure vs. perceived failure: only perceptions matter May save a lifetime customer

Quitting is an option

There are customers that it would be better for your competitor to have.

dissatisfied Unprofitable

Short-term customers Profitable Butterflies Unprofitable Strangers

Long-term customers True Friends Barnacles