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Best Customer Service Recovery Strategies for 2024

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Best Customer Service Recovery Strategies for 2024

Feb 16, 2024
11 min read

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Zero defects are attainable in manufacturing, but not in service delivery systems. In manufacturing, you add the components at the right places, follow a standardized process and achieve the desired output. In service delivery, however, it’s impossible to achieve this feat since you’re dealing with customers and their emotions.

Businesses, for long, have tried to model their services after assembly line principles. They designed extremely standardized processes, introduced sophisticated technologies, and fostered customer-centricity. They did everything to ensure that even the most uninitiated of service reps deliver exemplary service with the help of standardized processes.

While this has certainly helped deliver great customer service consistently, it has not been able to eliminate discrepancies completely. Flights keep getting canceled despite sophisticated scheduling systems. SaaS companies keep receiving complaints no matter how sturdy the self-serve is. Customer churn owing to bad service is rampant.

Service delivery systems are bound to displease a few even when they are at the top of their game. What is the right thing to do when it goes down? It will cost a lot of time and money to please a disgruntled customer. Will it be worth it? Would they start trusting you again?

Let’s dig in to find out what customer service recovery entails, and a five-step process for effective service recovery.

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Table of Contents

What is customer service recovery?

Services are bound to fail. And customers are going to be dissatisfied. But, you have to right the wrongs done to your customers. This process of turning a bad experience into a positive one is known as the customer service recovery process.

But it’s not just a process. It’s a mindset that keeps customer satisfaction a primary goal. For exceeding customer expectations during service failure, you need to pay special focus on service recovery strategies and embed them into your business processes. You need to train and entrust your front-line employees to use their best judgment to tackle a situation.

Research over the years has shown that customers who have had a service failure resolved tend to be significantly more loyal than ones who have never faced a failure. We call this the service recovery paradox.

Did you know: Research shows that customers who have experienced a service failure that was resolved are more loyal over time than those who haven’t experienced any service failures. This is called the service recovery paradox

What is the service recovery paradox?

It’s a situation where a customer starts to think highly of a company after it has managed to resolve their problem, compared to their impression of the company prior to experiencing the problem. 

The reason this happens is that a special kind of relationship develops between a company and a customer during the service recovery process.

The company displays empathy for the customer by going the extra mile to satisfy them. They display a genuine desire to solve their problem.

The customer begins to feel a sense of trust. They know that if something goes wrong, it will be fixed — the biggest assurance every customer needs.

Service Recovery Paradox
Service Recovery Paradox

If the service recovery paradox exists, shouldn’t companies start creating a few small problems and then resolve them with utmost sincerity to gain the loyalty of the customer?

Well, it does NOT ALWAYS work.

A popular study tells us that the outcome of service recovery efforts depends on a few attributes. Let’s dig in.

  • It does not work if the customer has faced failures in the past.
    A customer will give you only one chance to make up for a failure. You do it again and they will lose faith in you for good.
  • It does not work when the failure is BIG.
    Mistaken billings and late deliveries make a person angry but are not life-altering. If someone misses a wedding because you canceled their flight, you’ve lost them for good.
  • It does not work if the customer believes you could have averted it.
    They will be comfortable trusting you again only when they know you tried your best. Go ahead and provide a third-party explanation for the failure if that helps.
  • It works if customers see the issue as unforeseeable.
    They will trust you only when they understand you could not have been prepared for the situation.

Basically, you should not rely on the service recovery paradox as a service delivery strategy. It exists as a special response to situations and that’s the only way you should rely on it.

At the same time, service breakdowns will happen anyway whether you like them or not. It is for you to take the right steps to bring a customer closer to you even in the worst of moments.

How to build an effective service recovery program?

Effective service recovery begins much before the actual failure — here’s how you keep yourself prepared and do the right things at the moment of truth:

1. Adopt a customer focused attitude

When you do spot an opportunity to regain the trust of a customer, you cannot afford to falter. A failed service recovery is a sure-shot way of losing your customer for good.

Micah Solomon, a seasoned customer service professional, advises keeping a few service recovery principles in mind — they will help you cultivate the right thought process for the moment of truth:

Do not make excuses

Most customers do understand that a few things will go wrong every now and then. What they don’t understand, accept or find interesting are excuses.

For example, they do not want to know if the problem originated from another department. They do not want to know of the internal disputes that caused a problem. The moment you shy away from taking responsibility, they are going to lose it.

With Hiver’s Shared Inbox, your support team will never have to make excuses again. Task delegation in seconds, seamless team communication, and much more.

Do not panic

No matter how bad the situation looks, remind yourself that the customer looks up to you to get their problem solved.

Fixing customer complaints in a calm and composed manner will go a long way in re-establishing their trust in you and reducing their negative experience.

Do not dismiss them

Do not be surprised if you find some extreme or absurd customer issues or requests. You have to be mentally prepared not to dismiss it immediately.

If you are in no position to give them what they want, get them to settle for something almost like it. Show them that you went an extra mile for them.

Don’t stop at being fair

You can be fair to a customer only if nothing has gone wrong. When you’re dealing with a disgruntled customer, you will have to delight them as well.

Only making up for what they have lost won’t improve their customer experience. Go a step ahead and create a memory for them. Always remember that the service breakdown was caused by you and you should be glad to have the opportunity to correct it. Many customers would rather abandon you in the face of failure.

Remember you aren’t doing them a favor

You’re not doing anything special for the customer. You’re just ensuring things are the way they should’ve been in the first place.

Because you wasted their time, you have to do a little extra for them in order to make up for it. Work with them to determine what is that extra they need, but do tell them you are ready to go the extra mile.

Always remind yourself of the lifetime value of the customer

You will have to learn to think beyond the present transaction. A happy customer is much more than the revenue you earn from them.

They can become a vocal supporter of your product. They can influence their own networks to try it. It’s a well-known fact that word-of-mouth is probably the most effective marketing tool for your brand.

Remember, creating a loyal customer base can help you a great deal over time.

With the right mindset, you’ll be able to empathize with customers and be ready to build a solid foundation for service recovery.

Key service recovery principles
Key service recovery principles by Micah Solomon

2. Be prepared for failure

After the right mindset comes organizational preparedness. Facing a dissatisfied customer should not come as a surprise to your employees. Spot the areas which are prone to breaking down and empower your employees to handle them with confidence.

Anticipate areas prone to breakdowns

Fixing problems when they crop up is good and absolutely necessary. However, a little preparation before things actually go south will lead to successful service recovery.

Practically speaking, you cannot be prepared for anything and everything that can ever go wrong with your delivery. A better approach is to narrow your search for problems: identify your weakest spots — parts in your delivery which are prone to failures.

This is again not an easy exercise. How do you determine what can break easily?

  • Processes which involve complex scheduling are generally prone to breaking.

    Airline cancellations are a common example. Every time a flight is canceled, customers are forced to wait for hours, at times without any assurance. People going bonkers at the airport is not rare at all.

    Businesses need to be ready with a plan B for processes involving many departments, at times in different locations, coordinating to deliver something on time.
  • New services and products are always a little prone to breaking.

    A lot of things can go wrong quickly. You misjudge the market and go on to build something nobody likes. You make extravagant claims and the product does not live up to it.

    Microsoft reportedly spent a whopping 500 million USD on the launch of Windows Vista and even the most loyal fans disapproved of it. It was laden with compatibility and performance issues — a big failure.

    Was Microsoft ready with a Plan B? They were not. Who gained the most from this debacle? Apple. Their ad campaign “I’m a Mac” criticized Vista ruthlessly leading consumers to believe Vista had more problems than it actually did. Only if Microsoft had, well….  a Plan B.
  • Areas where turnover is high and employees are inexperienced are enormously prone to breaking. 

    This is the most relevant to airports. The first employee you meet is the security.

    They are the least paid and the least experienced at handling people — yet they are responsible to create the first positive experience. It is imperative that the airports spend time and money on training the security to handle lapses in service with elan.

Teach your frontline employees the art of customer service recovery

These folks are always the closest to customers. They are the first ones to know when a problem occurs. They are the ones who need to maintain composure in the heat of the moment. 

How they behave in the face of an angry customer will set the tone for the service recovery process. They are obviously the important ones.

Despite all of that, the frontline is much often an untrained lot in the face of failure. They sure know how to run things smoothly on a day-to-day basis, but lack the creative thinking you need to contain an anomaly.

Can they be trained to think like the top management when delivery fails? Yes. Why doesn’t that happen more often then?

Well, for starters, they are the bottom of the chain, and empowering them can be threatening, especially to the middle-level managers, who may see it as an erosion of their own authority and worth. This needs to change.

They should have the authority to take a few out-of-the-ordinary decisions on their own. You should have incentives to reward them for the same.

With training, the customer-facing employees can develop the essential communication skills and creative thinking to improve your customers’ service experience. The principles we spoke of in ‘the right mindset’ section earlier — all of that can be taught — it’s not rocket science!

Simple role-playing exercises in real-life situations are a great way to get your employees thinking about what might happen and discussing and planning for all the possible contingencies.

Motivate and train support agents
Motivate and train your support agents for effective service delivery

With the right bent of mind and the foundations laid out well, you are ready to deal with a service failure.

Keep in mind that you have a brief window to make or break. What you do in the face of a failure will decide whether you lose a customer or gain a loyal one for life.

The next four steps will help you make the most out of service failures:

3. Acknowledge, apologize, and understand

The human brain perceives an angry customer as a threat and enters a stress and defense mode. Well, throwing a punch at a customer is a sure-shot way of losing them.

When you are dealing with an irate customer, you will have to learn to keep a zen mind. You have to let go of the idea that you have to solve the problem right away — start by just listening to them.

Let them vent as much as they want. More often than not, the customer would be angry about something that was never under your control. However, you should not lose your calm.

The human tendency is to shrug shoulders off the blame — you do this and it’s over.You have to remember that you are the face of the company. Whether it was your fault or somebody else’s is not the customer’s concern.

Service delivery fails are not the time to make rational arguments with the customer.

Acknowledge that there is a problem. Tell them you are on their side.

Start with “I am sorry. I understand this must be frustrating for you. Let me quickly see what I can do for you”. This goes a long way in pacifying the customer when they are at their worst.

Oh, the most important lesson: Use the word ‘I’. Tell them that YOU will make things better, and not your manager.

“I can help you with that” is the power phrase to set you on the track to a great service recovery.

Apologizing can improve customers’ perception of your company

By acknowledging and apologizing, you would have established some understanding with the customer. In fact, according to research by Nottingham School of Economics, 45% of customers would forgive a company after a heartfelt apology.

Once you see them calm down a bit, you can now start focusing on the questions. The same questions would not sound so offensive now.

Remember to not cast any judgment at this stage. All you have to do is understand the details of the problem.

Being listened to will make the customer feel that you take them seriously. The act of talking and explaining the problem brings their minds to a rational state. They will be calmer than they were when they initially called.

This is also a good time to thank them for pointing you to the issue. A bit of ego-boosting will open doors to a rational conversation.

4. Solve the problem + go an extra mile

Once you have understood the problem, do not move to resolution straightaway — work a little on reinstating their trust in you.

Start with a positive statement such as “We’re going to solve this together”. The irate customer will start to feel assured about the resolution process.

Then, put them in the driver’s seat. Ask “What would you consider a fair solution?”. Asking a customer what they would consider a fair deal is very important to set the expectations right from the get-go.

Give them exactly what they wanted. However, do not stop there. It’s only half the problem solved. 

When a Kinepolis customer was upset because a janitor was rude to his daughter, he sent a complaint to the company. Kinepolis didn’t just apologize and solve the problem, they went above and beyond to put a smile on the girl’s face!

Kinepolis customer service recovery
Package sent by Kinepolis to delight a customer after service failure

If you seek customer loyalty after a lapse in service, you will have to resolve their sense of injustice. You will have to go that extra mile to make them feel compensated.

Give them a free upgrade. Waive shipping charges. Go out of your way to accommodate the customer. By delivering even the smallest bit more than what they expected, you can make them feel like a valued customer.

5. Follow up

Following up is a crucial part of service recovery processes. The actual measure of success is whether you have been able to preserve the investment you’ve made in the customer.

Everything you have done up to this point will be for nothing if the customer feels ‘out of sight is out of mind.’

It’s surprising to see most companies in a hurry to close the ticket. The most common parting note I have come across is “Is there something else we can do for you?” You do not have to sound like you’re doing the customer a favor by solving their problem!

Instead, ask your customer if they are satisfied with your solution. It shows that you care. It shows that you are concerned about their well-being.

The next step is to get in touch again after a few days to see if everything is working the way it is meant to. Asking for customer feedback will help you solidify your relationship with them.

Send a handwritten note that says you’re sorry for what happened and that you are pleased to have them as a customer, and any feedback is welcome.

Every time there is a new feature, reach out to them to know what they think. Keep them engaged any way you can.

You want them to remember you? Keep reminding that you care.

Do you miss following up often? Hiver gives you the easiest way to set email reminders. Know more.

The Benefits of Building an Effective Customer Service Recovery Program

Building an effective customer service recovery program can bring several benefits to a business. Here are a few key ones – 

1. Repairing Customer Relationships

When customers face problems or negative experiences with a product or service, their initial dissatisfaction can lead to frustration and possibly a decision to switch to another business. A well-implemented service recovery effort can help mend these strained relationships, ensuring the customer doesn’t feel unappreciated and overlooked.

2. Creating Brand Ambassadors

Effective service recovery can transform customers into brand ambassadors. When businesses own up to service failures and handle them well, customers may feel like sharing their positive experiences.

Say for instance a customer receives the wrong size upon ordering a clothing item via an e-commerce website. Upon raising the issue, the company replaces the size and offers an attractive discount on their next purchase as well. Impressed by this response, the customer shares their positive recovery experience on social media and with friends, effectively becoming a vocal advocate for the brand’s commitment to customer care.

3. Learning and Continuous Improvement

Service recovery allows organizations to analyze the root cause of issues, providing valuable insights for improvements. By addressing these causes, businesses can prevent similar problems in the future, enhancing their products, services, and customer service processes​.

Consider the following example; A software company receives frequent customer complaints about the complexity of its interface. Recognizing this as a recurring issue through its service recovery process, the company undertakes a comprehensive review of its user interface design. Based on customer feedback, it simplifies and enhances the interface in its next update. This change leads to a significant reduction in similar complaints and increases overall user satisfaction.

Wrapping up: Document it for the future

While it’s alright to give yourself a breather after you have managed to pacify and satisfy an irate customer, go ahead and record what went wrong and what you did to fix it. It will help you identify trends and patterns that will help you prevent further breakdowns. 

Recovery is fundamental to service excellence. The number of customer relationships saved due to well-thought service recovery programs directly impacts your bottom line and customer retention. So, be prepared to go an extra mile for every unhappy customer and you are on the right track.

Hiver is a customer service tool that works inside Gmail and is extremely easy to setup. If you’re looking for a no-frills, effective tool for your support agents to use, check out how Hiver works.

Harsh is the content lead at Hiver. He's jocular, loves dogs, and is always up for a road trip. He also reads - when Netflix gets boring.

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