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Second to None

The Service Recovery Paradox: How Far Can It Go?

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Found in:    joyX | Consumer Products or Services | Financial Services | Healthcare | Restaurants | Retail/Ecommerce

Elderly couples are always telling younger couples that successful relationships require the ability to navigate and overcome obstacles as a team, ultimately bringing the couple closer together and making them stronger.  The way in which someone handles conflict can reveal a lot about that person.  The same concept is true for the Service Recovery Paradox (SRP), a phenomenon that refers to the scenario in which a customer’s loyalty is increased after a company corrects a mistake, more so than had the mistake never occurred. So is this something that companies should strive for?  Are brands missing opportunities to increase their customer loyalty by being too good at customer service?  In short, no.  While the SRP is real, it is only effective in certain situations.

How to Harness the SRP

So the SRP is not a complete myth.  When a company puts in the effort to fix a mistake or problem that took place, it communicates to the customer that their loyalty and satisfaction are meaningful to the company.  The customer wants to feel that their expectations are being met, and that they are important to the business.  While seamless customer service may fulfill the former, the effort contributed towards fixing mistake more clearly communicates the latter.  

In order to reap the benefits of the SRP, your customer service team needs to be prepared to repair potential damages.  Establish protocols that coincide with issues that may arise so that your team can address them with speed and consistency. The more proactive a company is in preparing for mistakes, the quicker they are at finding a solution when they do occur and the less time passes in which the customer’s frustration can increase.

Additionally, solving issues shows customers that future mistakes will be addressed and tended to if need be.  Humans are generally forgiving creatures.  According to a 2018 study, our brains are wired in a way that allows us to forgive those around us in order to reach our full social potential and maintain social harmony.  

The brain forms social impressions in a way that can enable forgiveness…because people sometimes behave badly by accident, we need to be able to update bad impressions that turn out to be mistaken. Otherwise, we might end relationships prematurely and miss out on the many benefits of social connection.

At the end of the day, customers are human and they understand that companies are comprised of humans as well.  Mistakes are inevitable; in many cases, it is the way in which a company handles the mistake that determines the resulting relationship. 

It Doesn’t Always Work

While the SRP does in fact work in some cases, there are other scenarios in which the SRP does not apply.  According to a study by Magnini, these are incidents that do not lead to increased loyalty.

Big Mistakes

The SRP is only valid when the customer perceives the issue to be minor or inconsequential.  The customer is oftentimes able to forgive minor inconveniences, or small mistakes, with the proper reaction and consolation from the company.  Yet when the issue is large enough to leave a lasting negative impression, such as a valet service spilling red wine on a  vintage car’s white seats, it can be damaging for the customer relationship indefinitely .  When something like this happens, despite efforts by the business to smooth the situation, it is likely that the customer could feel strongly enough to terminate the relationship.    

Repeated Mistakes

If the customer has experienced numerous complications with a company, no matter how much the corporation apologizes, the customer’s loyalty will deter instead of skyrocketing.  Imagine if a friend kept making small mistakes, but they provided an adequate apology each time, so you forgave them.  What is a few small mistakes?  But as they continue to make these mistakes over and over again, eventually the apology loses its meaning.   The same goes for the B2C relationship.

Especially due to the unlimited options that are available to consumers, it is crucial to learn from past mistakes and improve your customer service program. Repeated occurrences of the same mistake, or a slew of other small mistakes, will eventually wear on the customer’s trust and loyalty. 

If  you Could Have Avoided it in the First Place

The SRP is more effective when the customer believes that the issue was due to forces that were outside of the company’s control.  For example, if a plane is delayed due to a major ice storm, the inconvenience cannot technically be attributed to the company.  It depends on how the company handles the problem.  By taking measures that demonstrate an intention to alleviate the frustration and find a solution, customers are able to appreciate the company’s effort, leaving their relationship with the business relatively unscathed.  Yet when the issue resides on the company’s end, and it is something that could have been avoided, that same appreciation will not be present.  

Furthermore, it has been suggested by research that even when the SRP is effective in increasing customer loyalty, it does not necessarily lead to better repurchase intentions, increased word-of-mouth recommendations or improved brand image. . 

While the SRP may be good news for companies that are currently struggling with their customer service interactions, it is not something that businesses should strive for.  Customers are drawn to businesses that consistently deliver an experience that aligns with their expectations.  Brands should never aim to sabotage their customer service program simply to increase loyalty, but they should prepare to take advantage of the situations in which the SRP is relevant.

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