When anyone at ABC talks with a customer, a “service encounter” is occurring. At that moment, the customer feels that one employee is the company. If we get bad service from a waiter in a restaurant, we can think the entire restaurant is poor.

Everyday many ABC teammates talk with or visit customers. The combined experience of all of these service encounters adds up to 1) part of the customers’ perceptions of how good our service value is. The rest of the customers’ service value opinion is based on: 2) how well we execute the hard, measurable service factors – the Big 8 of service excellence; and 3) personal biases. For example, some customers will only buy from local suppliers even if the service is terrible compared to alternate sources.

Anyone of the three parts of a customer’s perception of service value can makes us or brake us. So let’s do what we can to control service encounters and the Big 8 super well. This equals great value to the rational, objective customer. For biased customers, we have a psychological sell; identify the bias and try to cater to it within reason.

We can measure the Big 8, but how do you measure the quality of service encounters? You can’t, but there are four things we all respond to in service experiences. They are:

1. Genuine care and concern for the customer. If we genuinely like the person who pays our wages, the customer will sense it and respond in kind with loyalty.
2. Quick solutions to problems. Even if we don’t know the answer to a customer’s problem, if we care enough to hustle to find it, the customer is pleased.
3. Spontaneous and flexible behavior. Act and emote naturally; don’t be a smiling robot. And be flexible in dealing with small problems and policy deviations. For example, if a customer is 50 cents short of a minimum order, take it. Customers like to do business with people who are entrusted by management to be flexible as opposed to those who say “Sorry, we can’t do that here”; or, “I have to check with headquarters to see if I can deviate from policy.” ABC entrusts lots of power and data to the branches and all employees so we can take care of the customer flexibly and quickly.
4. Recovery – the ability to cure mistakes heroically and quickly. Customers know things can’t always be perfect, so how do we bounce back from defeat? Do we: a) listen carefully to understand the problem correctly; b) apologize and act quickly instead of making excuses and telling them about our problems and constraints; and c) go the extra step to offset the negative feeling that the customer might have to turn negative feelings into positive ones. (See Economics of Heroic Recoveries that follows.)

It is easy to be a gracious winner; true character shows when we have to deal with defeat, like a service failure.

When we encounter the customer, be alert, enthusiastic and responsive; practice the four guidelines to make every service encounter count. If we take care of the customers, they will take care of us.

THE ECONOMICS OF HEROIC RECOVERIES

To cure mistakes quickly with extra effort is one of the “Four Guidelines for good service encounters. This guideline also makes good economic sense. Consider these statistics for customers buying retail services:

1. If a firm heroically cures a mistake, 95% of the customers will not only return, but they will also tell five friends that the firm has good service.
2. If the firm doesn’t cure to the customer’s satisfaction, the number of customers who will return plunges, and they will tell an average of twelve friends that the firm has poor service.
3. About 15% of the American adult population are chronic complainers. If a firm doesn’t cure well for these types, they tell 24friends about it.

So, the cost-benefit decision is this: We have to weigh the cost of the cure against the lifetime stream of gross margin dollars that we might get from the customer, and the value of getting 5 positive testimonials from a customer instead of 12 negative ones. Heroic recoveries make good economic sense. But, how do you do one?

The steps to a heroic recovery:

0. Listen patiently and carefully; the customer may need to vent some emotions and remind us of some past mistakes too.
1. Clarify and confirm what the current problem is. It is easy to misunderstand the customer and start addressing the wrong problem. (“So Mr. Customer, the problem you are immediately concerned with is… Is that correct?”).
2. Agree with the customer if at all possible (“You are right”).
3. Admit failure; apologize, and reaffirm our ability to be better (“We messed up. Please accept our apologies; we can do better next time”).
4. State how we can solve the problem – now. If you’re not sure, ask the customer what they consider to be a satisfactory solution.
5. Do something extra if possible (e.g. Service Excellence Guarantee Discount Coupon or ask “what else can I do to leave you happy and loyal?), to create an extra-effort impression.
6. Confirm satisfaction on the cure (“Will that take care of it all for you?”).