The harsh reality is that even with the most compact contingency plans in place, your business can’t always foresee every eventuality. Errors can happen with orders, suppliers might have setbacks, and office service connections may be down.
However, even with all of these inevitable issues, it is how your organisation chooses to handle these setbacks which sets your business apart from its greatest competitors. In fact, it is this very customer service-based cycle that has led to one of the greatest organisational phenomena today: The Service Recovery Paradox (SRP).
What is SRP?
For almost three decades, countries across the globe have marvelled at the concept of SRP; using its theories and philosophies as the foundation for all of their customer experiences. This global phenomenon circles around the belief that a company’s ability to recover from delivering a poor customer experience will, in turn, earn them stronger customer loyalty than if they’d experienced excellent customer service in the first place.
Now, this can admittedly sound rather paradoxical, but that’s the incredibly genius (and ironic) nature of this concept. It is based on the idea that a customer will appreciate your organisation’s commitment to rectifying the error. In response, they will offer you your greatest asset: their loyalty. This is where the customer-company bond is solidified.
To put it simply: see this concept as your business’s great redemption story. And who doesn’t like a happy ending?
Seeing SRP in action
The best way to illustrate this concept is to look at a scenario of how SRP is able to create a positive narrative around your organisation following a service failure.
For example, let’s say that your client ordered a shipment of fragile items to be delivered and they arrive at the client’s home broken. Following their lodged complaint, instead of merely sending the fixed items, you offer free delivery and a few extra items – on the house!
The idea here is that your customer looks at your company’s swift recovery rate (and actions and appreciates the sentiment and additional effort. And that is where your company stumbles onto gold. It is the power of sentiment and effort. People do not forget how an organisation makes them feel. This puts your company in an exceptionally good position as you will most likely now benefit from an incredible marketing tool (that is absolutely free): word of mouth.
Factors involved in SRP
There are admittedly numerous factors that impact and influence this paradox. However, it is worth noting that there are a few elements that your organisation should consider when looking for ways to effectively and efficiently problem solve.
The saying “go big or go home” couldn’t be more applicable in the case of SRP. If a customer perceives their issue to have been a large-scale issue, then your SRP needs to be rather strong in order to overcome their dissatisfaction. The magnitude of the error should be met with an applicable response tactic. Essentially, the bigger the issue, the bigger the gesture needs to be.
Now, in the event that your customer believes that the issue at hand was preventable, they would typically be more inclined to distrust your company. In this event, it is important that you remain upfront and transparent. According to SRP, customers are more likely to forgive a company that effectively controls what they can and manages the things that they can’t.
When we refer to stability, we are looking at the internal calculations that your customers are doing with regard to whether or not they believe that a similar failure is likely to reoccur in the foreseeable future. They will, therefore, assess whether this was a temporary failure (interpreted as ‘unstable’) or a permanent failure (seen as ‘stable’).
Simply put, if they believe that the same issue will occur again, they will interpret your service delivery as ‘crumbling under stable causes’ meaning that they will avoid your company in the future.
How do I apply SRP to my own establishment?
Every organisation will apply this theory in different ways that are applicable to your specific industry as well as your particular business goals. However, the common denominator that continues to pervade this theory is, the idea that organisations need to reassess how they champion their complaints. See these complaints as a learning and growth opportunity. SRP highlights the critical importance of dissecting your customer experiences – particularly when errors occur – and using it as an opportunity to make improvements to areas where you may not have realised needed improvement.
Always actively encourage your customers to share their feedback with you, as their reviews will ultimately later become your arsenal. Allow this information to navigate your corrective actions and allow it to become a mechanism for exceptional customer experiences.
If you need assistance further unpacking SRP or finding out how best to go about infiltrating your business structure with this concept, lean on our expertise by tapping here to get in contact with our team!