Customer Service Disaster Recovery: A car for a car, a coffee for a coffee, $10 for free porn?

Let’s assume that most companies want to provide good if not great customer service.  But even those who aspire to greatness occasionally screw-up and end up with a customer service disaster.  We look at customer service disasters as a “crisis” in the way that some interpret the Chinese character for crisis as being comprised of the symbol for danger and the symbol for opportunity.  No business wants to be on the creating end of a customer service disaster, but how they react and recover is what separates those who capitalize on the inherent opportunity of the situation from those who will certainly lose the customer on the receiving end.  Increasingly, poor customer service will also cost you the business of the customer’s friends, relatives and others as user generated reviews grow and become a major part of the consumer purchase decision making process.

You screwed up and clearly have the customer’s attention, now what?

Customer service disasters – as long as they are infrequent, recognized, and acted upon – can be opportunities for increasing customer loyalty.  A few recent examples:

A car for a car.  After snowboarding all day at Waterville Valley on one recent busy Saturday, my nine year old son/boarding coach Myles and I headed down to the valet parking booth to retrieve our car. I gave the tag to one of attendants and we proceeded to hang out and wait for the car to arrive.  After 20 minutes, I sensed something was wrong and approached the valet booth.  My hunch was heightened when I saw several employees frantically searching the premises – including the trash cans – for something.  “Is everything OK with my car?” I asked.  “Well, not exactly, we seemed to have lost your keys,” they replied.

Because the valet crew, headed by a great guy named Andy, have always been incredibly nice and helpful to us, they had a lot of points in the emotional bank account.  I was more than willing to give them the benefit of the doubt that they would find the keys.  So, I gave them my cell phone, told them I was going to take Myles home on the bus and asked them to call me when they figured out what happened.

About thirty minutes after returning home, my iphone rang with a New Hampshire area code.  I answered, expecting to hear Andy’s voice with good news on the other end.  Instead I heard, “Craig, this is Tom Day, the General Manager of Waterville Valley.  I am terribly sorry that we lost your car keys.  This has never happened before and will never happen again, but right now, we want to make sure you are not inconvenienced in any way. I am going to bring one of our cars to your house for you to use.  And if the keys don’t show up by tomorrow morning, we will send someone to Boston to get another set.”  As promised, a few minutes later Tom showed up at our door with the keys to a 2009 Volvo Cross Country.  Wow.  Luckily the keys were found the next morning in another vehicle and all was well.  Actually, all was better as I remain incredibly impressed with how they handled the situation.  The service brand image of the mountain moved a few notches up in my mind.

A coffee for a coffee. A shorter, less expensive example can be seen occasionally at Starbucks.  On a few occasions when either the wait for my coffee has been longer than usual, or – I think this happened once – the baristas made a mistake with my drink, the Starbucks employees have handed me a coupon for a free drink.  Quick, easy and brand building.  Also a good way to get me back in the store ASAP.

We had a similar program when I was CEO of AIR MILES Canada.  Our customer service agents were empowered to give bonus miles to Collectors who had experienced a service breakdown.  We gave the CSR’s guidelines for the number of miles they could give out.  The number of miles available for service recovery increased with the Collector’s profitability to the company and our CSR’s had Collector profitability information on their screens.

$10 for free porn? If you lived in Tucson, Arizona and watched the Super Bowl on the Comcast network, you might have seen an unexpected interruption to the celebration following Larry Fitzgerald’s touchdown reception that put the Cardinals ahead with less than three minutes to go in the game.  According to several news reports, a Comcast employee was able to insert a 30-second clip of “pornographic content” into the game.  The next day, Comcast announced that it would provide a $10 credit to any viewers who claimed to have seen the clip and either called or email the local cable provider.  I am not sure if Comcast has a monopolistic lock on the Phoenix market and therefore do not know what alternatives customers have should they wish to leave the network, but I give them credit for doing something to admit they made a mistake and offering consideration for the service disaster.

Even the airlines are considering using data to respond to customer service disasters.  In today’s Wall Street Journal “The Middle Seat” column, Your Airline Wants to Get To Know You,” Scott McCartney writes than in the not too distant future:

An airline loses your bag or cancels your flight because of a mechanical problem.  The next time you show up at the airport, an agent personally apologizes and offers a free pass to an airport lounge for your troubles.

Several studies have been done about the cost of customer defections from poor customer service.  Bill Ives wrote an excellent post about the 2008 Customer Experience Impact Report released by RightNow Technologies.  Bill writes:

For the third year in a row, an increasing number of consumers indicate they will stop doing business with an organization or company because of a negative customer experience. This year it was 87%, up from 80% in 2007 and 68% in 2006.

But those businesses that have systems in place to identify customer service failures, admit they made a mistake, apologize and make amends for the damage are seizing the opportunity to turn a potential customer defecting and brand damaging crisis into a brand building referral creating customer touch point.

Questions:

• Does your business have a system to identify and track customer service failures?
• Are your front line employees empowered to recognize, apologize and compensate customers for service failures?
• Do you know the cost of your customer service failures and the ROI of your disaster recovery actions?

As a general question to readers, I am looking for data on the impact of successful disaster recovery programs.  What happens to those customers who are compensated when service fails?  Do they defect, decrease or increase spending?  Do they stop, decrease or increase (positive or negative) referrals?  As always, the more data and ROI calculations the better.