The Service Recovery Paradox and the Importance of Good Customer Service

Posted: 27 July 2016
It is a fact of business that any company, no matter how well organised, will occasionally experience a service failure. This failure, whether big or small, can make or break relationships with customers. However, if service failures are recovered correctly, they can actually lead to an increased customer loyalty and trust.

The Service Recovery Paradox explains that a customer who experiences service failure, and has their issue quickly and efficiently resolved by a service agent, is actually likely to be more loyal to the company than they would have been without experiencing failure. A customer who experiences good service recovery after a failure will continue to do business with your company 70% of the time, according to Lee Resources.  

The takeaway from the Service Recovery Paradox, of course, isn’t that service failure is an acceptable practice of a good business. The real message is that good customer service will always be one of the most important factors in any business’ success. The two top reasons for customer loss are that they feel poorly treated, and don’t have issues resolved. So, the real issue is not always the failure itself, but how your customer service agents respond to failure or customer issues.

Perhaps the most stunning figure of all is that customers only get asked their name 21% of the time in service encounters. If this figure doesn’t speak volumes as to the lack of genuine personal attention provided by most companies, nothing else does.

But what does good customer service recovery look like?

A good service agent will ensure the customer feels that their issues are being acknowledged and solved, and update them on the process. In a world of automated voice recordings and electronic replies, a customer that finds themselves talking to a real service agent, who listens to their issue or question and accurately responds to the core issue quickly will already begin to feel more forgiving after experiencing service failure. Above all, customers simply want the issue to be acknowledged and apologised for, instead of being denied or danced around. Don’t make your customers feel like they are part of the problem; enable them to be part of the solution.

If your company can deliver good customer service and exceptional service recovery after a failure, your customers will feel valued, and hold a greater emotional connection to your company. Loyal customers means greater sales and greater customer retention, both of which pay dividends for both reputation and income.