Getting customers is expensive, and keeping customers is no cakewalk. Photo by Clem Onojeghuo on Unsplash
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Everyone makes mistakes. When you screw up and say, “I’m sorry. That’s our mistake,” it’s good customer service, but not service recovery. Most organizations never admit mistakes, and fewer than 1% practice service recovery.
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Keeping customers is critical to your growth. Gaining a new customer is expensive. When you lose one, it’s super-expensive. Not many employees know the lifetime value of a customer, so if one has a problem with a $25 purchase, they will shrug and say, “Big deal. It’s only $25.” However, the lifetime value of that customer could be $1,200, $3,500, or even $11,000. For example, the average Ritz-Carlton customer will spend $250,000 with the Ritz over their lifetime.
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Comments
Watched managers at a…
Watched managers at a McDonalds I worked at in college do this regularly - giving away ice-cream cones and gift certificates for free food on a future visit. However, stopped at a McDonalds while traveling a few years ago and witnessed a mother with 4 small children try to get her order corrected and the manager insult her and her children rather than correct it or give her free ice-cream or certificates. I thought at the time: this mother will never bring her children to this McDonalds or perhaps any in the future (and her kids might not take theirs in future years). The store probably throws away more food in one shift than it would have cost to help this mother.
Large operation, one couple
My favorite example of excellent customer service, and customer recovery, involves a major Las Vegas casino. My wife and I had left our mobility scooters with the valet parking while we made an excursion. Upon return, one scooter was missing! The attendant immediately Informed us that his supervisor was already in contact with both security and the bell desk to procure a replacement. Within 2 minutes that supervisor arrived, apologized, and informed us that, while no scooters were available from the bell desk, they had already placed a rush order for a third-party rental. He also indicated that the operations manager would be there shortly. Within 5 minutes, that gentleman arrived, also apologized (for the incident AND taking so long to get there) and informed us that the rental unit had been expedited and would be there shortly. Even though I indicated that would not be necessary, he indicated he would remain until the matter was resolved. Speaking with him, in the interim, I discovered that he was, in fact, THE operations manager, responsible for hotel, casino, and all services. The scooter arrived as promised, and the venue comped us both scooters for the entire stay. I have no way of knowing if the fact that we had no issues obtaining difficult tickets, or difficult restaurant seatings, was just pure luck, or the management was assuring our continued patronage.
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