Three Lessons in Service Recovery

by Jeff Kober, contributing writer
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Three Lessons in Service Recovery

In my last few articles I've spoken about service recovery. I've appreciated he great responses from our readers and many of those have been posted in our Mailbag section. I've retained a few of our reader's letters for a future article or two that I think play up other important aspects of service recovery. I want to further this discussion on service recovery with three important lessons. I want to share some examples not only at Disney, but with other major service organizations. Here they are:

Lesson 1: Empower the Front Line to Respond Immediately

Suppose your child purchases an ice cream, but then drops it as she's going through the gates of the Hollywood Studios at Disney's California Adventure. A cast member walking by should be able to escort your child back to Bur-r-r Bank Ice Cream and help you to get another cone—without needing to ask permission of the cast members in that facility, much less the duty manager. Great organizations empower the front line employees to deliver service recovery rather than handing such matters over to management. There are several reasons why this works best. First, the more immediate the recovery, the more the customer feels acknowledged. The longer they wait, or the more hoops they have to go through to get that recovery the more they will feel unappreciated as customers. Secondly, immediate service recovery not only helps companies to retain their customers, it keeps the employees around as well. This is because they're empowered through training to make decisions that will satisfy their customers. Feeling like they have been heroes to customers can make them feel extremely satisfied.

Studies show that employees on the front line do a better job offering service recovery than their bosses do. Supervisors are often overwhelmed with what is on their plate and often overcompensate because their focus is simply getting something checked off their list so they can attend to other matters. When trained, front line workers provide a more balanced and reasonable service rescue.

Such service recovery needs be prefaced with adequate training and coaching. The most powerful example of this comes from the Ritz-Carlton hotel. They are known for empowering employees up to $2000 a day for handling service recovery matters. That means that a housekeeper on duty could easily comp a few room nights without ever having to ask their manager. It also means that if they request the assistance of a co-worker to provide assistance, they can rely on their co-worker to comply with the request.

This idea isn't exclusive to the pricier hotels. Each year Hampton Inn refunds half of 1 percent of its total room revenue to dissatisfied guests. In the long run this pays off for Hampton Inn because, according to one expert, for every $1 refunded, the hotel gets back an average of $7 in business from a new customer or a dissatisfied one who wouldn't have returned without the refund.* Does this happen often? No, not much—their employees are provided tools, such as the ones we've outlined previously, where they are taught when and where to provide appropriate compensation. With that comes coaching as well as daily line-ups where the staff learns from one another. What about customers taking advantage of you or trying to scam you? That happens, but much less than you think. In truth, the industry average is only 1% of any service recovery scenario.* So don't hesitate to empower the front line. You may see better results than you ever expected. They may also help you with ideas for service recovery. This is noted in our next lesson.

Lesson 2: Generate Low/No Cost Service Ideas

With so much work on our hands, handling dissatisfied guests can seem like the last straw on the camel's back. We end up giving away the business, when we really cannot afford to. That's not to say that we shouldn't provide appropriate service recovery, even being the "Hero" when an opportunity presents itself. It simply means we should be more creative in terms of identifying what that service recovery might look like, rather than dropping back and punting with expensive measures because we haven't got any other solution on hand.

I saw this play out with a particular zoo I worked with. It seemed that they handled guest concerns by always handing out a free ticket to come back to the zoo. Didn't see the monkeys? Here's a ticket to come back. Didn't like the pizza? Here's a ticket to come back. Looks like it's going to rain? Here's a ticket to come back. The end result was that they nullified the value of attending what was otherwise a terrific zoo. As a team, you should identify ideas for offering low/no-cost service recovery to your guests, whether they be internal or external. These ideas could come from the ?Magical Moments? you already provide. ?Magical Moments? is Disney's term for providing orchestrated 1:1 service experiences such as being selected by Merlin to pull the sword out of the stone in Fantasyland, or being asked to be a part of Mickey's Jungle Jammin' parade at Disney's Animal Kingdom.

You may even want to create a contest to reward the individual on your team who comes up with the best idea for service recovery. The idea is to provide the best service recovery possible at the lowest price. I saw this in action at Disney's first vacation club resort, Disney's Old Key West. They held a contest among their cast members: Come up with the best low or no cost idea for service recovery, and win a fantastic prize. It seems the prize was a high-end television or theater system. It was worth a considerable amount of money and the contest was open to all employees with several prizes involved. The effect was outstanding in that some really creative ideas were brought to the surface—ideas that in turn saved the company tens of thousands of dollars when service recovery was needed to be shared.

Lesson 3: Net Your Recovery

About two years ago I hosted a group to dinner at Wolfgang Pucks followed by the early showing of La Nouba at Cirque du Soleil. The decision to have dinner at Wolfgang Pucks was an easy one. The food tastes great, and it's location is ideal—only a few steps to the show. The challenge was that we only had about 90 minutes from arrival to show time. I wasn't told that this would be a particular problem at the time we booked the 20 some participants for dinner. However, as we arrived, the service staff began to show some stress over having to deliver the meal in a timely manner. They offered a three-course meal option to the group, and the end result was that we were running out the door barely having finished the main entre.

In a display of service recovery, management took it upon themselves to make up for the event by hosting us for dessert after the show without cost. That ended up working very nicely as we had a wonderful time chatting about the La Nouba show while enjoying dessert on the patio outside the restaurant.

Fast forward to a few months ago. We took another group of approximately the same size to Wolfgang's. It was the first time we'd taken a group to Wolfgang's since that previous experience. Only this time we decided to arrive much earlier, we gave ourselves over two hours to enjoy the meal and to be in our places on time for the show. That said, nothing changed. While we did not order from a three-course meal option, the service still took forever. It took well over an hour from the time we ordered the meal to the time it arrived on our plate. In the interim, some received soup or a salad, but many simply sat there the whole time.

Again, I love the food at Wolfgang's, but it took some 40 minutes from when we were seated to when we ordered, and then over an hour for our entres to arrive. Again, our group had to run out at the last minute to catch the show, and many did not have time for dessert or coffee. Again, management came to the rescue. They offered free dessert after the show. Like the zoo example, it seemed as if they had a "one solution fits all" approach to service recovery. That was not a feasible solution given our schedule. We were unhappy that they had failed to attend to this need, although we had made it very clear our need to attend the first La Nouba show. They went back and forth for some time, and then they decided on what I thought was an amazingly poor gesture, to comp the gratuity. I didn't think that our servers were necessarily to blame for our failure to get food out (though one might debate whether they were advocating for us), but for management themselves to offer to give away their pay seemed incredulous to me. What accountability was being made on the kitchen staff?

Finally, they offered the whole meal for free. I like not paying as much as the next person, but that was a little over the top as well. We emphasized the need to pay the gratuity, and did so before we left.

Here's the message: In over a two-year period it became clear that they had dropped back to a "Come back for free dessert" policy rather than fix the problem they had in the first place. Why didn't they simply fix their processes so as to assure a meal in a reasonable time frame? That's what I mean by Netting Your Recovery. In an earlier article, I spoke about service netting as opposed to service recovery. My emphasis was on the idea that it's better to have a net in place (as in the analogy of a high wire act), than to simply call 911—which is more of a service recovery measure. When you offer service recovery—and you end up doing it frequently for the same problem—that's clearly a sign that you need to create better nets.

In all of this, know that service recovery and netting is not an easy concept. But it is where the rubber meets the road. Great organizations succeed when they implement such measures. After all, the magic behind the business, isn't some wand or spell, it's the effort you make to create loyal customers day in and day out.

*Companies give front line employees more power", by Gary Stoller, USA Today, 6/26/2005