The Importance of a Service Recovery Strategy

Creating a service recovery strategy is a multi-step process. While it may seem like businesses just need to provide unhappy customers with financial compensation, studies have shown that this is a poor substitute for a good recovery process. In the eyes of many consumers, effective service recovery is dependent on several factors.

A study by the International Journal of Service Industry Management analyzed service breakdown and service recovery — specifically how speedy service recovery, compensation, and apologies affect customer satisfaction. When a service failure is revealed, an immediate response is required to ensure success. Regardless of how or when the failure is identified, studies indicate that recovery outcomes like compensation, timeliness, and interactional treatment all have a combined effect on post‐recovery satisfaction.

More importantly, it was noted that speedy service plays a critical part in successful service recovery. The quicker businesses react to a negative experience, the higher the satisfaction, regardless of compensation or apology. However, an apology and speedy recovery increased customer satisfaction more than compensation and speedy recovery. This suggests that while customers value compensation, a speedy service recovery process and sincere apology lead to greater satisfaction than simply buying back guest loyalty. The highest customer satisfaction levels were observed when apologies, compensation, and speedy service recovery were combined to form a comprehensive service recovery strategy.

Customer service expert Robert W. Lucas agrees, stating that the best service recovery strategy is to identify the cause of the service breakdown and remedy the problem immediately.

In order to capitalize on speed in service recoveries, strategies need to be developed, implemented and updated regularly to ensure they are working as effectively as possible. Here are some questions that managers should be asking when evaluating their approach to service recovery:

1. How do I minimize the cost while increasing the effectiveness of our service recovery strategy?

In order for a strategy to be sustainable, it must be cost-effective. Before implementing a service recovery strategy, management should have a clear understanding of the resources they have, the resources they need, and their budget. To maximize a hotel’s most important resource, its employees, it is worth setting aside time for additional service recovery training that is in accordance with the new strategy. After implementation, every effort should be documented and analyzed so hoteliers can gain greater insight into what’s working and what’s not. This will help the hotel address the parts of their strategy that may not be delivering results.

2. What are my most common service failures? And how can I reduce the frequency at which they occur?

There are plenty of ways for hotels to find their most common service failures, one being reading and studying online reviews. While the majority of customers may not feel comfortable voicing their concerns in person, more and more guests are willing to voice their frustrations online. Though negative online reviews are not ideal, they do provide some valuable insight. By reading negative online reviews, the hotel can better understand their most common service failures. The number of reviews about a certain topic, like slow check-in, reflects the prevalence of the problem.

The frontline staff could also be a useful resource in determining the most common service failures, as they are in constant communication with guests. They should be trained to ask guests about their experience during important touchpoints and to generally reach out to guests during their stay. Some guests may not feel comfortable bringing the issue up themselves, so having attentive staff may give them the push they needed.

Lastly and arguably most importantly, hotels should have a system in place to track and analyze the service failure data. With access to concrete information, it is much easier to figure out which issues are most common, and in turn, reduce their frequency.

Related: How to Increase Guest Satisfaction Scores through Technology

3. What tools are available that can assist in addressing service failures before they are shared online?

There are plenty of tools available for hoteliers, however, not all tools ensure effective in-stay service recovery. The most common in-stay service recovery tools revolve around SMS messaging — which allows guests 24/7 contact with the hotel’s frontline staff. However, the nature of these tools is always request-based, and the limitations of  SMS-dependent messaging tools do not provide any insight into the guest’s true feelings or experience.

Solutions like Helix by MicroMetrics solve this problem. Helix goes beyond basic request-based tools, and gives hotels an accurate understanding of guest experiences in real time. Through this, hotel staff can focus on solving the root problem, not the symptoms. By completing and thoroughly resolving guest issues in-stay, guests will feel understood and valued — and only write positive reviews.

These questions form the basis for creating or reviving a service recovery strategy. Tools are a key element of this method, and new technology has enabled guest satisfaction in new ways. As more and more guests rely on mobile devices to communicate, leveraging this interactivity is key to mastering timely service recovery.

Check in with guests before they check out learn more about how Helix provides real-time alerts and engagement that fuels in-stay service recovery opportunities and download our case study here.