The service recovery paradox - why you should always provide good customer serivce

Discussion in 'BlackHat Lounge' started by pxoxrxn, Jun 15, 2015.

  1. pxoxrxn

    pxoxrxn Supreme Member

    Dec 21, 2011
    Likes Received:
    Allot of members here are in the service sector and so you might enjoy these statistics. If you've never heard of the service recovery paradox it simple means: If a service failure occurs and the customer is satisfied with the result of their complain, they are more likely to be a loyal customer than if the service failure never occurred.

    Research has shown that only 5% - 10% of unsatisfied customers will complain. This is a problem because complains are free market research.

    People in high socio-economic levels are more likely to plain. Their education, higher income and greater social involvement give them confidence.

    People who are satisfied with the result of their complain are 15 times more likely to recommend your service, compared to dissatisfied complainers.

    Intentions to repurchase range from 9% to 37% for dissatisfied customers that do not complain. For major complaints, the retention rate increases from 9% to 19% when the service firm offered a listening ear but could not resolve the problem. If the problem could be solved to the satisfaction of the customer, retention rates increase to 54%. The highest retention rate is 82% for customers that complained and received an on-the-spot fix.

    So why not fuck it up and then repair the problem?
    1) Service recovery is usually more expensive than just delivering the service correctly.
    2) Not all services can be recovered (wedding photographer)

    If a customer received a service fuck-up twice, the paradox disappears.
    • Thanks Thanks x 1