Lessons Learned from Service Recovery (Or Should Have Been Learned)

I recently wrote about the value of service recovery programs in sports enterprises. Ironically, I was writing that article while in the midst of a customer service and service recovery incident. The process — or lack thereof — that occurred illustrates some key lessons for organizations:

  • The need for properly conceived feedback programs
  • The need for proper and consistent execution of the feedback programs, especially in their complaint handing processes.

Briefly, let me recount the sequence of events — and non-events. This will help demonstrate the value that customer feedback and service recovery can bring to an organization as well as the ramifications of poor design and execution.

Like most business travelers, I frequent one or two hotel chains to build up the benefits under the loyalty programs.  During June, conference engagements led me to stay in two of the top-line properties in one of these chains. The name of one of those brands, Ritz Carlton, evokes the very essence of the gold standard in customer service.

As with the higher priced hotel brands, broadband internet access at this Ritz hotel had to be purchased for $9.95 per day. (An aside… why is it free at the cheaper hotels?) I purchased the service from both hotels, and I had almost the identical problem in each place. Several emails got rejected by the mail server of the recipient of the email messages. The reject messages indicated that the outgoing email server was the problem. In one case the mail server was on a spam watch list and in the other case the mail server was flagged as one that has been compromised and could be spreading viruses.

Since email is a critical communication device for my business, I had this awful feeling in the pit of my stomach. What happened to my ISP’s mail servers???

The good news is that the problem was not my ISP’s outgoing mail servers, but rather the servers of the ISP service the hotels had contracted. (The rejection messages had the ISPs’ IP addresses in it, so I could trace the problem.) My concern went beyond the messages for which I got a rejection notice. How many other messages got rejected but no notice was sent to me? I don’t feel it’s an overstatement to say that the hotels’ internet access service was defective. (Isn’t this equivalent to a hotel room TV that doesn’t work or a clogged sink drain?)

The story doesn’t stop there. Since this was a difficult problem to describe in any specificity to those who don’t understand mail servers (which I really don’t!), I chose to raise the issue in writing to the hotel. On the first day in this Ritz hotel, I used the Contact Us form on their website to make the issue known, indicating I was a current guest with my name and room number. The message was supposed to be directed to the specific hotel with a promise of a response within 24 hours according to the web site.  Since I knew something about this hotel’s elaborate service recovery program — I use a business school teaching case on the hotel in my MBA classes — I was interested to see what would happen.

What happened? Nothing.

Later that month in the second hotel, a top-line Marriott in Plano Texas, I used the comment card in the hotel room to write down the issue, again with my name and room number. The card promises it will be reviewed that day by the manager or a key staff member. I dropped it at the front desk the first morning out of three I was there.

What happened? Again, nothing. Absolutely nothing.

(In this latter trip, I conversationally mentioned the problem to my client for whom I was conducting one of my Survey Design Workshops. The folks there told me to expect exactly the response that I got. The hotel had a reputation with that local business — and others — for not being responsive.  In fact, they usually steer visitors to another nearby hotel.

After these experiences most customers would have just defected to another hotel chain for future stays, but I am not the typical customer. I do not take “nothing” as a response. I did pay for the service after all. I also admit readily that I am tenacious in part to see how companies respond. I have a researcher’s mindset. Also, I preach the value of customer feedback, and it would be hypocritical of me not to practice what I preach. So, I pushed onward with my feedback!

The Ritz Carlton had a survey comment card. I typed up a half page description of my experiences and included it with my survey. The survey even had questions about whether I had experienced a problem and its resolution. I also sent this letter to the Ritz COO whose name was on the comment card. That got a response. I got a phone message from the hotel asking me to call back so they “could get my email back up and running.” Huh?  The barn door had closed weeks earlier. The person I did speak with offered me an upgrade the next time I am at that hotel, but the likelihood I’ll be in that area again is small. So the compensation offer is essentially meaningless.

I wasn’t sure to whom to write at the headquarters of Plano Marriott. (While the two hotel brands have common ownership, they have separate headquarters.) But by the happenstance of frequent travel, a few years back I sat next to a fairly senior person with this company. We had a delightful conversation — one of those rare flights that was actually too short — and stayed in touch. I wrote her asking to whom I should direct my comments. She took ownership for the problem and put me in touch with a senior person who has responsibility for the information technology (IT) at the hotels.

He and I had a good chat, and he quickly uncovered the root cause of the problems. In both cases the hotels were using ISP providers that were not on the approved corporate list. They had negotiated with these vendors on their own. This IT director thanked me for giving him the ammunition to make his case about the need for the hotels to adhere to standards.

While I like Marriotts, my confidence has been shaken. And previously I had had very positive service recovery experiences with the chain. I even wrote about that in my Customer Survey Guidebook. But in that case, it was a one-to-one interaction, and the employee offered compensation on the spot. Marriott’s company’s culture supports and promotes such empowerment. In the Ritz Carlton situation, the information system that supports complaint solicitation had apparently failed. In Plano Marriott, the company’s culture of responding to and addressing customer issues is apparently not well embedded at the top of that hotel’s hierarchy.

Most of us have stories like this, but stories have little value unless we learn from them.  What are the Lessons Learned from this anecdote?

  • Charging for defective products. Most obviously, if a company is going to charge for a premium service, it should not be defective.
  • Customer complaint solicitation systems. Having systems to solicit failure situations is critical. Both hotels had these solicitation mechanisms.
  • Act on the solicited information. Most critical is to be sure that solicited feedback from a customer complaint should not be ignored! Is there any better way to turn a customer into a lost customer than to ask for feedback, promise a response, and then ignore it?
  • Act promptly. After the fact offers to fix a problem are next to meaningless.
  • Compensate appropriately. If you are going to attempt service recovery by offering some form of compensation, it needs to be something that is truly of use to the customer. If you devise compensation schemes based on minimizing the direct cost of the compensation, you are bound to offer little of value to the customer. (I discussed Ralston’s Purina’s compensation matrix in another article.)
  • True programs that build customer loyalty. Customer loyalty is not secured with reward programs that provide rebates for frequent use. Customer loyalty is secured by 1) delivering true value in quality products and services, 2) cultivating customer relationships that demonstrate concern and empathy, then 3) providing rewards of value.

Tell me about your experiences with the customer complaint, service recovery, and rewards programs — or tell me how your company handles these customer feedback and loyalty processes.

Addendum. A reader asked if I was credited for the cost of the internet service. No, I was not. This surprised me. I did not ask, and it was not offered. All in the name of research…