One of the key characteristics of the world’s top customer experience brands is that they are “Zero Risk” to do business with. A Zero Risk business isn’t one that never makes mistakes. Every excellent customer service company drops the ball from time to time. The secret to what makes these top brands Zero Risk lies in their customer service training, specifically, how well they have trained their employees to make it right when things do go wrong. In other words, Zero Risk means peace of mind for the customer.
A lot of organizations force their customer-facing employees to hide behind company policy. “Policy” is a word that tends to create a negative experience. During interactions, whether online or in-store, customers hate hearing the words, “Our policy is….” They understand that “policy” was created to protect the organization from being taken advantage of by customers.
Take an objective look at your rules of customer engagement and stop punishing 98% of your customers for what only 2% do. Instead, train your employees to have more charitable assumptions about customers, which means giving them the benefit of the doubt. In addition to this being the right thing to do, it is a fantastic business strategy for building customer loyalty and enhancing customer lifetime.
The service recovery paradox
Brand loyalty often results from screw-ups, from how well a company handled a situation that initially went wrong. It is a fact that a high percentage of customers will do more business with a brand after a positive resolution to a problem is made. This is known as the Service Recovery Paradox, which is where the customer actually becomes more loyal to the brand than if the initial mistake had never occurred.
It may sound counterintuitive, but the effective handling of problems can, and should, be part of your customer retention strategy. An unhappy customer quickly moves on. A happy customer is a loyal customer. And with acquisition five times more costly than simply keeping customers coming back, a healthy customer retention rate is very good for your bottom line.
Again, when a problem arises with a customer, it provides an opportunity to own that customer for life. The accompanying graph shows customer loyalty over time. When things go wrong, you can see that line taking a big dip as a problem occurs and that loyalty starts to disappear. If your business deals with it well, you can clearly see the effect of customer satisfaction on loyalty growth.
New research from Stella Connect supports this, showing that 97% of consumers across the U.S. and U.K. say that if a brand turned a poor customer service experience into a positive one by solving their problems immediately, they would do business with that brand again.
How it’s done
Being Zero Risk also tends to create heroic, legendary stories about your business that get shared among employees, customers, and on social media. I have worked with The Ritz-Carlton Hotel Company and have heard numerous epic tales of service recovery. One stellar example: A guest arriving at check-in learned their room wasn’t available and that the hotel was fully booked. A Ritz-Carlton team member booked and paid for that guest’s hotel room at their nearest competitor.
This clearly went far beyond the average customer experience. No company can make customers happy 100% of the time. (There is no mobile app for that!) But greatly exceeding customer expectations can be part of every company’s marketing strategy and business model. Putting guests’ needs first – always – is a sure way not only to build a strong customer base, but also to greatly reduce churn rates.
Another great example of brilliant service recovery is found in the Starbucks customer service experience, which also goes the extra mile. Baristas are trained to give a card to inconvenienced customers saying: We apologize if your Starbucks experience was anything but wonderful. The next time we see you, please enjoy a beverage, on us.
With every complimentary beverage, customer relationships are strengthened in real time. Such personalized experience – a reflection of the company’s customer service vision statement – leads to the right kind of customer feedback and enriches the customer lifecycle.
Becoming Zero Risk
To build a Zero Risk brand, you have to realize where you drop the ball the most and implement systems that reduce occurrences of those service defects. Then create corrective protocols and train your employees on those protocols, which they can then use to make things right.
Organizations can achieve greatness when their employees are allowed to do unexpected things, to show initiative and creativity, and to step outside the scripted path. That is when the most delightful, interesting, and amazing results occur.
John R. DiJulius III, author of The Customer Service Revolution, is president of The DiJulius Group, a customer service consulting firm that works with companies including Starbucks, Chick-fil-A, Ritz-Carlton, Nestle, PwC, Lexus, and many more. Contact him at 216-839-1430 or info@thedijuliusgroup.com.