Understanding the customer journey has always been a critical challenge for marketing professionals, especially as online commerce has altered the way consumers and producers interact. One important aspect of this is how companies respond to dissatisfied customers. Marketers often view such situations positively—and as an opportunity to put right problems and thereby engender more loyalty than before.
But Andrew Hill’s entertaining column, ‘How to deal with customer gripes’, questions whether the so-called ‘Service Recovery Paradox,’ which holds that a well-handled complaint will enhance the company’s reputation, still applies. The FT’s management editor argues that it probably does so long as ‘the service failure is not that severe, it has not happened before and the company had little control over what went wrong.’
He quotes Roland Rust, founder of the Center for Excellence in Service at the University of Maryland’s business school, who turned a poor experience on Unite Airlines into a case study. Among the lessons learned (‘apart from the self-evident one: never upset a customer service professor’), Professor Rust observes that companies focus too much on efficiency at the expense of customer experience; overrate the value of cash compensation; and suffer a ‘negativity spiral’ that encourages others to add their bad experiences to social media. (An article reader also mentions the importance of overcompensating customers to ensure a positive feeling.)
The more proactive companies have reacted by answering online customer gripes individually, thus helping ‘to damp down the initial complaint’ and ensuring their responses ‘stay on the record for future customers hunting for online guidance,’ Hill writes.
It’s an approach that certainly contrasts favourably with the response of an irate restaurant owner, reported in an earlier FT article which concluded that ‘slagging off a reviewer is both pointless and counter-productive,’ though in some cases it’s only fair to consider the company’s perspective too.