Compensation for service failures can be a tricky subject. While you want to make guests happy when dissatisfied, you also want to protect your product and not give away the farm. Without a proper service recovery strategy, you can quickly burn cash you’ve rightfully earned, especially if your staff is not well-equipped to jump in and save the day.
Read on to learn strategies on how to recover from service failures in a way that makes you money and how to prevent future service failures from occurring.
What is service recovery?
One of the keys to good service recovery is a fast reaction time so that the failure doesn’t linger in your guests' minds, and they have time to get angry and possibly even defame your venue to others and publicly online.
Effective service recovery relies on preparation for such situations. Providing your staff with the appropriate information to support guests can mitigate the impact of any unexpected setbacks.
What is the four-step process for service recovery?
The four-step process for service recovery is a strategy used in customer service to address and resolve service failures or issues effectively. It aims to turn a dissatisfied guest into a satisfied one. The four steps are known as the "HEAR" framework:
‘Hear’ involves actively listening to the guests’ complaints or concerns. Encourage the guest to express their thoughts and feelings fully. Show empathy and understanding by acknowledging their issue. Give them your full attention to ensure they feel heard and valued.
Once you've heard the guest's complaint, empathize with their situation. Let them know that you understand their frustration or disappointment.
Apologize sincerely for the inconvenience or problem they've encountered. Empathy helps build a connection with the guest and shows that you genuinely care about their experience.
Take immediate action to resolve the issue. Determine the best course of action to address the problem and inform the guest of what steps you will take to rectify the situation. Be transparent about the process and timelines. Ensure that the guest is involved in finding a solution, if applicable, and follow through on your promises.
Step four involves going above and beyond to make amends and restore the guest's trust and satisfaction. Offer a solution that resolves the immediate issue and shows appreciation for their patience and loyalty. Ensure that the guest leaves the interaction feeling valued and positive about your service.
The four-step service recovery process helps organizations handle guest complaints effectively, turning potentially negative experiences into opportunities to strengthen guest relationships and loyalty. In the next section, let’s talk more in-depth about the third step (Act).
How to action step three (Act) to make you money
In the 4-step process for service recovery, the third step is about solving the issue for the guest. When determining the best solution for your guests, aligning it with the actual effect of the service failure, which is within your control, is always best. The recovery should fit the failure as closely as possible. Did the guest complain about the time wasted? Your first response should be to replace the lost time. Food was cold? Replace it with hot food.
The service recovery example that secured long-lasting guest satisfaction and loyalty
In episode 5 of The Guest Experience Show, Ben Story shares a recovery example he was a part of as a guest, and the resolution *might* be considered borderline excessive.
The quick synopsis is as follows: Ben (and about 20 friends) showed up at a restaurant at Universal Orlando planning to watch a sporting event. The group confirmed that the game would be available to watch at the venue before their arrival. But when they arrived, they became informed that the channel wasn’t available, thus disrupting their plans for the afternoon. When expressing their concern, the manager comped everyone’s meals and provided theme park admission for all 20 guests and express access. When adding up the value of the compensation, Ben estimated that it saved his group about USD 3,000, which they were fully prepared to spend, all over an honest mistake and misinformation.
We dissected the story and looked at it in a couple of ways – first, it was clear that management could have gotten away with giving much less and still resulting in a satisfactory result. The second, however, was when breaking down everything provided as compensation. It could best be defined as a small investment made in future loyalty, equating directly to revenue and positive feedback that traveled to the other side of the world. Even if the compensation was disproportionate to the failure, the outcome was still positive.
The ultimate result
The money saved was put back into their experience, as Ben and his group found additional ways to spend the money they otherwise would not have spent. To take it a step further, guests in that group decided to return to the park, bring their families, and spend even more money than they would have on the initial visit. This is related to the manager's willingness to help turn around a bad situation.
Revenue-generating service recovery ideas you can try
When looking at ways to generate revenue from service recovery, look at how each of the following can fit into your compensation strategy:
- Free admission
- Discounted admission
- Priority access/VIP entry
- A complimentary upgrade
- Discount on food & beverage
- Free food & beverage
- Photo opportunity with a character
- Additional loyalty points/credits
- Free arcade play
Now, take any of these bullet points and add “on a future visit” to the end of it. While it may come in handy to offer it on the guest’s current visit (and in Ben’s case, it did), making it go into effect on their next visit will require them to return. Even if their admission is free on their next visit, they will have many opportunities to spend when they arrive. And when you are fighting to win their business back, this is a minimal investment (and usually no cost) with a high value for the guest.
Preventing service failure going forward
We’ve all heard it before: prevention is better than cure. When it comes to service recovery and complaint resolution, have you heard of the adage: solve for the perception of the complaint, not the complaint itself?
Of course, this doesn’t apply in all service recovery situations, but it is an interesting theory to remember when taking action to prevent future service failures.
Start by gathering your previous negative feedback, complaints, and records of service failures. Look for common themes or recurring problems and brainstorm solutions for your most significant friction points.
A key thing to remember is that the solution is not always the opposite of the problem. The key to making changes is to solve for the perception of the complaint instead of the complaint itself. Doing this is often much more productive.
For example, consider a situation where you consistently receive complaints about extended wait times. The opposite of this issue would be to reduce queues, but circumstances might limit your ability to do so, especially during peak seasons or when operating at maximum capacity.
Recognizing that the perception of wait times can vary significantly among guests is essential. What one person considers a long wait, another might find reasonable. Addressing this perception issue involves creating an environment where guests feel their time is passing quickly or used effectively.
Possible solutions include introducing distractions in the queue, such as engaging backstories, games, or even mirrors. Additionally, providing an estimated wait time, even slightly overestimated, can help anchor the guest's perception of the time displayed. When the actual wait time is shorter, guest satisfaction levels will be higher than if you had provided an entirely accurate, to-the-minute wait time. Ultimately, it all comes down to how guests perceive the wait time.
These operational solutions directly impact your guests' perceptions, and you'll discover that they are quick to implement, highly efficient, and cost-effective.
Learn more about this theory here: How To Create a Feedback Culture At Your Venue
Service recovery doesn’t need to be an expense — it can be an investment in future loyalty and spending
Remember the two biggest keys to service recovery: you have so much to offer (and in most cases charge for) that has such high value to your guest but minimal or no cost to you, and creating an offer that goes into effect in the future will require the guest to return and continue spending money.
Finally, always ensure that your frontline staff are fully equipped to resolve various service failures without needing assistance from a manager.
Service recovery does not need to be an expense. It should be an investment in future visitation, satisfaction, and loyalty.