Lots of people talk about the power of service recovery, and now we have the data to prove its value. Not only does a good response to a bad experience cut down on sales loss, but it also increases loyalty for some customers.
In the Temkin Group report What Happens After a Good or Bad Experience, 2016, we examine consumers’ spending patterns after they have a bad experience with a company. As you can see in the following chart:
- The power of service recovery. It’s undeniable that a good service recovery after a bad experience provides excellent results. When the service recovery is very poor, 63% of consumers cut back their spending while only 2% increased their spending. If the service recovery is very good, there’s a 10x improvement in consumers who increase their spending and more than a 39 %-point reduction in consumers who reduced their spending.
- The limitation of service recovery. The advantages of service recovery really kick in when the company reaches at least a “4” on our 7-point scale of goodness. But it takes at least a “6” on the scale to have as many customers increasing their spending as decreasing their spending. That’s a pretty high hurdle.
The bottom line: It’s better to avoid problems than to recover from them.
P.S. Figure is from our CX Data Snippets that can be used in presentations