• Service Essentials – Go the Extra Mile in Service Recovery

    My brother lives on a beautiful property in Florida, USA. His idyllic

    “log cabin” is surrounded by tall trees. It backs onto a lake. He can

    look out from his home to the deck on the lake from where he

    launches his boat. Sounds good doesn’t it? Joe Wade, from

    Southern Tree Services, Florida, came into my brother’s life very

    recently. And in the process of putting two holes in my brother’s

    beloved deck and ruining some furniture in the process, Joe has

    created two raving fans – my brother and my sister-in-law – who

    eagerly tell everyone about him. This is a story of how going the

    extra mile when there is a service failure can reap very rich rewards.

    Let me explain.

    ©2009 TMI Consultancy Sdn Bhd | www.tmimalaysia.com.my.my | Page 2 of 4

    Joe’s company is in the tree business. It removes trees. It trims

    trees. That’s where the story begins. Southern Tree Services was

    hired by my brother to remove three trees from his property. Within a

    relatively short time of starting, there was a loud and unexpected

    “crunch”. A 400 kilogram branch that they were working on twisted

    and fell the wrong way – right onto the boat deck. It left two gaping

    holes and destroyed two deckchairs. Not a good start to the job in

    anyone’s books. My sister-in-law, Pamela had great presence of

    mind. She brought out a plate of cookies and made sure that

    everyone was okay. No one was hurt. It is what happened after that

    created the Wow and which helped to win Joe two loyal customers

    and even more business

    The broken furniture was made of plywood created from recycled

    milk cartons. Two chairs were smashed, but the table and remaining

    chairs were intact. After inspecting the damage, Joe, without

    hesitating, handed my brother his credit card and told him to buy

    replacement chairs on the internet. At 7am the next day, Joe’s

    workmen were on the property. They replaced the damaged boards

    in the deck. But Joe arranged for much more than that. He wanted

    the deck to look as if there had been no damage at all. So he

    arranged for the whole deck to be stained. Then he saw that the

    floorboards on the porch no longer matched the boards on the deck.

    So he arranged for all of the furniture to be removed from the porch,

    pressure washed and then stained the porch floorboards with two

    coats. Joe arranged for the railings on the porch to be stained as

    well. As if that was not enough, Joe’s company trimmed other trees

    on the lake. He wasn’t asked to do this. He saw that they needed

    doing – so he did it.

    All in all, the deck and the porch looked better than it did before the

    accident. As you might imagine, this was not a profitable job for Joe

    Wade. The total bill for the original job was USD$2190. The cost of

    the furniture replace was USD$1297. The staining of the deck would

    have cost around USD$700. Add the trimming of the trees on the

    lake, and the bottle of champagne that Joe later bought (and

    shared!) with my brother and sister-in-law, the job cost him over

    USD$2300.

    Quick service

    recovery

    A loss after

    service

    recovery led

    to subsequent

    profits

    ©2009 TMI Consultancy Sdn Bhd | www.tmimalaysia.com.my.my | Page 3 of 4

    The accountants would say that Joe made a loss on this job. But the

    business people would see it totally differently. My brother started

    telling his neighbours about Joe. The result was that Joe won two

    new clients with 8 tree removals. And Joe will continue to get

    referrals from his happy customers.

    If Joe was concerned about his immediate profit on this one job, he

    could have done the bare minimum to replace the floorboards. But

    he had a different attitude. He wanted something more valuable than

    a short term profit on this job – he wanted to have a happy, loyal

    customer. As he said to my brother, “This problem gave us the

    chance to show you how good we are.” Nice attitude. And, from a

    customer point of view, my sister-in-law said, “There are lots of tree

    cutters out there. It’s how they react when something goes wrong

    that makes them stand out.”

    I have quoted complaints statistics in this magazine in the past. Just

    to remind you, 90% of unhappy customers will tell, on average, 9

    other people. It is when things go wrong that you, as the service

    provider, will be in one of two positions – to create unhappy

    customers who complain to lots of others about you, or you can

    create loyal customers who keep coming back and become

    ambassadors for you. The smart businesses look beyond the

    immediate return on transactions that go wrong.

    The Ritz-Carlton understands and applies this principle. For

    example, employees in The Ritz-Carlton KL are empowered to

    spend up to RM2000 to keep a customer happy. This powerhouse

    global service brand applies an unusual form of ROI calculation on

    guest transactions. – it aims to maximize life-time value of the

    customer. By giving a little to keep a customer happy, The Ritz-

    Carlton understands all too well that the customer will keep coming

    back and will tell others about the hotel as well. And, after all, the

    holy grail, the ultimate prize for any business is when you have a

    base of repeat business and an army of people who do your

    marketing for you!

    Smart

    companies

    look beyond

    the immediate

    return on the

    transaction

    ©2009 TMI Consultancy Sdn Bhd | www.tmimalaysia.com.my.my | Page 4 of 4

    Here is your mission for the month. Review what happens when

    there is a service failure, or when your company has a complaining

    customer. Does your company turn adversity into opportunity by

    treating these service failures and complaints as gifts to show how

    you really look after your customers? Do you have a culture of going

    the extra mile to create a happy customer – even when things go

    wrong? Joe Wade does. The Ritz-Carlton does. And they are both

    laughing all of the way to the bank. Interesting thoughts. Until next

    month.

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