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.

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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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