6 Service Recovery Strategies to Win Back Unhappy Customers

Customer service recovery strategies are the key to turning your unhappy customers’ poor experiences into positive ones. Because, like it or not, dealing with unhappy customers is just part of doing business.

A supply chain shortage prevents you from delivering your customer’s order on time. Your system goes down, leaving customers unable to use your mobile app. There was a mix-up in the warehouse, and your customer received the wrong item. 

Service failures are inevitable. But they’re not irreparable. 

Not only is it possible to win back unhappy customers—it’s possible to increase their loyalty beyond what it was before your service failure. How? With the right customer service recovery strategies.

What is service recovery?

Service recovery refers to the steps your company takes to resolve an unhappy customer’s issue after they’ve made a complaint. It involves developing strategies and systems that empower customer service employees to offer meaningful, personalized solutions that retain customers.

Service recovery is as much of a mindset as it is a strategic process. As well as equipping employees with the right technologies to perform efficient service—such as CRMs and contact centre software—you also need to place customer satisfaction as a central business value.

What are the benefits of having efficient service recovery strategies?

Why go to the effort of creating service recovery strategies? From increased retention to improved business operations, here’s how a service recovery strategy can help your business remain sustainable.

Boosts customer loyalty and retention

Dealing with an angry, frustrated customer might feel like a lost cause. But more often than not, it’s how you respond to a complaint that determines whether or not a customer will leave your company.

A recent study by Khoros found that 83% of customers feel more loyal to brands that respond to and resolve their complaints. In fact, a customer who has experienced a service failure is actually more likely to become a loyal customer than a customer who has never experienced a service failure. 

This is known as the service recovery paradox. It happens because when you resolve an issue for a customer through exceptional service, their secondary satisfaction becomes greater than their satisfaction pre-failure. 

Customers know that you’re bound to make mistakes. But by owning up to your mistakes, saying “sorry”, and working hard to resolve the problem, you can form a closer bond with customers. This nurtures them into being loyal brand advocates, improving customer lifetime value.

Improves your brand’s reputation

Khoros also found that 67% of customers tell others about their negative experiences. Customers trust the opinions of friends, family, and online reviewers more than any other type of marketing. Therefore, you want conversations around your brand to be as positive as they can be to attract new buyers. 

Let’s say that an existing customer tells others about their bad experience. These potential new customers may form a negative opinion about your brand and avoid doing business with you. But, if you go above and beyond to resolve the issue for the existing customer, then they’re likely to share this positive experience with others in the same way. 

As a result, you can mitigate reputational damage and gain new customers through word-of-mouth marketing. 
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Drives business process improvements

Effective service recovery efforts can help you identify inefficient business processes that you might have otherwise missed.

For example, let’s say that a customer complains about how difficult it was to book a consultation appointment. Maybe they were stuck on hold for ages or couldn’t get time off work to call. Whatever the case, this one complaint can illuminate a larger issue that’s potentially losing you lots of customers—an inefficient appointment booking process.

Solving appointment-booking obstacles is easy with the right online scheduling solution. Customers can self-schedule appointments online across all of your platforms on a 24/7 basis. By implementing this system, you can resolve an inefficient process before you get bombarded with negative customer reviews.

6 Customer service recovery strategies

Now you know what service recovery is and how it can help your business, let’s get into the six customer service strategies you should employ.

1.   Sincerely apologize and take responsibility 

Every customer service recovery strategy should begin with a heartfelt apology.  

A genuine “I'm sorry” goes a long way in rebuilding trust with unhappy customers. It shows that you regret not meeting your customer’s expectations and aren’t above apologizing for your mistakes. Even if the situation wasn’t your fault, an apology validates your customers’ dissatisfaction and shows that you empathize with their feelings.  

Just take a look at the data below—a recent study by Huntswood found that saying “Sorry” to customers significantly increases happiness scores once the problem is resolved. It also increases retention rates by 17%. 

​​​​​​​But there’s more to saying “Sorry” than just, well, saying “Sorry”. 

A genuine apology involves listening to your customers, stepping into their shoes, and taking responsibility. Most importantly, you should tailor your apology to the customer’s unique situation. Copy-and-paste apologies can be spotted from a mile off. 

2.   Identify the root of the problem

Now, it’s time to gain complete context of the issue your customer is facing. 

Exceptional service recovery strategies don’t just throw money at the problem and hope it goes away. They delve deeper into the root of challenging situations, leveraging streaming ingestion to collect data from various sources.  

So, as well as asking follow-up questions, employees read through the customer’s past conversations and analyze customer interactions across channels to form a complete picture of the problem.  

This puts you in your customers’ shoes, allowing you to see things from their perspective. In turn, you can work on the next step of your strategy—offering a tailored solution. 

3.   Offer a solution

Your ultimate goal is to resolve your dissatisfied customers’ issues. But, rather than jump in with a go-to solution (i.e., financial compensation), take the time to figure out exactly what your customer wants. 

The best service recovery strategies ask customers, “What can we do to make this right?” and go on to work collaboratively to find customized resolutions. Of course, there will be limitations to what employees can offer. But by working together, you can reach a fair solution that your customer is happy with.

Once you’ve resolved the issue, go the extra mile. Exceed customer expectations by offering something of value, like a complimentary service or free upgrade. This gesture of goodwill shows your customers that you value their loyalty, helping to build positive, long-term relationships.

4.   Follow up with your customer

After resolving the issue, follow up with your customers to make sure that they’re still satisfied. Maintaining an open line of communication via a follow-up email, SMS, or phone call shows customers that you still care about their feedback and are committed to providing them with a satisfactory experience.  

A follow-up email for a resolved customer complaint might look something like this: 

“Thank you for contacting us about [recent issue]. Our records show that your issue was resolved on [date]. If you still need our help, click “reply”, and we’ll get back to you shortly. If not, we’ll close your ticket in three days from the date of this email.” 

To avoid your customers having to repeat themselves, ensure that your employees have access to the customer’s previous conversations should they get back into contact. 

5.   Empower employees to deliver timely responses

According to Khoros, 79% of customers expect fast replies to their questions and complaints. If you take too long to respond, you risk frustrating your customers even more and, potentially, losing them altogether. 

Without the right technology, you’re going to struggle to meet customer expectations. For example, leveraging solutions like cloud contact centre software—and integrating the solution with your CRM—helps you improve your average response time.  

Additionally, integrating lifecycle management tools into your CRM system ensures that customer interactions are appropriately tracked and managed throughout their journey with your company. 

Employees can quickly reply to customer complaints via telephone, email, and social media from one unified platform. They get centralized access to all the data they need to provide efficient, personalized omnichannel customer support. 

6.   Make it easy for customers to submit complaints

If you don’t know that your customers are upset in the first place, then you won’t be able to respond.

Most angry customers won’t make a formal complaint if they have a bad experience. Instead, they’ll silently abandon you for your competitor and leave you wondering what you did wrong. But when you make it easy for customers to submit complaints—and actively encourage them to do so—you can quickly resolve issues and boost customer retention.

Give customers the option to submit a complaint via their preferred method. This could be through your website, social media, email, live chat, telephone, or even in writing. Consider streamlining the process by setting up a subdomain for customer support or an IVR system that directs customers straight to your complaints line.

To wrap up

Every company makes mistakes now and again—but it’s how you respond to them that counts. 

In a world where consumers have more choices than ever before, going the extra mile to resolve their issues can stop them from running to your competition. Customer service recovery strategies place customer satisfaction as your primary goal, using a variety of methods to nurture dissatisfied customers back toward loyalty.