Recovery Recovery Recovery

This post is in response to Chris’ comment regarding the power in turning dissatisfied customers into extremely satisfied ones. 

Our research shows that recovery is the most powerful driver to XCS (Repurchase propensity of 89%).  It is more powerful than the effort of creating XCS with a customer who hasn’t had a poor experience (Repurchase propensity 76%). 

The phenomenon is powered by the same engine as XCS, emotional events.  Since a dissatisfied customer is more emotionally charged than a person who has not had a problem, and since the recovery is often unexpected, the resulting positive emotional charge is greater. 

The problem is that extremely dissatisfied customers are usually relatively small in numbers.  So, if we’re searching for large gains in loyalty, then probably dissatisfied customer is not the place.  However, knowing this characteristic is HUGE.

This is not to say that we should look for ways of dissatisfying customers so we can then save them, but is good to know that in every dissatisfied customer is a loyal customer looking to break through.

See a white paper on recovery, here: servicefailureandrecovery.pdf

Why do we ignore what we know to be true?

Have you ever heard the saying – “the customer is always right”? Of course, we all have.

Did you know that it’s at least 5 times less expensive to keep an existing customer than it is to gain a new one?  I’m willing to guess most of have heard this or a similar statistic.  Inherently, we know these, and a million other similar statements to be true.  Then why is it that most companies place so little emphasis on maintaining the loyalty of current customers?

I believe the biggest reasons is: