How Service Companies Can Earn Customer Trust and Retain It

If a service company is perceived as unreliable or unfair, it is sure to lose trust of its customers. Companies, that serve customers who are in a state of stress, are especially vulnerable to losing customers’ trust when they perform poorly. Below we have mentioned three conditions  that can cause customers to lose confidence in a service company.

  1. The failure is egregious. With smartphone photo or video just a couple of clicks away; any service failure that looks bad on camera may be transmitted, worldwide, in a matter of minutes. As Northwestern University’s Philip Kotler reminds us, “If companies behave badly, the internet will call them out.” Loss of trust in such circumstances is swift and unforgiving.
  2. The incident fits a pattern of failure. A pattern of failure creates doubt about the brand, which will be difficult to erase with even the most clever advertisements. If there’s a narrative, customer confidence in the company will probably be in free fall, and motivation to criticize it online greater.
  3. The attempted recovery is weak, yielding a double failure.When a service company fails to deliver the promised service, it must get the apology right — and certainly should not blame the customer for its failings. When customers see that a company isn’t own up to its mistakes, they are likely to assume that the firm cares little about serving them well and does not deserve their loyalty.

Some Lessons

Six rules to heed by for earning, retaining customer confidence – and be seen as reliable & fair:

  1. To the extent possible, solve service problems before they reach customers.This could be done by: using checklists as reminder of steps involved in the process, anticipating problem areas and steps required for preventing them in the first place. This way there is a higher chance that customers will experience a smooth service.
  2. Honor customers’ “perceived contract,” not just the company’s legal contract.To the customer, a purchased service is a promise of performance. Any company that makes customers sign legally binding “terms and conditions” should hesitate before enforcing provisions that contradict common sense, even though they may meet the letter of finer points of this signed agreement. Contracts designed to protect a company, when it delivers bad service, destroy the trust on which customer relationships are built.
  3. Identify and commit to a few crucial “non-delegable” decisions that must be kicked up to a senior manager.One such decision should concern circumstances under which customer is forcibly expelled from the premises. Such calls should always be made by someone in higher position of responsibility, so that he/she can carefully consider the company’s broader reputation before taking such a severe action.
  4. Be generous with customers when you absolutely must break your service promise to them.Any compensation for a company’s mistake should be unequivocally fair: Generosity is a trust builder; stinginess is a trust breaker. Danny Meyer wrote in his book Setting the Table, “Generosity of spirit and a gracious approach to problem solving are, with few exceptions, the most effective way I know to earn lasting goodwill for your business.”
  5. Include an explanation with the apology for a service failure. Explain why the mistake was made in the first place. An honest explanation carries the weight of a forthright confession, making the subsequent “We’re truly sorry” more authentic.
  6. Use realistic slogans.Good marketing is not just about making promises; it’s also about keeping them. Slogans that raise customers’ expectations too high sets up a company for failure.

The team at Actuate Business Consulting, a knowledge based management consulting firm in India, believes that a service company’s most valuable asset is the customer’s trust in them that it can and will perform the promised service. Breaking a service promise means breaking the customer’s trust. Common sense and respectful service must prevail over contractual fine print and computer algorithms.

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