CX Science: fix other companies' failures to increase customer satisfaction
What:
The "Make-up-for-other-companies'-mistakes" effect: fixing another company's failure that occurred prior to an interaction with you increases satisfaction with your services, positive word of mouth, and repurchase intentions.
In fact, you might have no choice but do recovery work for other companies' mistakes - because of a spillover effect, satisfaction with your services will be lower lest you take care to mitigate the damage.
Now what:
Consider designating a pool of resources for fixing what other companies' failures.
Train frontline employees to listen carefully and investigate customers' circumstances. It might be a very simple thing such as asking 'How was your flight?' at hotel check in. A small gesture in case of bad prior experience can do miracles with customer satisfaction at this point.
I bet you've heard of the service-recovery paradox. This is the scientific name for the higher satisfaction that occurs after a company has successfully mitigated a service failure; in such cases the satisfaction can jump to a level higher than the one before the failure.
You are also likely to know about the spill-over effect. It posits an interaction will colour our evaluation of unrelated ones that come after it. For example, an unpleasant experience with a hotel restaurant will lower our satisfaction with the hotel, even though the two might be unrelated.
Now, what happens if we combine these two? It follows that a company will do well to fix a service failure by another company occurring prior to the interaction with it. That sounds counterintuitive.
Why would I fix someone else's mistakes? What do I stand to gain? Alexis Allen, Michael Brady, Stacey Robinson, and Clay Voorhees set off to check exactly this hypothesis. What they found is that a company can benefit a lot from making up for another company's failure. Read on.
Here are the numbers you need to know.
With no prior service failure, it doesn't really matter if a company offers a small gesture or not - customer satisfaction is only marginally higher in the first case. So far, so good.
Things get interesting if there was a service failure prior to the current interaction, say a customer not being able to use a prebooked extended leg space seat due to overbooking.
With a prior service-failure unrelated to you, if you do nothing, satisfaction with you will drop from about 6.00 (1-7 point scale) to below 5.75. Not a terrible result, so you can also ignore it of course.
But! If you do something to fix the failure that has nothing to do with you, satisfaction increases to 6.57! So now, in a prior-failure condition, you end up with a difference of close to a whole point on a 7 point scale.
The same patter of results by and large applies to word of mouth and repurchase intention as well - you stand to gain a significant boost if you mitigate a service-failure of a completely different company. Amazing, no?
I hope this inspires you to explore such obscure effects further for they offer a rather easy but powerful way to boost customer satisfaction, word of mouth, and repurchase intentions.
My best wishes for a great day ahead!