• Ivaylo Yorgov

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!

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