"Service Recovery" is the fancy term for making things right when they go wrong. It's a powerful tool for improving brand loyalty when done right, but done wrong it can backfire.
Last week I had to travel to Las Vegas for a conference. I stayed at the conference hotel, the New York New York--not the swankest place in Vegas by any stretch, but certainbly a respectable hotel for a business traveler.
There was only one problem: by the time I arrived at midnight, the hotel was out of nonsmoking rooms in the room type I had reserved. I'm not a very demanding business traveler: I really only insist on two things. Basic cleanliness and a nonsmoking room. In the year 2012 in the United States, these are things every traveler should expect at any hotel.
Normally this is not a problem. I've had this happen to me dozens of times over the years, and the hotel just upgrades me to a nonsmoking room in some other room type. But apparently this is not the policy at the New York New York: they made me pay for an upgrade to a fancy suite as the only way to have me and all my belongings not smell like smoke in the morning. The check-in agent offered no other options (or even much sympathy), so I grudgingly paid for the upgrade.
To step back for a moment, by this point in my customer experience the hotel had earned a black mark in my book. I don't care so much about the dollars, but I do care that they don't consider a nonsmoking room important for guests who want one. Since it is important to me, that's reason enough not to go back (especially with tens of thousands of other hotel rooms within walking distance). But as a customer I'm still recoverable, if the hotel recognizes its mistake and makes amends.
So the next morning I related my story to one of the conference organizers and several other attendees--all of whom were just as surpised as I was. The conference organizer passed this along to the hotel management, and the next day I got a call from one of the guest relations people.
Now we are in the Service Recovery phase. The hotel has been informed that they have an unhappy customer and they are reaching out to me to try to make it right. Research as shown that taking care of a customer's problem properly will actually make a more loyal customer, but not taking care of a problem will lead to a disloyal customer likely to spread negative word-of-mouth. So it's important to do this right, and convert that upset customer into a brand advocate.
The representative from the hotel was very polite, listened to my problem, agreed that I should not have had to pay extra just to get a nonsmoking room. And then she offered to refund one night of the two-night upgrade fee.
If she agreed that this should not have happened, then why is the hotel only offering to fix half the mistake?
The issue in my mind was never the money so much as the fact that a nonsmoking room is, for me, a basic amenity like clean sheets. From the hotel's response, I can only conclude that my initial conclusion--that they don't think a nonsmoking room is all that important--was correct.
So rather than convince me to return, the hotel actually reinforced my initial negative impression. And like the good Detractor that I am, I am telling everyone--including you, my reader--the same thing: If you care about getting a nonsmoking room, don't stay at the New York New York. Because they don't care, and their actions speak very loudly.
And that is how you do service recovery the wrong way.