Article from Harvard Business Review by Leonard L. Berry
APRIL 19, 2017
Being perceived as unreliable or unfair is a sure way for a service company to lose the trust of its customers. I’ve learned that truth from 40 years of conducting research in the fields of services marketing, service quality, and health services. Companies that serve customers who are in a state of stress are especially vulnerable to losing customers’ trust when they perform poorly.
A case in point is the recent United Airlines public relations fiasco that resulted when security personnel forcibly removed a ticketed customer from his plane seat to make room for one of its employees. The incident brings into stark relief three conditions under which any service company can cause customers to lose confidence in it (United met all three, but just one is enough) and highlights several lessons for all service companies on how to earn and maintain customers’ trust.
Condition 1: The failure is egregious. Most service failures are not as shocking as dragging a 69-year-old doctor down the aisle of an airplane. But with smartphone video just a couple of clicks away for a witness, 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 these circumstances is swift and unforgiving.
Condition 2: The incident fits a pattern of failure. If a company has failed its customers once, doing it twice effectively creates a narrative of poor service. And once there’s a narrative, customer confidence in the firm is probably in free fall, and motivation to criticize it online is greater. Services are performances; there are no tires for customers to kick prior to purchase to assess quality. A pattern of failure creates doubt about the brand that will be difficult to erase with even the most clever of advertising.
Condition 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 (as when United initially called its wronged customer “belligerent”). When customers see that a company won’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.
Gaining and Keeping Trust
Here are some lessons that any service company should heed if it wants customers to see it as reliable and fair.
To the extent possible, solve service problems before they reach the customer. More hospitals are using checklists to remind clinicians of essential patient-safety steps before doing medical procedures, a practice borrowed from the aviation industry. Each night, FedEx sends an empty plane from the West Coast to one or more airports where volume overloads or mechanical problems would otherwise delay FedEx deliveries to intended recipients. The customer is never aware of a problem, because steps were taken to prevent it in the first place.
Honor customers’ “perceived contract,” not the company’s legal contract. To the customer, a purchased service is a promise of performance. For example, airline passengers should not be expected to read an entire “contract of carriage” (United’s is 46 pages long) to understand precisely under what conditions the company can take away their ticketed seat. Similarly, any company that makes customers sign legally binding “terms and conditions” should hesitate before enforcing provisions that belie common sense, even though they may meet the letter of the minutiae of the signed agreement. Contracts designed to protect a company when it delivers bad service destroy the trust on which customer relationships are built.
Identify and commit to a few crucial “nondelegable” decisions that must be kicked up to a senior manager. One such decision should concern circumstances under which customers are forcibly expelled from the premises, whether an airplane cabin, a hotel lobby, or a sports venue. Such calls should always be made by someone in a high position of responsibility, so that they can carefully consider the company’s broader reputation before taking such severe action.
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. As restaurateur 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.”
Include an explanation with an apology for a service failure. Apologies may be perceived as empty if the company does not 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.
Use realistic slogans. Good marketing is not just about making promises; it’s also about keeping them. Slogans that raise customers’ expectations too high set up the company for failure. For example, the complexity of today’s airline operations, the emotional stressors in airline service for passengers and employees, and limited competition (four airlines control about 70% of the U.S. market), which discourages investments in improving service, make a slogan like “Fly the Friendly Skies” feel disingenuous. That’s why, after its recent failure, United was ridiculed with so many insulting mock slogans.
Common sense and respectful service must prevail over contractual fine print and computer algorithms. A service company’s most precious asset is the customer’s trust that it can and will perform the promised service. Breaking the service promise means breaking the customer’s trust.