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Proactive Service Recovery: The Revenue Strategy You Can't Ignore

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December 12, 2019

All You Had to Do Was Ask!: The Power of Proactive Customer Communication

Cheryl Pamplin

Just-Ask-Blog

Have you ever had a friend suddenly become distant, leaving you wondering why they’ve stopped responding to your calls, or how they are suddenly unavailable all the time?

It’s an uncomfortable experience, but perhaps the most frustrating part is when you eventually take the plunge and ask, “What’s up?” and discover that the issue was something that could have been easily fixed or avoided altogether.

For brands, this communication gap is something they encounter every day. Even the hospitality industry — widely considered to be a shining example of exemplary customer service and engagement — is only now beginning to gain better insight. In fact, our 2019 Guest Service Report found that 75% of hotel guests don’t report problems that impact their stays, leaving organizations with an incomplete picture of the experiences their customers are having.

So if hotels and their service teams are grappling with this type of issue, it’s safe to assume customer communication gaps are prevalent across most industries. Here’s a look at how any organization can start filling in these communication potholes and begin building frictionless paths that lead to stronger customer loyalty and increased revenue.

Filling in the Blind Spots

When brands establish two-way conversations with their customers, it opens doors that allow them to identify what their business is doing well, what they could be doing better, and how they can turn everyday customers into long term brand advocates.

With competition lurking around every corner, waiting to spring into action and steal your customers, it’s critical to establish regular lines of communication that allow you to gain better insights into customers’ ever-evolving needs and wants.

However, as our study found, developing these lines is easier said than done. In hospitality, just 1-in-4 guests will report any issue that impacts their experience. Issues are slipping through the cracks because people don’t feel like there is an easy and convenient way to communicate.

We know that when it comes to communication preferences today, mobile and text reign supreme. And this isn’t just a digital native thing. According to Gallup, texting has become the most common form of communication for Americans under 50 years old. With a 98% open rate vs emails at 20%, and a much higher response rate than phone calls, it’s not surprising that brands across most industries have also been adopting a text message mindset.

Nearly half (45%) of our respondents said they’d prefer to report issues through text messaging over in-person or phone, and that skews even higher for Gen Z and millennials. With these cohorts also being the most likely to allow issues to go unreported (with 17% and 18% respectively saying they’d report any issue), not having a strategy in place that removes friction from the communication and reporting process doesn’t only widen blindspots, but it also alienates today’s highly influential younger generations.

Brands who wait for consumers to make the first move risk seeing their relationships weaken, their service collapse, and sales diminish. Many organizations across the hospitality industry know this and are starting to see the benefits of proactive communication, opting to text guests mid-stay to ask how their visit is going, rather than waiting until check-out, or after, to ask how it went.

Turning Issues into Opportunities

Often times when we think about our service strategies, we think about all the things we can do to prevent issues from taking place. We look for – and attempt to fix – any weak spots and deploy loads of resources to ensure that a customer’s experience is nothing but delightful from end-to-end. However, the truth is that no matter how well thought out and executed our strategy is, mistakes can, and will, happen.

However, when mistakes happen, brands who take the opportunity to respond well, and immediately, are seeing a positive ROI.

42% of the individuals we surveyed said that they would return to a hotel that turned a negative experience into a positive one. And that’s where effective communication comes into play again. With the proper communication methods in place, any brand can turn service recovery into a powerful brand enhancer.

The service recovery paradox tells us that customer loyalty increases when there has been a service failure and successful recovery. And our survey reinforces this, with 35% of our respondents saying they feel more emotionally connected to a brand when it solves an issue for them.

Whether you’re a retail brand texting a customer to find out why they canceled or returned an order, or a restaurant following up with a guest to see how their dining experience was, service rooted in proactive communication will allow you to recover from missteps before things are out of your control.

The Bottom Line

While the fact that customers say they won’t abandon your business when it makes a mistake, and will actually feel more connected to you if you can solve those mistakes is great to hear, exceptional service doesn’t just impact how customers feel about you. It actually attracts business.

In fact, 1-in-4 (25%) respondents to our survey reported that they will spend up to $50 extra to stay with a hotel that provides better service than nearby competitors. This is inline with a PWC survey that found that customers are willing to pay up to 16% more for a better customer experience, which of course is always underpinned by great service.

It’s something that’s especially noticeable in the fitness industry. With no shortage of fitness offerings for individuals to use today, it’s not enough to have state-of-the-art equipment, or the latest workout trend to market to your audience. It’s the high-standard of personalized service that separates the winners from the rest . These brands understand that communication is key and will regularly keep in touch with members, often through text, helping them reach their individual goals through real time advice, reminders and motivation. And because of this service-oriented communication, they can charge what they do and reap the rewards of something else that impacts their bottom line: online reviews.

When 51% of consumers say that online reviews “greatly” impact their purchase decisions, and Harvard studies finding every one star increase in a Yelp rating equates to a 5% to 9% increase in revenue, brands in the fitness industry and beyond have a lot riding on reviews. And with only 1-in-5 of our survey respondents saying that an experience that meets their expectations is review-worthy, the need to go above and beyond is more important than ever.

Meeting your customers needs is hard. But it’s much harder when you don’t know where you went wrong in the first place. However, with good communication and a proactive service recovery strategy, you can delight them every step of the way. And for brands across the board, delighting your customers can start with something as little as reaching out to them and asking, “How’s it going?”

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