Service Recovery - Too Little, Too Much, or Just Right?

Service Recovery – Too Little, Too Much, or Just Right?

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One of the biggest challenges facing any organization is how to recover a situation when things go wrong.? This is especially true in Hospitality as our industry is primarily experience-based.?

As I discussed in my last article, hospitality is uniquely impacted by 4 main factors: Inseparability, Intangibility, Perishability, and Variability.?

Personally, I like to add one more factor into this: Individuality?

Each person that walks through the doors of your establishment is a unique individual with different attitudes, interests, opinions, triggers, and emotions.? The same inconvenience will naturally impact everyone differently.? For example – let’s say you are on a ride with another random group of people when your ride breaks down; ultimately leading to a ride vehicle evacuation.? For you – the locally-living, annual-pass-holding, theme park aficionado with a penchant for everything ride design and ‘hidden features’ – being evacuated could be a once-in-a-lifetime opportunity to walk amongst the animatronics, show scenes, and mechanics that absolutely thrills you.? For the other group – who saved for 3 years to travel internationally for this experience, faced 2 other ride downtimes today, were turned away from the ride they traveled here for due to missing the height requirement, and also encountered confusion with the tickets they purchased online which caused a long transaction time – this is the straw that broke the camel’s back.? Not only is their vacation not going the way they wanted; but now they need to make a choice: do they continue on with the dismal day and hope it improves, or make a trek to the nearest Guest Services location to see if they can make it better?

Ideally, your Guest Services department is only seeing a small percentage of the daily Guest flow; but unfortunately, roughly 90% of those at Guest Services experience some sort of inconvenience that impacted their day enough to make the visit.? Working to create a ‘wow’ factor for a damaged Guest experience should be at the forefront of every recovery interaction. While we should make sure we exceed their expectations, we must ensure our compensation is appropriate to not waste company resources and potentially set a wide-spreading precedent.?

Now the moment of truth – they are at Guest Services and want you to fix their concern: ?what can you do for them, and what?should?you do for them?

During my time overseeing Guest Services, I always told my team "Don’t protect the nickel and lose the dollar" when it comes to recovery, as certain compensation loss leaders can generate loyal Guests and increased revenue.? Guest compensation strategies can be difficult because as mentioned no two people or experience impacts are going to be the same, yet it is crucial to develop a solid strategy to set your team up for success each and every time.

You establish your compensation strategy before your first Guest walks through the door – with proper training.? It is impossible to train your team for every single circumstance or string of circumstances that may come their way – but it is very possible to train the impact that your organization wants to have on the Guest. Usually this can be found in your company’s mission and vision statement; but it is important to develop your department standards as well.? What part does your team play in the company’s success? How does your team define success?? Answering these questions can help with forming the foundation for your strategy.

I always told our team that we were the ‘Vanilla Ice’ of the resort – because ‘if they had a problem, yo we’ll solve it’.? Comically, this aged me in front of my team but it also set the stage that we were the recovery team to help resolve concerns regardless of what the issue may be.? Important to any compensation strategy – we highlighted that while we have the power to issue whatever compensation we wanted, we need to evaluate the full weight of the situation to best determine the appropriate recovery that would be best for the Guest, the company, and the team.

The first concern to consider is: who is at fault for the concern – the company, the Guest, or external factors such as weather? Establishing this is paramount to understanding what level of compensation is an appropriate starting point.? Having the Guest fully lay out the concerns that they experienced with as much detail as possible allows your team the information they need to corroborate the Guest’s story.

Is this the Guests’ first time to the venue? If not, is there documented history of this concern occurring with the Guest before?? Is this a trend or potentially a rare-but-encounterable ‘scam’ situation? What is the length of stay for the Guest at your venue? What enhancement products do they have that may alter the compensation you provide?

?With recovery, there are two categories: soft cost and hard cost recovery.? Soft cost, or internal cost recovery, allows you to utilize internal enhancements and products that can have a positive impact to turn the situation around for your visitors while reducing or eliminating compensation costs.? For example – a private character meet and greet or special parade viewing area costs nothing and creates intimate moments not normally experienced on a daily visit.? Internal enhancements such as expedited queue passes, food/drink vouchers, and even higher-level compensation such as offering tickets to return to your business on a future day can help in multiple ways.

First, it can potentially offset the negative experience, get the day back on track, and create a loyal Guest who may come back again and again.? Second, it can lead to future revenue through increasing average length of stay and per cap spending.? Third, and possibly most impactful, is this recovery may become the ‘billboard’ that the Guests bring home with them to attract new visitors; championing how you were the hero of the vacation. ?

Hard cost recovery typically results in a refund for the product purchased.? While we have the ability to provide this, it should be the last resort.? As hospitality venues, our product is the service and impact the experience makes on them, and while we have the ability to simply refund the Guest and have them on their way; we should work to recover the concern at hand so we can deliver on why the Guest visited us in the first place and on what our mission and vision are.

Offering a Guest a dining gift card when they have already purchased a meal plan, or offering to backdoor a Guest onto a ride when they already purchased an expedited queue pass for their day misses the mark and can escalate the issue if the Guest doesn’t feel they are being noticed, heard, or recognized.? Proper research into the Guests’ current products, options, and offerings can help determine an appropriate starting point for recovery.? Once we build the fundamental understanding to our teams that no two concerns are the same, and that no two ‘first level’ recovery attempts will start at an equal level, they are able to utilize their empowerment and unique recovery tools to think outside of the box.

Compensation tactics can be broken into a couple of different impact metrics.? The impact could have been monetary, where the Guest purchased something and didn’t find the value in it.? It may be time-driven, where the impact was to the time they have during the day.? They could have had a major impact to the experience, where the Guest’s expectations don’t align with their current reality, or a combination of the three.

Certain instances will be easy to dictate whether compensation is too much or too little – for example – if a Guest drops their ice cream cone, giving them a complimentary annual pass is far too excessive.? Similarly, if a Guest experiences multiple ride evacuations in their day offering them an ice cream cone would be insulting and would highlight we didn’t really care about their negative experiences or take the time to really evaluate their concern.? Other times, the situational impact can be great – and you will need to use all of your resources to determine the best recovery for the situation.

Going back to ‘Don’t save the nickel and lose the dollar’ reminds me of an example from my in-park days:? Two Guests who had the highest annual pass for 4 years in a row, were staying in an on-site hotel, had purchased our expedited queue product for the day but only used it on 2 attractions due to low wait times in the park.? I was called into the situation as they wanted to speak with a manager to request a refund, and after talking with my coordinator I found that he had researched the Guests’ passes and usage; but was getting hung up on the fact that the passes were used twice and it couldn’t be refunded due to the use.? While true – the pass had been used; looking at the usage history it was used at one E-ticket attraction and one family ride.? Factoring their usage would be no different than assisting a Guest with two one-time use queue passes, and taking into account these Guests were loyal brand ambassadors for our company, I gladly granted them the refund – even though the tickets said ‘non-refundable’ on them.?

Looking at the total picture, and not just what is in front of you, is crucial when establishing your recovery and compensation strategy.? While every company’s strategy will differ, teaching your team to look at the entirety of the situation will allow them to really focus on the vision that your company has, and will better allow them to align their service strategies with the company’s mission.? There will be unique situations that no one can anticipate which will require unique, pragmatic, and ingenious recovery options that may need to be formulated in real-time; but once you consider the above, and determine what your teams’ role is in accomplishing your company’s mission and vision, you should be able to build the framework that will be your compensation strategy – one that will keep people coming back again and again.

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