Recovery loops: 3 steps to better customer retention

Richard Davey, head of customer success at Upland Rant & Rave, explains how to set up a successful recovery loop.

recovery loop

No matter how outstanding a brand’s customer experience is, complaints are a fact of life. With this in mind, there’s a strong case to argue that introducing a recovery loop to save those all-important customers from leaving – or being poached by a competitor – is not only best practice, but essential.

According to Harvard Business Review, it is anywhere from five to 25 times more expensive to acquire a new customer than it is to keep a current one. As such, businesses need to have something in place that helps protect against customer churn, so for many brands, the first hurdle is acting on the insight they capture. Having a recovery loop in place that prevents customer issues from escalating into complaints is a worthwhile investment, but often, the idea of putting resource into customer recovery is overlooked.

The time and money needed to run and manage a successful customer recovery loop is often the biggest concern for businesses, but it needn’t be that way. After all, there’s no ‘one-size-fits-all’ approach when it comes to recovery processes. Finding a process that truly works for your business does require some trial and error, but this isn’t necessarily a bad thing. Ultimately, this allows you to find a strategy that can scale to size and tackles both industry- and company-specific problems.

Here are three steps any business can take to improve customer retention via a recovery loop:

1) Capture customer feedback

The first step for any business is to ensure that they have a Voice of the Customer solution in place. This ensures any customer feedback being collected can be easily accessed and analysed, so the insight can be put to good use. It’s vital to understand what your existing and prospective customers think about the service your brand offers, and how that is split between satisfied and dissatisfied customers. If you’re seeing trends in the data with the same old complaints being spoken about regularly, or have a high percentage of dissatisfied clientele, then you’re a prime candidate for a recovery loop.

2) Find your recovery criteria and build a support plan

Once the data has been analysed, the next step is to identify what makes someone a recoverable customer in your industry, as well as the level of resource needed to address those problems. This isn’t an easy task, but it’s important to ascertain these elements in tandem to understand what’s realistic for your business.

When a company is getting started with recovery loop implementation, they should look at whether there are certain negative words or phrases trending in their feedback. Can these complaints be easily resolved with a simple call from a member of staff, for example? If so, establish the key criteria that falls within the team’s existing knowledge, such as “missed delivery”, “no updates given”, “[competitor name]” etc, and set up a process for alerting subject matter experts – or senior staff for those trickier issues.

If you have a larger team at your disposal, with greater knowledge of your processes, the recovery

criteria can be broadened out to include phrases such as “all customers with a score of 3 or below”. With that in place, staff have a clearer idea of priority customers to focus on, so that they’re not overwhelmed by the process. Customer insight can also be invaluable in proving the business case for additional resource if there are, indeed, too many complaints for the team to handle.

3) Time is of the essence

If a customer is unhappy, speed of assistance is vital in the recovery process – the quicker you can act, the more customers you can save. Responding within 24 hours is a good benchmark to set as a minimum, but ideally it would be within a few hours. That said, speed should never come at the expense of quality customer service. As long as expectations have been set first with the customer, and staff take an empathetic approach, customers will be happy to wait for quality care rather than a rushed job.

Every company, no matter how good, will have to deal with customer complaints at some point. This doesn’t have to lead to customer losses, provided a strong customer recovery loop is put in place. In fact, dealing with complaints well can even turn a complaining customer into an advocate. To prevent unnecessary customer loss, businesses need to assess the common complaints, build a support unit around the easily rectifiable problems, and give themselves the capacity to compassionately deal with longer-lead problems.

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