The Rising Cost of Recovery

A few months ago, I wrote a post about a service recovery related to my stay at the Sir Francis Drake Hotel in San Francisco. (Read the post here.) Well, the epilogue to that story is quite interesting and also a great reminder that service recovery becomes increasingly expensive the longer you let the problem continue.

To bring you up to speed, the short version of the story is I experienced some minor problems while staying at the hotel in May. A few days later, I filled out an online survey noting the good and bad aspects of my visit. Not long after I submitted the survey, the hotel's Front Office Manager called me to follow-up and promised to send me a certificate for a free night's stay as an apology for the poor service. Unfortunately, the certificate never arrived.

The Story Continues
A week or so ago I received a phone call from the Front Office Manager. "Mr. Toister," he said, "I understand you never received that certificate we promised you."

"Yes, that's true," I said.

"Well, I don't know what happened, maybe my assistant forgot to send it. I'll have my assistant send one out to you first thing next week."

I got off the phone and thought about the conversation. It was great to get the follow-up phone call, but the manager was deflecting ownership. The certificate would have been nice to receive in May, but now it was not enough to entice me to return. So, I called the manager back and laid it out for him. I told him I was planning to visit the area again later this year and stay for three nights. I was also meeting a friend, so I'd need two hotel rooms for three nights apiece. One free night wouldn't get me to stay there, so was there anything else he was willing to do?

The manager offered to comp one of the rooms for the three nights and give me a good rate on the other room. Yes, that was enough for me to make a reservation and give the Sir Francis Drake another try.

Cost Escalation
If you look carefully at this situation, you can see how recovery got increasingly expensive.

  1. An apology. I was impressed the manager called me to follow-up on the survey and apologize for the poor service. That was enough to make me consider his hotel the next time I traveled to San Francisco.
  2. A free room night. The offer of one free night was very generous and I was even more impressed. Had the certificate arrived in a timely fashion, it is likely I would have made a reservation at the hotel for my upcoming trip.
  3. Three free room nights. Of course, the promised certificate never arrived, so the manager had to up the offer to three free room nights to get me to stay there.

The purpose of service recovery is to retain the business and maintain the organization's reputation. In this case, the cost of service recovery escalated from a simple phone call and an apology to three free nights. The lesson here is the faster you can recover, the less it is likely to cost you.

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