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4 Tips for Fixing Mistakes

May 03, 2016

Even when you've blown it with your first customers, you can still rebound. Read this to find out how.

Your young company just made an epic mistake -- maybe your product is faulty, or a customer is just really (and rightfully) unhappy. You’re having night sweats and panic attacks. But take a deep breath and repeat four very important words: service recovery paradox theory. It’s a social science phenomenon, in which your occasional failures make customers trust you more. It helps them see you as human. But that doesn’t mean you’re off the hook. “The chances of customer retaliation will be reduced if the service provider has an efficient complaint-handling policy,” says Celso Augusto de Matos, a Brazilian marketing professor who has led research into the paradox theory.

Here’s what he means: You need an action plan—a way to show customers empathy, maintain an open line of communication and find the right compensation to regain their trust. (Cash never hurts.) Don’t have one yet? Consider these four crucial lessons from those who have been there and learned from their mistakes—because you, too, will screw up one day, like they did. It’s unavoidable. Be ready.

Do this:

Fess up immediately. Disclosing your mistake actually puts you in some command of the situation. Go on the offensive and reveal your error on your terms.

Ralph Clark is ceo of the Bay Area–company ShotSpotter, which uses electronic sensors to locate gunshots in cities and then alerts the authorities. “What we do is extremely challenging, and we’re not perfect,” Clark says. His sensors must identify gunshots -- and differentiate them from other bangs -- over noise as loud as highway traffic, and across wide and undulating landscapes. In its contract, ShotSpotter obligates itself to detect 80 percent of shots -- a high number (and it strives for higher), but still leaving a big window for failure when dealing with something as serious as potential homicides. And yet, the company’s annual customer attrition rate is less than 2.5 percent.

How? Clark says it’s because his company takes every failing very seriously—a “hair on fire” situation, he says. He invites clients to point out ShotSpotter’s mistakes, at which point the company will do exhaustive work on local sensors and review what went wrong. But more important, Clark says, the company searches on its own to locate its misses -- and then self-reports them to each client during a yearly review, along with what it learned about them. “Our clients appreciate that, because they don’t expect a vendor to [point out their errors],” says Clark.

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