Service Recovery

Joseph passed me this article about Redgee’s handling of an interesting customer support issue.

[My service recovery experience and thoughts about products and services after the jump.]

Grad School Service Recovery

In graduate school, Dave and I would have lunch very often. As starving graduate students, we were always looking for good deals. In fact, just when we got to liking a place, it would go out of business.

One fallback was Burger King and oftentimes I’d get miserable service. One time in particular, Dave ended up finishing his order before I even got mine, even though I ordered before him. When I complained, they first accused me of lying, and then when I pointed out the burger sitting on their shelf for the last 30 minutes, they tried to give me that one. I demanded a refund and swore off BK until I got some reparations.

(If you don’t know my dining habits: When I was a kid, I used to say to people “You know that McDonald’s sign that says over 60 million served? Well if I wasn’t born it’d say 59!”)

I wrote them a letter and about a week later, Dave and I ended up dining at Burger King on their dime for the next week. Of course, we used those coupons at a different BK (two extra blocks away).

Umm yes, that particular BK franchisee went out of business. But at least the corporation didn’t lose a customer.

Travel as a service

In 2000, when I was writing the first internet travel search agent, I made up this thought experiment:

The biggest travel companies (airlines) are listed on the Dow Jones Transportation Index. Why is the Transportation Index separate from the Dow Jones Industrial?

I think the answer to that was that industrial companies make and sell products while transportation is about giving and selling a service.

At the time it seemed that travel web sites were modeled after Amazon.com. The idea of a company like Travelocity is simply to “Do Amazon but for airline tickets.”

That’s why I felt that online travel sites were fundamentally flawed. They had an attitude that they are a company to make and sell tickets, but what travel is, is a service. At one level this would create a lot of churn: nobody will be loyal to Travelocity. Also the user experience would be flawed because their site would be designed to bias the price of the ticket over any other aspect of travel.

Unfortunately, that was the time the CEO said to me privately, “Terry, I wish I could just fire everyone and have this just be you and me.” As Director of Engineering (there was no CTO), letting him do that meant not doing my job.

Products and Services

Think about your business.: are you a company that makes and sells a product or gives and sells a service? Is the better model for your actions that of Microsoft Office or Google Search? Does it make sense to turn Office into “software as a service”? Does it make sense to productize search into an “search appliance?”

While great “service recovery” is important to both types of companies, I believe there is a fundamental difference between products and services and between companies that specialize in one or the other.

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