Customer-Centric Crisis Management
On January 28, 1986, the world watched in horror as the Space Shuttle Challenger broke apart 73 seconds into its flight, leading to the deaths of all of its seven crew members. Part of the massive media coverage was the fact that Christa McAuliffe was one of the seven. She was the first female teacher in space. What followed was an exhaustive effort to determine the cause of the disaster. Top investigators, using the latest in technology and aeronautical engineering expertise, examined every square inch of the shuttle, ran countless experiments, and perused thousands of pages of aircraft blueprints.
The failure of one O-ring seal was determined to be the cause of the Space Shuttle Challenger disaster. A contributing factor was cold weather prior to the launch. This was demonstrated by Cal Tech physics professor Richard Feynman when he placed a small O-ring into ice-cold water and subsequently showed its loss of pliability before an investigative committee. The insight changed forever how space shuttles were constructed.
Crisis management for a space shuttle involves engineering and scientific logic. Crisis management for a service issue requires customer logic. When organizations only apply financial, operational or public relations logic to hiccups involving customers, it invariably yields responses that fix the problem but leave customers unsatisfied and distrustful. Effective organizational service recovery must start with a deep understanding of the customer that is a vital part of the foundation of a strategy. It is that strategy that informs all crisis management tactics and communication responses.
A simple but poignant example is Domino’s Pizza. When Dominos started as a company, if a customer ordered a pizza and it was delivered more than 30 minutes later, the pizza was free. The service guarantee was the brainchild of the marketing department without any customer intelligence regarding how to handle service recovery around late pizza delivery. Then, they changed their guarantee to $3.00 off if delivered late.
Many people believed Dominos must have been giving away too many free pizzas. Actually, just the opposite had occurred. They were not giving away enough free pizzas. When Dominos asked customers: “If your pizza arrives in more than 30 minutes what do you typically do?” The typical customer indicated that they go ahead and pay for the pizza. “But, you do know it is free if it is late?” Dominos said to customers. “Yes,” replied customers, “but we think giving away free pizza just for being five or ten minutes late is excessive.” Dominos wisely asked customers, “What do you recommend we do if the pizza is delivered late?” And, the typical customer responded, “A discount of some sort.” When Dominos changed their free pizza guarantee to three dollars off if delivered late, customers took them up on the discount. It was now closer to the customer’s recovery expectations.
Customer intelligence—research and feedback on what customers want, expect and experience—is only part of the recipe for an effective service recovery strategy. The larger component is the assurance that customer logic permeates the construction of the strategy and is not simply an after-the-fact overlay. Imagine the outcome of the space shuttle investigation if the finance department had been in charge of the effort and engineers/scientists were brought in only late in the postmortem? We might never have known about the O-ring issue.
Too often the public relations department drives the organization’s response to a major customer disappointment crisis. The damage control bias found in some PR firms or units can often trump a crucial focus on customer trust renewal. It is this fact that Toyota and American Airlines failed at service recovery while JetBlue and J&J succeeded. What will guide General Motors response to their current safety crisis?
Customer logic is never alone in shaping a service recovery (crisis management) strategy; it leads with operations, finance and marketing logic as it partners. The driving questions are these: If a major service hiccup tomorrow landed your organization in the middle of negative media storm, would you have a comprehensive plan to guide your efforts? And, what discipline would inform your organization’s response—PR or CEM?