CUSTOMER SERVICE

How Service Companies Can

Earn Customer Trust and Keep It
by Leonard L. Berry
APRIL 19, 2017

Being perceived as unreliable or unfair is a sure way for a service company to lose the trust of its
customers. I’ve learned that truth from 40 years of conducting research in the fields of services
marketing, service quality, and health services. Companies that serve customers who are in a
state of stress are especially vulnerable to losing customers’ trust when they perform poorly.

A case in point is the recent United Airlines public relations fiasco that resulted when security
personnel forcibly removed a ticketed customer from his plane seat to make room for one of its
employees. The incident brings into stark relief three conditions under which any service
company can cause customers to lose confidence in it (United met all three, but just one is
enough) and highlights several lessons for all service companies on how to earn and maintain
customers’ trust.

Condition 1: The failure is egregious. Most service failures are not as shocking as dragging a 69-
year-old doctor down the aisle of an airplane. But with smartphone video just a couple of clicks
away for a witness, any service failure that looks bad on camera may be transmitted worldwide in
a matter of minutes. As Northwestern University’s Philip Kotler reminds us, “If companies
behave badly, the internet will call them out.” Loss of trust in these circumstances is swift and
unforgiving.

Condition 2: The incident fits a pattern of failure. If a company has failed its customers once,
doing it twice effectively creates a narrative of poor service. And once there’s a narrative,
customer confidence in the firm is probably in free fall, and motivation to criticize it online
is greater. Services are performances; there are no tires for customers to kick prior to purchase to
assess quality. A pattern of failure creates doubt about the brand that will be difficult to erase
with even the most clever of advertising.

Condition 3: The attempted recovery is weak, yielding a double failure. When a service company
fails to deliver the promised service, it must get the apology right — and certainly should not
blame the customer for its failings (as when United initially called its wronged customer
“belligerent”). When customers see that a company won’t own up to its mistakes, they are likely
to assume that the firm cares little about serving them well and does not deserve their loyalty.

Gaining and Keeping Trust

Here are some lessons that any service company should heed if it wants customers to see it as
reliable and fair.

To the extent possible, solve service problems before they reach the customer. More hospitals
are using checklists to remind clinicians of essential patient-safety steps before doing medical
procedures, a practice borrowed from the aviation industry. Each night, FedEx sends an empty
plane from the West Coast to one or more airports where volume overloads or mechanical
problems would otherwise delay FedEx deliveries to intended recipients. The customer is never
aware of a problem, because steps were taken to prevent it in the first place.
Honor customers’ “perceived contract,” not the company’s legal contract. To the customer, a
purchased service is a promise of performance. For example, airline passengers should not be
expected to read an entire “contract of carriage” (United’s is 46 pages long) to understand
precisely under what conditions the company can take away their ticketed seat. Similarly, any
company that makes customers sign legally binding “terms and conditions” should hesitate
before enforcing provisions that belie common sense, even though they may meet the letter of
the minutiae of the signed agreement. Contracts designed to protect a company when it delivers
bad service destroy the trust on which customer relationships are built.

Identify and commit to a few crucial “nondelegable” decisions that must be kicked up to a
senior manager. One such decision should concern circumstances under which customers are
forcibly expelled from the premises, whether an airplane cabin, a hotel lobby, or a sports venue.
Such calls should always be made by someone in a high position of responsibility, so that
they can carefully consider the company’s broader reputation before taking such severe action.

Be generous with customers when you absolutely must break your service promise to them. Any
compensation for a company’s mistake should be unequivocally fair. Generosity is a trust builder;
stinginess is a trust breaker. As restaurateur Danny Meyer wrote in his book Setting the Table,
“Generosity of spirit and a gracious approach to problem solving are, with few exceptions, the
most effective way I know to earn lasting goodwill for your business.”

Include an explanation with an apology for a service failure. Apologies may be perceived as

empty if the company does not explain why the mistake was made in the first place. An honest
explanation carries the weight of a forthright confession, making the subsequent “We’re truly
sorry” more authentic.

Use realistic slogans. Good marketing is not just about making promises; it’s also about keeping
them. Slogans that raise customers’ expectations too high set up the company for failure. For
example, the complexity of today’s airline operations, the emotional stressors in airline service
for passengers and employees, and limited competition (four airlines control about 70% of the
U.S. market), which discourages investments in improving service, make a slogan like “Fly the
Friendly Skies” feel disingenuous. That’s why, after its recent failure, United was ridiculed with
so many insulting mock slogans.
Common sense and respectful service must prevail over contractual fine print and computer
algorithms. A service company’s most precious asset is the customer’s trust that it can and will
perform the promised service. Breaking the service promise means breaking the customer’s trust.

Leonard L. Berry is University Distinguished Professor of Marketing, Regents Professor,

and the M.B. Zale Chair in Retailing and Marketing Leadership at Texas A&M University’s Mays
Business School. His books include Management Lessons from Mayo Clinic, Discovering the Soul
of Service, and On Great Service.

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