What Is Service Recovery? Your Complete Guide in 2025 Gladly Team 22 minute read #Best Practices As a leader in the customer experience space, you probably already know how important service recovery is, but it still bears repeating: Customer service recovery is your best defense against customer failure and churn. It’s an essential skill for customer service agents of all levels and industries, too. Why? Because even the smallest issues, like too many agent handoffs or long wait times, can create or worsen points of customer failure. In fact, 42% of customers say they would switch brands after just two poor customer service experiences. 42% of customers would switch brands after just two poor experiences A well-developed service recovery strategy can help your team reduce customer churn, foster brand loyalty, and ultimately improve revenue. Follow this guide to craft your contact center’s service recovery strategy. What This Guide Covers There are several key topics involved in service recovery that your customer service team can implement in 2025 to take customer experience to the next level. These feature the following business critical service recovery topics: What is service recovery? The service recovery paradox The importance of service recovery Leadership’s role in service recovery Agents’ role in service recovery AI’s role in the customer recovery process 5 service recovery steps that enhance customer relationships Common service recovery examples Customer service recovery presents a new opportunity to build trust among loyal customers while protecting your brand’s reputation and revenue. And at the end of the day, it’s really about turning those lemon experiences into a lemonade so buzz-worthy that customers keep coming back. Learn how to squeeze the greatness out of a less-than-great situation by diving into these service recovery steps with us and applying the right strategy to your team. BLOG Building Relationships With Customers — The Why and How Read now What Is Service Recovery? Service recovery is the act of contacting customers who had a poor experience with your company in order to identify and resolve their issue. By performing service recovery, you can rebuild your brand’s reputation and reclaim customers who otherwise would not return to your business. Service recovery is the process of resolving a customer’s poor experience Companies should treat service recovery as a fully fledged part of the overall customer experience—because it is. It’s a part of the ecosystem that customers come to know and expect about your brand. ‘Experience-fueled’ brands lead across industries according to a Forrester study, receiving: 1.6x higher customer satisfaction rates 1.6x greater brand awareness 1.7x higher customer retention 1.9x higher average order value 1.9x greater return on spend 1.5x higher employee satisfaction (yes, agents benefit, too!) Service recovery not only offers your business the opportunity to redeem itself, but it also allows you to level up your support processes to prevent similar issues and customer service complaints in the future. No matter how unexpected the issue is or how abruptly it happens, the goal is the same—resolve the negative experience and give the customer an engaging, new interaction to remember your business by. The Service Recovery Paradox The service recovery paradox is a fascinating phenomenon. It shows us that recovered customers are more loyal to brands after experiencing a service failure (and then receiving an excellent customer service response) than customers who have been consistently satisfied. Recovered customers are more loyal than consistently satisfied customers This paradox is a driving force behind many service recovery efforts because it’s based on the idea that when a company successfully resolves a customer’s issue, it can create a stronger bond between the customer and the company. There are several reasons why the service recovery paradox occurs: They see you taking action. When customers experience a problem, they are often more likely to remember the actions a company used to handle the situation rather than the actual problem itself. If the company resolves the issue quickly and efficiently, the customer is likely to take stock of the time and effort put into helping them. They’ll also be more likely to do business with the company again. That action shows empathy. Service recovery can illustrate to a customer that your contact center is empathetic to their concerns—that you see them not as simply complaining, but as a person inconvenienced and reaching out. On top of that, a customer service interaction might be one of the few instances where your customers get to have a one-on-one conversation with someone from your brand. Not only does that make your support agents brand ambassadors, but it also means their empathy and humanity can directly impact outcomes and even lead to additional sales and retention for your company. That empathy builds trust. When your team helps customers in such a personal way, customers are more likely to trust your company and recommend it to others. So make service recovery easier on your agents by implementing a dedicated service recovery strategy. This can make the process of hearing your customers out, genuinely sharing their concerns, and going the extra mile a repeatable, scalable process instead of a bespoke experience that can never be replicated. It might be tempting to look at instances of customer failure as done deals. But there’s still so much your customer service team can do. In fact, customer failure addressed quickly and empathetically can drive more opportunities for customer loyalty than if an issue had never occurred in the first place. The Importance of Service Recovery By recovering customers, your business prevents customer churn—the loss of customers over a period of time (which also means major revenue loss). Churn is caused by a number of factors, such as poor customer service, high prices, or a lack of product innovation. Customer churn leads to approximately $168 billion in lost revenue for U.S. companies every year. And it would be naive to think that none of that churn could be prevented or corrected with a service recovery strategy in place. U.S. companies lose $168 billion every year from customer churn Without the right plan in place, however, your brand could very well face the consequences of scorned shoppers leaving your business and bad-mouthing your lack of support on the way out. Frustrated customers have the potential to damage your brand’s reputation, leading to increased customer churn and even more revenue loss. Needless to say, customer service recovery is essential for reducing customer churn, improving revenue, and fostering brand loyalty. Here are ways it can impact those three areas: Reducing customer churn Customer service recovery can help to reduce churn by resolving customer issues quickly and efficiently. When customers feel that their issues are being taken seriously and their time isn’t being wasted, they are more likely to remain loyal to your company. Improving revenue Customer service recovery can also help to improve revenue. When customers have a positive experience with customer service—even after having a negative one—they are more likely to make repeat purchases. They are also more likely to recommend a company to their friends and family. This can lead to increased sales and revenue for the company. Fostering brand loyalty Customer service recovery can help to foster brand loyalty. When customers feel that a company cares about them and is willing to go the extra mile to resolve their issues, they are more likely to develop a connection to the brand that surpasses the purely transactional and dives into the emotional. This can lead to increased brand loyalty and customer retention. Now that you know how customer service recovery can affect your company, let’s flip the script to see how your agents can make their own impact on your service recovery strategy. GUIDE 5 CX benchmarks to live (and grow) by Download now Leadership’s Role in Service Recovery Support managers play a crucial role in guiding and empowering agents to deliver exceptional customer service recovery. By giving agents the tools they need to meet the moment, leaders in customer experience are responsible for helping turn customer failure around and building long-term brand loyalty. Questions to ask yourself as a manager: Am I providing agents with the necessary training, resources, and tools to effectively handle challenging situations? What things do they already have/know? What things are they missing? Does my team have a culture of accountability and continuous improvement? If not, how can I develop one within my team? Do I encourage agents to take ownership of customer issues and strive for resolution? Can I incentivize or reward agents who consistently take ownership? Am I empowering agents to proactively resolve negative customer experiences? Do agents on my team know enough about the current state of the brand to act as true brand ambassadors? Am I collecting the right data to measure and how satisfied customers are after connecting with agents? How are we following up with customers who have reached out to our service team? Agents’ Role in Service Recovery Customer support agents play a twofold role when it comes to service recovery: crisis management and loyalty conversion. Agents with the resources and proactiveness to take initiative towards customer service recovery can do wonders for your business, brand, and bottom line. Help them make the most of their unique position with service recovery steps they can use as part of your customer recovery strategy. Questions to ask your support agents: Are you an active listener? Do you empathize with customers during conversations? What are some ways you can listen or empathize more effectively? Do you offer personalized solutions? Do you provide regular updates on the progress of customer requests? What is your typical time frame for following up with customers to ensure their satisfaction? Do you feel like you have the authority to make decisions and take action to resolve customer issues? If not, how can I help facilitate those for you? What kind of impact do you make for your customers who have had a negative experience? What are ways you think agents here can go the extra mile? Customer support agents who are empowered to make a difference in real customers’ lives are more likely to be satisfied with their jobs. This is because they feel like they are making a positive impact on the world and that their work is meaningful, giving them a sense of accomplishment and satisfaction. Additionally, empowered agents are valued agents. Show them your appreciation with resources that let them own their place in your company’s service recovery strategy, and not only will your customers experience more satisfaction and loyalty, but your agents will experience increased job satisfaction and company loyalty, too. AI’s Role in Customer Service Recovery AI as part of your customer service plan is more important than ever these days. It’s already enhancing customer service recovery and will continue to do so into the future. AI-powered tools can help businesses automate tasks, analyze data, and personalize interactions, all of which can lead to improved customer satisfaction and loyalty. Here are some reasons it’s worth implementing AI into your service recovery steps: Automate tasks. AI-powered chatbots can be used to handle routine customer inquiries, freeing up human agents to focus on more complex issues. AI can also be used to analyze customer data to identify trends and patterns. This information can then be used to develop targeted customer service strategies. Personalize interactions. Recommendation engines can be used to suggest products or services that are relevant to a customer’s individual needs. AI can also be used to create personalized customer experiences, such as by remembering a customer’s previous interactions with the company. Surface information. AI can assist your human agents during their interactions with customers, aiding in the speed and accuracy of a resolution. Analytics tools powered by AI can help agents track and assess how well they satisfy customers over time. WEBINAR From Theory to Practice — AI Adoption Across Real Business Scenarios Watch now 5 Service Recovery Steps to Enhance Customer Relationships Every business deals with customer churn at some point or another. What sets successful businesses apart from the rest is their ability to recover those shoppers. If you’re not sure where to start, use the next five steps to enhance your internal process and approach each issue with care. Companies can take several steps to increase the chances of a successful service recovery. They should have a clear and concise service recovery policy in place. This policy should outline the steps that employees should take when a customer experiences a problem. Companies should also train their employees on how to handle customer complaints effectively. Employees should be able to listen to customers, empathize with their frustration, and offer solutions to resolve the issue. 1. Center your customer and their issue Before you can fix a customer’s issue, a customer has to be able to reach you. Companies should make it easy for customers to contact them when there’s a problem. This can be done by providing multiple contact options, such as phone, email, and chat. Then, you can properly hear the customer out and understand their situation. Ask questions like these: Which agent helped you? What product/service do you need help with? When did this occur? What could they have done differently? By providing agents with access to a full conversation timeline, you can gather most of this information before you even contact a failed customer. This saves your team time and helps get to the resolution stage of service recovery quicker. 2. Apologize and offer consolation The most important part of service recovery is taking responsibility and offering a genuine apology that acknowledges the customer’s frustration. By working from an apology script, you can stay consistent while remaining sincere. Agents should also approach a customer’s issue with empathy to make them feel heard. Integrating empathy exercises into your team’s training will prepare them to field these issues with care. Customer service recovery can reduce customer churn, foster brand loyalty, and improve revenue 3. Resolve the issue Resolving customer failure correctly can be more complex than it seems. To ensure your customers are satisfied with their resolution, offer your team the right solutions and techniques, like: A comprehensive knowledge base with FAQs Smart routing to the right experts for their issue Service channels that fit their needs, including self-service options Proactive communication solutions that will put customers at ease 4. When in doubt, go the extra mile Customers have more choices than ever before, and they’re not afraid to take their business elsewhere if they feel disrespected or unhappy with the service they’re given. That’s why it’s so important for businesses to go the extra mile for customer service recovery. So really give them service! Use their name when addressing them, thank them for the time they took out of their day, correct any previous mistakes, and let them know their business is appreciated. And remember at the beginning of this guide when we said this is a lemon of an experience for customers? Well, now’s your chance to sweeten that experience into lemonade. Turn their negative experience into something much more positive by offering a consolation like a refund, voucher, or other token of appreciation. 5. Survey customers to prevent future issues Check back in on your customers with a customer satisfaction survey not long after you’ve helped them. Then use that data to determine how effective the service recovery was, as well as the potential for this customer to become a promoter for your brand. Data like this across your whole contact center can help you uncover trends in customer service recovery that you can more swiftly act on in the future, too. Once you have identified and resolved your customer’s issue, you now have the opportunity to prevent further customer failure. Gladly tools like People Match help customers reach the best-fit agent to resolve their issue on the first try. Common service Recovery Examples After answering “what is service recovery” in theory, it can help to know what you’re looking for in practice. Let’s see what it looks like in action with some examples of situations that require your customer experience team to center the customer and their issue and how to best handle it. A customer experienced technical difficulties with the product Agent personally apologizes Agent asks what was lacking with the product AI and/or agent catalogs the response to prevent future issues Agent offers customer a different service within the company Potential to offer a refund as well A customer received a defective product Agent immediately apologizes for the inconvenience Agent asks what was lacking with the product AI and/or agent catalogs the response to prevent future issues Agent offers to send a replacement product A customer was overcharged Agent apologizes for the oversight Agent refunds the overcharge Agent offers a free month of service A customer receives an item late Agent apologizes AI and/or agent looks into cause of the delay Agent offers a discount for future business A customer experienced poor customer support with different agent Agent apologizes for their colleague’s performance AI and/or agent notes who the previous agent Previous agent receives training to prevent future service failures A proactive agent catches service failure before it happens Agent offers customer options to help themselves through IVR or chat Customer can connect with the right agent the first time Agent treats customer to an improved experience as soon as the conversation begins These are just a few examples of how customer service recovery can be used to resolve customer issues and build customer loyalty. By properly preparing your agents for these situations, you will recover customers more effectively and reduce your levels of churn. From Service Recovery to Customer Loyalty We’ve just gone from service failure lemons to service recovery lemonade, and you’ve learned just how much of an impact a well managed service recovery strategy can have on your business. So now you can assist your agents in the next step of your CX program—providing a loyalty-driving experience that customers will never forget. Check out the Driving Customer Loyalty With the Metrics That Matter guide and discover how to measure vital customer experience metrics on the path to loyalty for long-term business growth. DEMO Have Your Cake and Eat It Too — Get Exceptional CX While Saving Money Book a demo Share
