When it pays to swallow your pride

FSB -- No matter how good you are at customer service, let's face it: Periodically you are going to screw up. That's when you face a test - and an opportunity. Handle the incident poorly and you may create a corps of negative customer evangelists, trash-talking your business to anyone who'll listen. Fix the situation, and you may secure a customer for life.

John Tschohl, president of the Service Quality Institute in Minneapolis (customer-service.com), is one of the world's foremost experts on service recovery. According to his research, a recipient of good customer service will tell five other acquaintances on average. A recipient of bad service will tell ten and possibly even hundreds if he goes online to complain. But turn a poor experience into a peak experience, and the customer will sing your praises to 20.

An apology is a great first step. Think about the times your temper would have dropped 50 degrees if someone simply fessed up. Nurse Next Door (nursenextdoor.ca), a Vancouver home health-care company with $10 million in annual revenue, does this in dramatic fashion. When the company stumbles, it delivers customers a "humble pie," a fresh-baked apple pie accompanied with a note that reads in part, "We are very humbled by our mistake and sincerely apologize for the poor service." Even if you don't feel your business is in the wrong, it's wise to say you're sorry and ask what you can do to help. The firm has spent $1,300 on pies but reckons it has kept customers worth $90,000 in annual sales from defecting.

6 firms that put the customer first

If a foul-up threatens to drive away a loyal customer, a dazzling recovery is needed. John DiJulius owns six salons in the Cleveland area (johnrobertsspa.com) with $5 million in annual sales. When Heidi DuBois-Robinson, 43, came in for a hair coloring, her suit got stained. She took it to the cleaners, but the stain remained. So she called DiJulius, who sent her a $385 check for a new suit, no questions asked. He also threw in a free facial and pedicure.

Since the incident, Robinson says she has raved about DiJulius's salon to roughly 30 other friends. Not only is she still getting her hair cut and colored there, but she has started getting facials and pedicures. "At first, I thought about never going back," she says. "Now I would never think of going anywhere else."