Often companies are not aware of additional inconveniences caused by their service failures. They know the new TV you bought from them broke but don't know you had all of your friends over to watch the game when the picture went out.

One of the reasons I'm interested in service recovery is because years ago I was working for the customer service line of a newspaper. When people missed their newspapers, I was the person they called. I understood the situation the same, whether they cursed at me or used a friendly tone of voice. I think it's important to be very clear about what the problem was, the inconvenience it caused you, what you are expecting them to do to recover -- but be kind in your behavior as well.

Oftentimes, they'll do what's necessary to keep your business -- but they need to fully understand your expectations.

Tangible is what the company does to appease customers, and psychological is how they do it. For example, we had a student who paid for flowers to be delivered on Mother's Day. By accident, the flowers weren't delivered. The florist profusely apologized for the oversight -- that was the psychological. Then, he recovered by delivering a different bouquet of flowers to the mother's house every day for a week after that -- that was the tangible.

The organization later faced a class action lawsuit, and I got a rebate check as part of the settlement. Customer service problems can be very expensive for companies, and a lot of times they don't think about the long-term costs and the loss-of-loyalty issues they create.

If companies can figure out what their failures are going to be and how they can make customers feel good about them, they are going to keep those customers in the long run.