Techdirt has a great (yet horrifying) piece from the “how not to connect with customers” trenches. I agree with it pretty completely, but I would also add to this statement:
At some point or another everyone screws up. Everyone makes a mistake. Customers recognize this. But if a company never makes a mistake, then customers may still wonder how they’ll be treated when that future mistake comes. However, if the mistake has been made, and the response was good, the customer is confident that future mistakes will be handled well also.
Screwups are also memorable interactions – and how you handle them is memorable as well. Not to skew too far into the territory of silver linings, but a single screwup handled well can be more memorable than 100 mediocre-to-satisfactory experiences and might translate into good word-of-mouth. I would argue that a customer may not spend much time wondering about how a fairly competent company might handle a screwup, but that company may just not be very top-of-mind. You wouldn’t recommend them, because you just might not think of them at all.
Extraordinary service is memorable. A screwup, handled badly or well, is memorable. Reasonably competent service or an experience that gets you where you need to go without any great highs or lows (barring any extraordinary expectations from the consumer)? Not very memorable.