How can banks improve the customer experience? A survey of 2,100 retail-banking customers in the United States suggests that institutions should start by examining the everyday events that most affect, for good or ill, a customer's perception of them. These "moments of truth" represent important opportunities for banks to assess their customer service capabilities and to ensure a proper alignment of investments with customer needs. The way such moments were handled was telling: mass-market customers who had a negative experience (say, an unexpected fee) during the previous 24 months kept 4 percent less with the bank than did those who had a positive experience (such as a deftly handled account opening). Worse, disaffected mass-affluent customers¹ were twice as punitive—especially devastating, since they generate 13 times more profit than mass-market customers did. Simple tools that expedite the opening of new accounts can help, but the way employees resolve problems is crucial. Clearly, banks must reexamine their broader service-recovery processes if they are to address the lapses that turn disgruntled customers into former ones.