What is More Important to an Upset Customer – Cash or an Apology?
Upset customers and clients are part of any business. We don’t like to admit that it’s true, but the simple fact is that customers will be disappointed with us, our products, or our services from time to time. This is when most people in business get nervous and don’t know exactly how to manage upset customers. Many figure that the customer is going to be unreasonable in their demands on how to fix the issue, expect products or services for free, that they can’t admit to any wrong doing for fear of retribution by the company or the customer taking advantage of the situation, etc.
The good news is that what they really want are two very simple words – I’m sorry.
Really, it’s that simple. Now, simple doesn’t mean easy. You have to genuinely mean it when you say it. The customer wants the empathy for their inconvenience and dissatisfaction before we even try to resolve the situation. Without the empathy , if you deliver a flippant “So sorry,” it just won’t fly.
Once we convey our apologies, the consumer is much more likely to work with us to find a mutually agreeable solution to the problem. And, aside from the few exceptions that we all know about, most customers are reasonable and fair in their expectations for resolution.
There is an article in www.dailymail.co.uk that will be surprising to many. It states that when resolving a problem with a customer, most customers value a true and genuine apology over receiving a cash payout from the company.
The article is based on a study conducted by the Nottingham School of Economics’ Centre for Decision Research and Experimental Economics. NSE research fellow and study co-author Dr Johannes Abeler claimed the results proved apologies were both powerful and cheap.
The study was done using a seller on ebay who generated 10,000 sales per month over a six month period dealing with their unhappy customers. The researches predicted that customers would not accept the apology over the cash. The apology was given by a faceless company, not face to face, and was certainly in the best interest of the company to apologize rather than to pay out money.
The stand-alone apology blamed the manufacturer for a delay in delivery, adding: ‘We are very sorry and want to apologise for this.’
Customers offered money were told: ‘As a goodwill gesture, we can offer you five euros if you would consider withdrawing your evaluation.’
Some 45 per cent of participants withdrew their evaluation in light of the apology, while only 23 per cent agreed in return for compensation.
The study also discovered that a higher purchase price further reduced the number of customers willing to forgive for cash.
Yet the size of the initial outlay had no effect on the willingness of participants to settle for simply reading the magic words: ‘I’m sorry.’
This goes to show that throwing money at a problem is not necessarily the answer. People want an apology for mistakes and for responsibility to be taken. Consumers today recognize that issues arise.
Remember, the problem is not going to define you or your company. How you respond to it will. Customer satisfaction and customer retention rates dramatically improve when a company has taken the time and effort to serve the customer relationship. By focusing on customer service through staff training to include an apology when necessary, you will see customer satisfaction levels increase.