Just say sorry

Keeping customers happy has always been an important part of business.

But in the new economy, where disgruntled customers can trash a company’s reputation with a few online comments, that’s even truer.

It’s a difficult problem, but the solution could be remarkably simple, according to researchers at Nottingham University: just say sorry. A sincere apology is even more effective than an offer of financial compensation, the study found.

In fact, people are more than twice as likely to forgive a company that says sorry than one that offers them cash instead, according to academics from the Nottingham School of Economics’ Centre for Decision Research and Experimental Economics.
    
The researchers set out to find whether customers who have been let down continue to do business after being offered an apology.

They worked with a firm responsible for around 10,000 sales a month on eBay, controlling its reaction to neutral or negative feedback.

Some customers were offered an apology in return for withdrawing their comments, while others were offered compensation of either £2.50 or £5.

The simple 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 £5 if you would consider withdrawing your evaluation.”

Some 45 percent of participants withdrew their evaluation in light of the apology, while only 23 percent agreed in return for compensation.

Customers could have been forgiven for deciding that the apologies issued in the study were insincere: they came in an impersonal way from a large, anonymous company that had a clear commercial incentive to say sorry.
But none of that seems to have mattered.

The results prove that apologies are both powerful and cheap, said Dr Johannes Abeler, co∞author of the study.

“You might think that if the apology is costless then customers would ignore it as nothing but cheap talk – which is what it is.

“But this research shows apologies really do influence customers’ behaviour – surprisingly, much more so than a cash sweetener,” he said.

“It might be that saying sorry triggers in the customer an instinct to forgive – an instinct that’s hard to overcome rationally.”