The Importance of Being Earnestly Sorry

The current issue of Business Week (12 Oct) carries a short piece in the "BTW" section (online here; second item) on "Why it pays to apologize".

The article is based on a paper by four researchers at the UK's Nottingham School of Economics (available online here), which finds that "apologizing yields much better outcomes for the firm than offering a monetary compensation."

The researchers worked with a large firm selling products on Germany's eBay site. When customers were dissatisfied with their transaction, posting an online comment to that effect, they randomly received one of three responses: an apology, a small amount of money (2.5 Euros), or a larger amount of money (5 Euros); all three groups were then asked to remove their negative online evaluation. None of the respondents were aware that they were participating in an economic experiment.

The result? More than twice as many customers who received an apology withdrew their negative comments compared to customers who received cash (45% vs 21%).

Business Week quotes Johannes Abeler, a Nottingham research fellow and one of the authors of the study, as noting that the emailed apologies were effective "even though they were brief and impersonal -- and asked for something in return."

This doesn't surprise me. I've had a lot of experience in customer satisfaction policy and research, both on the corporate and supplier sides. Here's an important example:

Years ago, I was working late putting together a presentation, when the phone started ringing in the customer relations department, whose offices were right next to mine. Eventually, more because the noise was distracting than anything else, I answered the phone. Relieved that she had finally reached someone, a woman poured out her story of how the product had failed, and what it would cost to repair, and yes it was out of warranty, but what was she supposed to do.

When she finally paused for breath, I said, "I am so sorry. What a terrible thing to happen!"

There was a brief, surprised, pause, and she said, "Thank you. All I really wanted was for someone to acknowledge that I had a real problem."

We worked something out for her -- I don't remember the details -- but her comment stayed with me. She was upset and angry, but she wasn't really looking for an immediate solution; she was looking for affirmation and an apology.