B2B International
B2B International

April 14, 2011

In this week’s Thursday Night Insight, Julia Cupman draws the link between the simple act of apologizing, and increasing customer loyalty.

Have you ever been upset or angry by the words or actions of someone, but been ready to forgive and forget if only they could say sorry? As Elton John has sung numerous times, sorry seems to be the hardest word.

A couple of months ago, I returned to my apartment building to find 3 fire engines, 2 police cars, and an ambulance outside, and a lobby that was totally flooded with water. I later found out that a major water pipe had burst on the second floor, leaking 250,000 gallons of 180 degree water (the equivalent to a quarter of the amount of water in an Olympic sized swimming pool, but boiling)!

As you can imagine, this flood caused extensive damage to the building, in that it destroyed walls and flooring, and ruined the electrics – including the fire alarm system and all 5 elevators. As I live two thirds of the way up this 35 floor building, I was one of the many people who had to take the seemingly never-ending stairs for weeks, while our incompetent building management couldn’t arrange for the elevators to be fixed quickly.

In traipsing up and down the stairs each day, I noticed a common theme to the complaints of the residents around me: the building management hadn’t written to say sorry for the inconvenience caused. It occurred to me that anger was surmounting, not so much at the problem the building faced, but at management’s apparent inability to effectively resolve the problem.

As a market researcher, problem resolution is an issue I come across in virtually every customer satisfaction project I work on. There is always an angry respondent bitterly recounting how a problem was inadequately resolved by their supplier. It’s inevitable that in any company, problems will occur, but I have yet to come across an organization that has a procedure in place to respond to problems effectively. Indeed, it has been estimated that most companies spend around 98 percent of their time reacting to problems and less than 2 percent of their time preventing them.

Why do these companies struggle saying sorry? It’s probably because we live in a litigious society in which apologizing for an error or incident is synonymous with admitting liability. Rather than face expensive lawsuits, companies choose to deny, deflect, or defer responsibility. Anything but say sorry!

What these companies don’t realize is that an apology is actually a powerful relationship-building tool, for studies have shown that customers develop greater loyalty to a company if they have experienced problems that were satisfactorily resolved, than if they had never experienced a problem at all.

Of course resolving problems entails far more than simply apologizing. However, key drivers of customer satisfaction and loyalty are so often these smaller, softer things which seem so inconsequential and yet are so impactful. As for the management of my apartment building, it wouldn’t have cost them anything to send an apologetic e-mail to residents. Words are indeed cheap, but when it comes to illustrating the importance and value of your customers, saying sorry is priceless.