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📝 Intro

US companies lost $1.6 trillion in 2016 due to customers switching after poor service, and 44% of unsatisfied customers vented on social media (according to Accenture data).

So any improvement in recovering after failing a customer has a big impact.

An elaborate study used 12 experiments to show us how to do that.

P.S.: If you’re interested in tools and systems to stay productive, I’ve been subscribed to Dan Shipper’s Superorganizers for a while now.

He interviews CEOs, content creators, and best-selling authors to learn how they structure their calendars, take notes, read books, get through their inbox, and manage their emotional lives. Check it out if you might find it useful!

Previous insight: The “Sold-out” effect (100+ more insights here)

Use “Thank you” instead of “Sorry” to better recover from a failure

Impacted metrics: Customer satisfaction | Customer spending | Customer retention
Channels: Customer service | Marketing communications
For: Mostly B2C
Research date: December 2019

📈 Recommendation

After a mistake or service failure (e.g. a long wait, wrong product delivered), thank the customer for their understanding (e.g. “Thank you for your patience”) instead of apologizing (e.g. “Sorry to keep you waiting”).

People will be more satisfied and less likely to complain.

If the failure is severe (e.g. waiting 60min to order at a restaurant), you need to accompany the “Thank you” with compensation (e.g. a free drink, a discount).

Thanking or apologizing before the failure is more effective than doing it after (e.g. when you know the service will be slow).

🎓 Effects

• Thanking people after a service failure, rather than apologizing, is more effective at restoring their satisfaction and reducing complaints. Either method is better than not saying anything.

• For example, people in experiments were:

  • 15% more satisfied when they received a reward below their quality expectations and were told “Thank you for understanding” rather than “We apologize”

  • 31% more likely to complete a survey after initially being given the wrong one when the lab researcher thanked them rather than apologized

• The effect is strongest for narcissistic people (those with a strong desire to boost their self-esteem), who tend to be younger and heavy users of social media. It disappears for those with a low level of narcissism.

(People’s reactions when asked to imagine a plumber that arrives 1 hour late - Click to zoom in)

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🧠 Why it works

• When we apologize, we shift the attention to ourselves:

  • Acknowledging our failure helps forgiveness

  • But it also makes it clear that it’s our responsibility

  • This encourages negative thoughts about us to linger

• When we thank, we shift the attention to the customer:

  • Highlighting their merits and contribution (e.g. patience, understanding)

  • And people like being told they have good traits (e.g. a good, patient person)

  • It still implies that we’re at fault (since we recognize their sacrifice), but in a softer way

✋ Limitations

• The effect probably backfires in extreme situations. A valet that crashes a client’s car and then says “Thank you for your understanding” probably won’t go down well. However, this was untested, we don’t know what exactly counts as serious vs extreme failure.

• We don’t know if there are long-term risks to this technique. For example, thanking customers could make them feel that they’re entitled to preferential treatment in the future (e.g. no fees for a late payment because they were patient during your previous failure).

🏢 Companies using this

• The idea of saying “Thank you” instead of “Sorry” has appeared in popular media (e.g. Buzzfeed) in recent years.

• It remains rare and inconsistent in customer service teams and company communications. Just like using “I” (I’m happy to help you) instead of “We” (We’re happy to help you), it does not seem to be part of company guidelines yet.

⚡ Steps to implement

• When you fail your customers (e.g. break a promise or expectation), thank them for their patience or understanding instead of apologizing.

• If the failure is big (they had a pretty bad experience), you need to also offer them a form of financial compensation (e.g. a free gift) if you want to recover their satisfaction and loyalty.

• If the failure is extreme (it was a disaster), thanking them may backfire. Stick to a timely, empathetic, and elaborate apology to limit the damage.

🔍 Study type

Lab and online experiments. United States and China

📖 Research

You, Y., Yang, X., Wang, L., & Deng, X. (December 2019). When and why saying “Thank You” is better than saying “Sorry” in redressing service failures: The role of self-esteem. Journal of Marketing.

[Link to paper]

🏫 Affiliations

College of Business, New Mexico State University; Darla Moore School of Business, University of South Carolina; School of Management, Zhejiang University; and Fisher College of Business, The Ohio State University. United States and China

Remember: This is a scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s how science works). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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