Douglas Horton, an American clergyman is reputed to have said that "being sorry is the highest act of selfishness, seeing value only after discarding it". Selfish or not, the notion of using an apology as a customer rentention strategy is increasingly being used in service industries like airlines and hotels where customers see value in an apology more so than in anything tangible or material leading to better customer retention after service snafus.
This week's Wall Street Journal's Middle Seat column has an article entitled "the Art of the Airline Apology". Among the interesting nuggets in the article is a2009 study by researchers at the University of Nottingham's School of Economics in the United Kingdom which found that apologies can be more valued by customers than even compensation. Another study of t00 customers who posted negative comments on the German site of eBay found that more of them (45%) withdrew their negative comment pursuant to an apology than the 21% who withdrew it when offered the equivalent of $7.
The Middle Seat notes that SouthWest airlines uses "software to perform triage on upset customers. Computers look for keywords that show up in the letters, then sort the notes into four personality categories: Feelers, Drivers, Entertainers and Thinkers. Customer relations agents then write to that type of personality." Apparently, the US Dept. of Transportation levies fines on airlines that do not respond substantively to customer complaints.
For some airlines like United with a high number of complaints that has prompted the establishment of a department with nearly a thousand employees, all geared around responding promptly to customer grievances.
Apologizing as a strategy appears to have instantly paid off for the owner of several hotels in the Bay area including a prestigious resort in Napa, Ca. Unlike in the Chick-Fil-A case, which also involved an intolerant antediluvian perspective on gay couples, the principal here was quick off the mark with an apology. That enabled him to keep the honor of being a Grand Marshal for the city's Fourth of July parade.
Horton's musings notwithstanding, a strategy of offering an apology for service and other lacuna, whether real of perceived as so by the customer, is one that is relatively inexpensive with evidently exponentially greater returns as compared to the traditional propensity to upgrade, offer discounts and/or comps. It would of course, be helpful if at the same time organizations use it as a teaching moment to minimize if not avert a recurrence.