When a restaurant goofs up a customer's order, sometimes saying sorry is the wrong solution. According to a study in the top-tier Journal of Marketing, the conventional one-size-fits-all approach for fixing customer service breakdowns fails because such tenuous interactions call for individualized treatment.
The paper, coauthored by Brigham Young University business professor Glenn Christensen, identified three main types of customers - relational, oppositional and utilitarian - as well as how businesses can diagnose and treat each customer's preference appropriately. The study's lead author is Torsten Ringberg of the University of Wisconsin, Milwaukee; Gaby Odekerken-Schröder of Maastricht University is another coauthor.
"It's remarkable that consumers react in predictable ways," said BYU's Christensen. "Once you understand who they are, you can respond in ways that meet their expectations rather than forcing a service recovery formula upon them that may or may not connect."
Lead author Ringberg remembered sitting next to a woman on a plane who felt totally different than he did about the airline's reaction to the three-hour delay they had suffered through. He wondered why, in this age of customization, responding to mistakes is still generic.
"Companies are increasingly focusing on individual consumers when delivering products and services - for example, tailor-making their PCs and even cars," Ringberg said. "Yet, when it comes to recovering a customer's trust, most companies still deliver a uniform approach."
Satisfying upset customers, or "service recovery" in marketing lingo, has traditionally entailed acknowledging the mistake, apologizing, providing compensation and then attempting to reinstate the relationship. However, the researchers suggest companies train their frontline employees to be adaptive and meet expectations according to their customers' existing views.
"It costs five times as much to attract a new customer than it does to retain them - that has a big impact on the bottom line," Christensen said.
Only five percent of customers who experience a failed good or service complain, he continued. But when they do, managers, customer service reps and sales associates can be better prepared to address their concerns.
"Every type of recovery preference requires that the firm make things right, but there are simply differences in the packaging," explained Christensen. "Some people just need some love, whereas others want victory, control and power."
The three categories of customers identified in the study (outlined below) can be used by companies to identify the best type of response in case of a service breach.
"Given that most people's preferences can be captured by one of our three major frameworks, it should be possible - financially and training-wise - to provide semi-personalized feedback that is likely to increase satisfaction and retention," said Ringberg.
The relational customer expresses hurt for the service failure and then seeks consolation in a voice dripping with emotion. This customer can be a person who likes to build relationships with people at the grocery store.
"These are the touchy-feelies," said Odekerken-Schröder. "The relationals are the ones who say ‘I can't believe you let me down-I feel betrayed.'"
The provider should meet the relational with a sincere apology, explain why things went wrong and repair the relationship with the customer. A company should only give compensation after consoling the customer.
On the other hand, oppositional customers are aggressive, overly demanding and antagonistic in the customer service process. They do not see the customer service process as an interaction-but as a battle. Providers should meet them with a range of compensation options and allow the customer to feel victorious in the process.
"The oppositionals are grumpy- they are the person who is shouting and wants to feel like the little guy who just slayed the beast," said Ringberg.
Unemotional, poker-faced customers are utilitarians. They come across like the stereotypical economics major - very rational and bottom-line driven. Utilitarian consumers evaluate the time and effort they invested and expect equal compensation.
"This is the ‘Spock' of service recovery. Everything is calculation based," described Christensen.
The provider should acknowledge the mistake - but not apologize because it clouds the issue - then give a monetary compensation. Utilitarians view an apology as an attempt to buy them off with emotion.
Customer service preferences are not directly correlated with other personality traits. Likewise, the study found no correlation with age, gender, socioeconomic status, or other categories businesses traditionally use to segment their markets - a man buying power-tools at the hardware store could be a relational consumer.
The study focused on a diverse group of 24 customers who had experienced goods or service failures. Participants shared service experiences through writing, discussion and pictures. The combination of approaches elicited rich insights into consumer response in the service recovery process.
In summing up the researchers' advice to companies interested in enhancing service recovery, Ringberg said, "The typical training that frontline personnel receive to identify consumer preferences could easily be adapted to diagnose the preferences of disgruntled consumers and thereby improve efforts to win them back."