After a fatal wreck caused by Cost Condordia off the coast of Italy in January 2012, Carnival elected to compensate the Costa Concordia customers. After refund and reimbursement for travel expenses a 30% discount on future travel was Carnival’s way of compensating passengers. This was certainly cold compensation given what the passengers had endured. When I did an online search regarding customer compensation for problems experienced because of a product/purchased experience, I thought I would find a scale or an average amount of customer compensation based on purchase price, etc. What I found was surprising.
What I did find was a number of articles that suggested that customers value being heard, empathized with and apologized to more than compensation. For the greatest impact, compensation should be added to an apology. But never compensation without an apology.
A 2013 Customer Rage survey of 2,000 respondents revealed that “when lodging a complaint, most customers would prefer a quick resolution or an apology over pay-outs or free products” (“Resolving customer complaints”, 2015).
Derek Eccleston, Global Commercial Officer at eDigitalResearch, “The latest Customer Service Benchmark results suggest that …sympathizing with your customers and offering an apology is more likely to increase customer satisfaction than offering some form of compensation” (“Resolving customer complaints”, 2015).
When products are frequently out of stock, quality is shoddy, or repairs and customer support are poor, customer retention and branding is on the line (Bitner, Broetzmann, Grainer, Noble, 2014). But does saying “I’m sorry” really make it all better? My impression was that customers want cold hard cash to compensate for problems resulting from purchased products/experiences. Is there a point where an apology only goes so far?
Bitner, M., Broetzmann, S., Grainer, M., and Noble, C. (2014, March 18). What unhappy customers want. MIT Sloan Management Review. Retrieved from http://sloanreview.mit.edu/article/what-unhappy-customers-want/
Markidan, L. (2014, December 2). You screwed up, and you have an angry customer. Now what? Retrieved from https://www.groovehq.com/support/how-to-deal-with-an-angry-customer
Resolving customer complaints isn’t just about compensation. (2015, July 6). [Press Release]. E’DigitalResearch’. Retrieved from http://www.prnewswire.com/news-releases/resolving-customer-complaints-isnt-just-about-compensation-511713731.html
The Value of an Apology. (2014, December 2). [Online image]. Retrieved from https://www.groovehq.com/support/how-to-deal-with-an-angry-customer