Sleep Away from Retailing Errors

An article in last Sunday’s San Francisco Chronicle took note of how consumer anger caused three retailers to significantly change plans:

• Bank of America withdraw the idea for a $5 monthly debit card fee when a Facebook campaign convinced BofA customers to themselves do a withdrawal—closing their accounts. No apology from BofA for the bother, though
• One day after announcing a $2 fee for online bill payments, Verizon Wireless dropped the idea, saying they’d responded to their customers’ objections. No apology from Verizon for the presumptuous tone of the original fee announcement.
• Netflix, Inc. galumphed from one subscription arrangement to another. After things settled down, Netflix CEO Reed Hastings sent customers an apology starting, “I messed up,” and ending, “Respectfully yours.”

     How profusely and for how long should a retailer apologize after making an error which, let’s say, deeply offends two-thirds of their target market and severely irritates the remaining one-third.
     The shopper psychology answer: Apologize credibly and promptly move on.
     In the 1970’s, psychologists gave the name “sleeper effect” to a phenomenon in selling political candidates: When the arguments for a candidate were convincing, but the person making the arguments was irritating, the consumer would at first not be at all convinced, but after a period of time would forgot about the source and be persuaded by the message.
     Subsequent studies by consumer psychologists found that the sleeper effect works in a range of retailing situations, including apologizing for an error. Research centered at University of Illinois-Chicago Circle described the conditions essential to produce the sleeper effect. Here is my translation of the findings into the steps you—the retailer—can take to activate the sleeper effect when you think you’ve irritated customers:

• Decide what you’re apologizing for. It might be the way in which you announced a change, not the change itself.
• Ask the consumer if they have any questions you might answer. If they do, answer the questions promptly.
• Tell consumers how much you appreciate their business and how continuing to do business with you will benefit them.
• If a customer closes an account with you, wait one month and then send him an e-mail or postal mail invitation to come in to shop with you. Have the invitation signed with the store name, not your name. This is an exception to the rule that it’s better to use “I” than “we” in error recoveries.

Click below for more:
Put Customers to Sleep After Irritating Them
Apologize to Customers for Retailing Errors
Trick Me Once, I’m Outta Here