When a business messes up an order or provides bad service, customers usually give the business a second chance. When the business fails to make it up to them, however, it faces serious repercussions, new research shows.
A Washington State University study revealed that when a company strikes out a second time — for example, by failing to resolve the initial mistake — the insult added to injury can lead customers to seek revenge by aggressively confronting frontline employees, bad-mouthing the firm or complaining to third parties to generate negative publicity.
Such occurrences can lead to significant employee stress and further loss of business, the research shows.
When things go wrong, customers typically focus on three aspects of the experience: how inconvenient the first mishap was, who was to blame for the failures and how fair the recovery process was, said Jeff Joireman, one of the study's authors. When customers experience a severe service failure, blame it on the firm and feel they have been treated unfairly, they often seek revenge.
Although that may be a common response, customers may also want to reconcile with the business, under the right conditions, the researchers suggested.
"Desire for revenge and reconciliation are not necessarily opposites," Joireman said. "Whether a customer desires revenge or reconciliation hinges on whether the customer believes a firm has positive or negative motives."
Following a second service failure, Joireman added, customers might first seek revenge, such as by posting negative comments online, but then seek to reconcile when a firm, after seeing the posts, contacts the customer to resolve the complaint.
In two separate experiments, researchers confirmed that customers get angry and seek revenge because failed service recoveries seem to imply that the firm has a negative motive and is taking advantage of them. On the flip side, if customers believe a firm's motives are positive, they are more likely to engage in steps to repair the business relationship, rather than retaliate.
In a third experiment, researchers tested actions a business took to encourage customers to give them a third chance following a failed attempt at rectifying the situation. The researchers found that simply saying "sorry" was not nearly as effective as when the apology was combined with compensation, which is viewed as a sacrifice that benefits the victim and shows that the business has positive intentions.
"Explanations about the occurrence of the failure, as well as apologies paired with compensation, appear to be effective ways for firms to reduce negative customer response," said Joireman. "It is essential that firms find a way to convey their positive motives to customers.
Based on the study's results, Joireman said, when a business's manager knows a customer has experienced a severe service failure and perceives the procedures used by the business to be unfair, the business should act quickly to help the customer perceive a positive motive and move toward reconciliation.
Additionally, he believes managers need to train frontline employees to recognize the importance of perceived motives and empower them with the skills to provide a clear explanation of the firm's positive intent, or offer an apology paired with compensation, thus making customers less likely to engage in retaliatory behaviors.
The study was co-authored by Yany Grégoire, Berna Devezer and Thomas Tripp.