What to Do After You've Lost a Loyal Customer

Have you ever had a customer service experience where you thought you were on the receiving end of an elaborate prank?

About a year ago, I had signed up for a service and I just wasn’t super happy with it. I’d been (I thought) very clear in the intake process about what I needed, and a month or two into the service, my needs weren’t being met (and apparently, couldn’t be met).

I was mildly disappointed, but not irate—the level of service I’d received wasn’t horrible, just not what I wanted. I made plans to cancel it and put out a call on Twitter asking for services similar to Company A, that did XYZ (the sorts of tasks I needed).

Of course, one of their social media reps reached out to me, asking to email me about my complaints. I said yes—and the experience that followed made me feel like I was stuck in the Dead Parrot sketch (Monty Python, anyone?).

The conversation went along these lines:  

It went on like that for another two or three rounds—they even tried to get me on the phone to “discuss” (yes, because I’d love to waste time on a phone call after spending an hour arguing about word definitions with you via email!).

Suffice to say, I went from being in the “not a customer, but would maybe recommend someone else to them” crowd to the “not a customer, vehement dislike for the business, would actively warn others away” crowd.

As a business owner, this is the exact opposite of what you want to do. Even if you can’t retain a customer, you don’t want them to leave with a burning hatred for your business. So what can you do to prevent that?

Learn to Apologize

We’ve all had to apologize at some point, and we’ve all been on the receiving end of a bad apology. When it comes to retaining loyal customers, a great apology is your first line of defense. After all, customers want to stay with you—it’s the path of least resistance, and in general, humans love the path of least resistance.

They don’t even need to be bribed, as many companies assume. A study by the Nottingham School of Economics found that customers who have been let down are more than twice as likely to forgive a company that apologizes, over one that offers them cash or compensation for the trouble.

So, even if they wanted to leave at first, dealing with a problem in the right way can make a customer change their mind.

Here’s what you need to know about apologizing correctly:

Include Internal Attributions

This is a fancy way of saying “don’t blame external factors.” Even if it’s true, people tend to view apologies as more sincere when they include internal attributions (“this was my fault”), rather than focusing on. external attributions (“there was a glitch in the system”), according to one study. If there is a specific external cause that contributed to the customer’s problem, you can mention it—but after the internal factors have been mentioned and a solution has been offered.

Avoid Qualifiers

“Performatives” or “qualifiers,” as linguistics experts call them, can tank a well-meaning apology. These are phrases like: 

• As far as I know...
• To be honest...
• I want you to know...
• I hear you, but...
• I’m not saying that...

Sometimes, these phrases are used in what should be a harmless way. The problem is that, in our culture, they’re entangled with passive-aggressiveness and/or bad news.

As a result, when customers hear or read any of these phrases, it screams insincerity. Dr. James Pennebaker, chair of the psychology department of the University of Texas at Austin, studies phrases like these and notes that, since these phrases so frequently signal a lie or partial truth, they’re often confusing even in a neutral context. Avoid them, and tell your customer service reps to do the same.

Follow Starbucks’ Lead

In an article at American Express’s OPEN forum on apologies, the process of handling customer complaints at Starbucks is described as: 

• Listening
• Acknowledging
• Taking Action
• Thanking
• Explaining 

(Get it - latte?)

You don’t need to perfectly copy this process, but it is worth noting that explaining is the last step in the process, echoing the earlier distinction between internal vs. external attributions.

Most of the time, customers don’t care why it didn’t work—they just want to be acknowledged and reassured it won’t happen again, and then have that promise backed up.  

Fixing the Error

You’ve apologized (the right way), but want to keep mending bridges with this customer. What’s next?

Don’t keep apologizing

Image via Zendesk

It sounds counterintuitive, but saying “sorry” over and over again tends to lower customer satisfaction, according to the Q2 2014 Zendesk benchmark.

Their conclusion was that repetition of the word is indicative of poor customer service and/or a lengthy back and forth conversation. The customer doesn’t care how sorry you are—they just want their problem solved.

From Jason Maynard, a senior manager at Zendesk:

Repeatedly telling the customer that you’re sorry when an issue isn’t being resolved won’t help the situation. Instead, choose words that communicate the steps you’ll take to address the problem.

In other words, don’t apologize incessantly. Instead, tell them what you’ll do to fix the problem, and then do it.

Give your employees the autonomy to address complaints themselves

“Employee empowerment” sounds like a trendy buzzword, but it has real bottom line benefits.

In one Cornell University study, 320 small businesses were observed. Half of those businesses used “command and control” oriented management practices, while the other half gave their employees as much autonomy as possible. The results? Employee turnover (a huge profit drain in its own right) in the autonomy group was only 1/3 that of the command group, and growth was four times faster.

It’s a little more nuanced than just taking those results and running with them—the paper author himself warns that the results aren’t statistically significant when set against a larger backdrop.

That said, whether you’re going with an autonomous workforce or not, having guidelines and processes in place is important for success. If employees already know what they can and can’t do, they have to ask for permission less, which streamlines the customer service process.

This is especially crucial in this arena, where speed is of the essence. If customer service reps can move ahead on solving the customer’s problem, without having to get approval from management, their overall turnaround time is going to be faster, which means happier customers.

This doesn’t mean you have to give your employees entirely free rein—using vague phrases like “use your best judgement” might just stress them out.

Instead, come up with policies and procedures, like “you can approve refunds up to $X or Y% of the customer’s previous spending without asking for permission.”

Treat Customers Like Human Beings

Image via Ipsos MORI

In an Ipsos MORI survey, people who had had a bad experience with a company were asked what one thing would have made them feel more positively, aside from fixing the problem.

The majority (46%) said being treated as a more valued customer, which is over twice the combined number of people who said they’d like to be offered a discount or an extra free product or service. In other words, being nice goes a lot further, with more people, than handing out free stuff.

On the opposite end of the spectrum, we have companies like Time Warner Cable and Comcast, who regularly rank at the bottom of customer service polls. Why? They don’t have to treat their customers well—in many cases, they’re the customer’s only option. I’ve also experienced this with insurance companies (“our rep signed you up for the wrong plan, but we won’t do anything about it, and you can’t change your plan until November”).

Think about it this way: If the customer service spectrum ranges from Comcast to Zappos, where would your company fall on it?

Let’s See an Example: 

Now that we’ve gone over all the different pieces of what can retain (or even bring back) loyal customers after a mess-up, let’s see what that looks like in real life.

Microblogging site Tumblr went offline one weekend in December 2010 due to a server failure. The entire site was out, and it’s a time that creator David Karp remembers as the company’s most challenging time. Once the site was back online, Karp posted an update and an apology:

"The follow-up was not the techie postmortem, which I find kind of disingenuous and insulting to mainstream users," says Karp, noting that an overly technical explanation can be distracting and even add to the confusion. "We opted to give some technical detail as to what happened, but really make it all about how we messed up, we owe them better and here's what we're doing."

Note that, even though he could have blamed an external factor (the server failure), the focus was instead on how the Tumblr team had messed up and what they were doing to fix it.

Their first focus was getting users’ blogs back online, then the internal dashboard, and then figuring out how to prevent that from ever happening again (namely, by hiring more engineers).  A few years later, Tumblr was acquired by Yahoo for $1.1 billion. Not too shabby, right?

All Together Now:

To sum up, here’s what you can do to keep (or regain) loyal customers after a screw up:

• Learn to apologize well. Don’t try to foist the blame off on external factors, don’t include qualifiers like “As far as I know,” and tell the customer what you’re doing to fix the problem and make sure it doesn’t happen again.
• Once you’ve already apologized, don’t keep apologizing—customers don’t care that you’re sorry, they care that the problem isn’t fixed yet.
• Give your employees enough autonomy to deal with customer complaints without having to get approval for every little thing.  

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