Saying sorry really does cost nothing

Sep 21, 2009

(PhysOrg.com) -- Economists have finally proved what most of us have suspected for a long time - when it comes to apologising, talk is cheap. According to new research, firms that simply say sorry to disgruntled customers fare better than those that offer financial compensation.

The ploy works even though the recipient of the apology seldom gets it from the person who made it necessary in the first place.

The study was carried out by the Nottingham School of Economics' Centre for Decision Research and Experimental Economics.

Academics set out to show whether customers who have been let down continue to do business after being offered an apology. They found people are more than twice as likely to forgive a company that says sorry than one that instead offers them cash.

NSE research fellow and study co-author Dr Johannes Abeler said the results proved apologies were both powerful and cheap. He said: “We know firms often employ professional apologists whose job is to say sorry to customers who have a grievance.

“You might think that if the apology is costless then customers would ignore it as nothing but cheap talk - which is what it is. But this research shows apologies really do influence customers' behaviour - surprisingly, much more so than a cash sweetener.

“People don't seem to realise they're dealing with an expert apologist rather than an individual who feels genuine shame.

“It might be that saying sorry triggers in the an instinct to forgive - an instinct that's hard to overcome rationally.”

Researchers worked with a firm responsible for around 10,000 sales a month on , controlling its reaction to neutral or .

Some customers were offered an apology in return for withdrawing their comments, while others were offered €2.5 or €5.

The simple apology blamed the manufacturer for a delay in delivery, adding: “We are very sorry and want to apologise for this.”

Customers offered money were told: “As a goodwill gesture, we can offer you €5 if you would consider withdrawing your evaluation.”

Because customers had no idea they were taking part in the experiment, their behaviour was completely natural and unaffected. Some 45% of participants withdrew their evaluation in light of the apology, while only 23% agreed in return for compensation.

The study also discovered that a higher purchase price further reduced the number of customers willing to forgive for cash. Yet the size of the initial outlay had no effect on the willingness of participants to settle for simply reading the magic words: “I'm sorry.”

Dr Abeler, an expert in behavioural economics, said: “It's interesting to note our setting should have made it hard for an apology to work.

“The apology was delivered by a large, anonymous firm and wasn't face-to-face, and the firm had a clear incentive to apologise.

“All of this meant the apology should have been regarded by the customers as calculated, insincere and just cheap talk. Yet it still yielded much better outcomes than offering cash compensation - and our results might even underestimate its effects.”

Provided by University of Nottingham (news : web)

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User comments : 4

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zevkirsh
Sep 21, 2009
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Fazer
Sep 21, 2009
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Bob_B
Sep 21, 2009
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docknowledge
5 / 5 (2) Sep 22, 2009
Exactly. I had trouble with a product from a company with a long history for top quality products. I phoned them. The service rep was obviously distressed, and offered to replace the product immediately. I said, thank you no, I just wanted to let you know it didn't work properly. They didn't quite understand, and sent a couple email asking why I didn't want a replacement.

The answer is: they'd already appeased me.
Walid
4.5 / 5 (2) Sep 22, 2009
An apology works better because it shows people that you are thinking about their situation and caring about it, even if it was pretentious. On the other hand, offering money to fix a problem or even a replacement as @docknowledge (the comment above) mentions seems like an attempt to cover-up the situation and not to make things right. Since humans naturally live with other humans, apologies mean that this society member will help them and be considerate of the apology inducing situation in the future, but a gift offering means that the gift giver is trying to get away with a mishap this one time, while caring less about the affected person in the future, meaning that a future mishap is plausible. This is why people insist on apologies when offered gifts. They want to safeguard themselves from possible future incidences.
Velanarris
2.3 / 5 (3) Sep 22, 2009
Apologies aren't for the one offended, they're for the offender to "get past" the issue.
designmemetic
not rated yet Nov 09, 2009
I think a flaw in the conclusion might involve the use of money. Article states "Some customers were offered an apology in return for withdrawing their comments, while others were offered €2.5 or €5", so with the money involved it seems like lying for money, but without the money involved the a different psychology effect about minimizing the damage comes into play.