Does taking the initiative to apologize to customers actually do more harm than good?

Enterprises can now use technology to detect service problems in advance and take the initiative to apologize to customers, but research finds that proactive apologies before customers are aware of mistakes will instead reduce satisfaction and repurchase rate. More apologies do not always bring better results, the key is to judge whether customers have known about the problem, and managers need to establish clear standards to achieve smart apologies.

Long before technological means enabled enterprises to detect and handle service problems in real time, Fred Taylor Jr. was given a special title by journalists: Chief Apology Officer. During his tenure at Southwest Airlines in the United States, he promoted a concept that was quite disruptive at that time: Do not wait for customers to complain, but form a team to take the initiative to contact customers, inform them of service disruptions, and apologize in advance to prevent dissatisfaction from continuing to escalate.

Nowadays, technological progress has greatly enhanced the ability of enterprises to implement this concept. Enterprises can monitor service quality with unprecedented intensity and apologize to customers as soon as problems arise. For example, Amazon uses a predictive logistics system to identify potential delivery delays and automatically initiate active apologies; Netflix uses real-time monitoring to detect video playback interruptions and directly apologize to affected users; AT&T can immediately detect network failures and contact affected users. Relying on these technologies, enterprises can respond quickly on a large scale, and in many cases take actions even before customers notice the problems.

However, the fact that enterprises have the ability to apologize faster and more widely does not mean that they should do so. As fault identification becomes more accurate and covers a wider range, not every minor service deviation requires an apology; once the judgment is wrong, the cost will be very high.

This study published in the *Journal of Consumer Research* challenges a deep-rooted inherent cognition in the field of customer service: as long as a problem occurs, the enterprise should apologize. The study carried out five experiments in total, including a large-scale field survey, and the results show that: actively apologizing before customers are aware of service failures will backfire, reducing satisfaction, trust, willingness to recommend and repurchase rate.

For executives, the implication is very clear: An apology mechanism formulated out of good intentions will continuously damage customer relationships if it is not properly calibrated. The following content will explain when apologies are beneficial, when they will cause harm, and how managers can design more sensible relevant systems.

Why Apologies Backfire

If you ask any service practitioner casually, you will most likely hear the first rule of customer service: always apologize. In our study, we surveyed 100 American practitioners in customer-facing positions: what should a food delivery platform do if a takeaway order is 10 minutes late. 74% of the respondents believed that the enterprise should apologize, 4% were not sure, and only 22% thought there was no need to apologize. Most people believe that compared with not apologizing, apologizing can improve satisfaction, trust, willingness to recommend and the number of repurchase orders.

However, seemingly high-quality customer service practices are not necessarily good strategies. This almost instinctive inertia, if directly written into the enterprise system without screening, is the root cause of mistakes made by many enterprises.

In order to verify the impact of apologies on the spot, we cooperated with a large food delivery platform and set up two control schemes of whether to apologize to customers for deliveries with a maximum delay of 15 minutes.

In the first four weeks of the study, for orders predicted to be delayed by less than 15 minutes, customer service would not take the initiative to contact customers. In the next four weeks, relying on the prediction algorithm jointly developed with the enterprise, once it was predicted that the order would be delayed for up to 15 minutes, the customer service would call the customer to inform the situation and apologize. This experimental design ensures that all other variables remain unchanged, and the impact of the apology itself is isolated separately.

The study found that customers who received apologies had a lower probability of repurchasing within 90 days, placed fewer orders, had a longer time interval between re-consumption, and the total amount of food consumption was lower than that of customers who did not receive apologies, with a revenue difference of more than 65,000 US dollars. Post-delivery surveys also showed that they had lower satisfaction, weaker trust in the platform, and were less willing to recommend it to others.

The core reason why apologies backfire is that apologies will remind customers that a service failure has occurred. In an online grocery shopping simulation experiment, subjects needed to re-select the products they had already selected, some of them received an automatic apology message from the system, and the others did not. Subjects who received the apology perceived service failures more clearly, which in turn led to lower satisfaction. This rule is not affected by the severity of the problem: no matter it is only a small number of products that need to be re-added to the shopping cart, or a large-scale re-selection is required, apologies will reduce satisfaction.

In addition to reminding customers of the existence of problems (such as informing delivery delays), the apology itself also conveys a signal: this error is the responsibility of the enterprise. For this reason, the negative impact it brings will not be produced by other remedial measures. In the hypothetical scenario where takeaway is late, only giving a neutral prompt of the delay without apologizing (referring to Uber's practice of updating the estimated delivery time in real time), customer satisfaction is basically the same as no notification at all. In contrast, the notification with an apology reduces satisfaction. Both messages mentioned the delay, but only the apology defined the incident as a service failure.

When Apologies Work

Of course, apologies are not always harmful. Apologies can convey sincerity and warmth, which are the traits that customers value. The key lies in when these benefits can outweigh the risk of "reminding customers of service failures".

Our conclusion depends on the scenario: when customers have not discovered the problem, apologies are often not worth the loss. The negative effect brought by awakening customers' awareness of failures will exceed the positive compensation brought by sincerity and goodwill.

Once customers have noticed the mistake, the situation is completely different. In this scenario, the apology will no longer "let customers discover the problem" — they already know it. At this time, the apology can improve satisfaction by creating a sincere and thoughtful feeling.

Therefore, the strategic focus of enterprise managers is not to apologize less, but to apologize smartly, and embed this set of judgment logic into the organizational system and process from top to bottom.

Wiser Service Remedy Methods

As enterprises' ability to detect faults and take the initiative to apologize becomes stronger and stronger, a set of judgment standards must be matched to distinguish when to apologize and when not to apologize. This is essentially an institutional design problem that requires executives to take the lead in promoting it. Managers can refer to the following set of judgment questions:

1. Has the failure actually occurred?

Managers often believe that the earlier the apology, the better the customers' experience, so they build a pre-apology system. Early warning can sometimes help customers reduce losses, which will be recognized by customers; but we found that predictive pre-apologies, even if the failure does not happen at last, will still reduce satisfaction. You can wait until you confirm that the failure has actually occurred before apologizing, to avoid unnecessary damage to customer satisfaction.

2. Are there legal or ethical considerations?

Some problems (such as product defects) require enterprises to disclose information, in which case apologies are both ethical and in line with legal prudence principles. But in other scenarios, an apology may be regarded as an admission of fault, increasing the risk of legal compensation. Managers need to weigh carefully and seek legal advice when necessary.

3. Has the customer already filed a complaint?

A customer complaint means that he has noticed the problem, which is a clear signal for an apology. A study shows that apologizing in response to customer complaints can improve satisfaction; proactive apologies without complaints will reduce satisfaction. Therefore, timely apology after receiving a complaint is a simple and effective practical guideline, which can also be smoothly implemented into the customer service process and escalation mechanism.

4. Is the customer already aware of the failure?

In some scenarios, managers can confirm that customers have discovered or will inevitably discover the problem, for example, the takeaway order has not been delivered at all. In such cases, apologies are usually recognized by customers.

When it is impossible to judge whether the customer has discovered the problem, the study suggests avoiding active apologies. Enterprises can remain silent, or push neutral notifications (such as updating the estimated delivery time), and while synchronizing information, do not define the incident as a service failure to prevent satisfaction from decreasing.

Appropriate and targeted apologies can repair relationships and build trust; but misused apologies will cause long-term harm. When formulating apology-related strategies, executives can comprehensively consider customers' awareness, complaint behavior, legal and ethical background and timing, so as to improve customer loyalty and protect enterprise profits.

Keywords: #Enterprise Management

Mason R. Jenkins, Mary Steffel, Paul W. Fombelle | Article

Mason R. Jenkins is a Practice Associate Professor of Marketing in the Belk College of Business at the University of North Carolina at Charlotte. Mary Steffel is an Associate Professor of Marketing at the D'Amore-McKim School of Business at Northeastern University. Paul W. Fombelle is an Associate Professor of Marketing at the D'Amore-McKim School of Business at Northeastern University.

Zhou Qiang | Proofreading

This article is from the WeChat official account "Harvard Business Review" (ID: hbrchinese), the author is HBR-China, and it is published by 36Kr with authorization.