How to effectively respond to customer complaints and increase loyalty.
Earlier, I wrote a lot about the science and psychology behind reward programs. Today, we'll look at another psychological principle and see how it connects with our business lives.
Criminal psychologists who criticize criminal justice systems talk a lot about how latency effects our criminal justice system. We'll use this latency effect to discuss how to effectively respond to customer complaints in an effort to increase customer loyalty.
The latency that criminal psychologists talk about is the time between the crime and the punishment. Because there's such a long period (months to years) between the time someone commits a crime and the time he's brought to justice, the criminal's subconscious mind doesn't recognize the cause-and-effect relationship between the two. Since the event closest to the punishment is the trial, the cause-and-effect relationship is made between the trial and the punishment. This is why criminals are angry at courts and the country, and blame society for their incarceration. They're also more likely to repeat the crime once released, as they don't associate the actual crime with the jail time.
Some say the solution is to make the due process of the law much swifter, so the crime/punishment relationship is strongly enforced in the criminal's subconscious. Chances increase, then, that jail time will be a clear consequence of the criminal's misbehavior, dissuading him from repeating the crime and, therefore, repeating the punishment.
This latency research has also been proven on lab animals in punishment/reward studies by people such as Ivan Pavlov and B.F. Skinner. Punishment is a negative reward, but the concept holds true for positive reinforcement as well. Rewarding someone for a good deed doesn't reinforce that good deed if the reward comes too long after the deed is done.
The Customer Service Connection
Generally, there are a few ways customer service centers handle complaints, and they can vary by industry. They include:
Except for the first example, all these techniques are valid reactions to customer complaints. Most include an incentive for the user to make a future transaction with the company. The question is, which actually increase loyalty and remove the customer's bad feelings toward the company?
Criminal psychology's latency effect can offer some insight. The longer the time between the company's "crime" (the reason for the complaint or product return) and the compensation or reaction (the punishment in the criminal example), the less likely the consumer's bad feelings will be washed away.
I receive a damaged item from a company. I get angry at the company and think its merchandise and quality assurance departments are terrible. If I get an immediate refund when I return the product, the wrong is righted. I'll think, "They made a mistake, but they took care of it swiftly. They're a good company." If, however, I'm issued a store credit, I won't have the same association. Because of the latency effect, I won't make the connection between the company's error and the actions it took to correct it. By the time I use the store credit (which could be months later), I won't associate that credit with fixing the problem at all.
Immediately react to and remunerate customers when you've done something wrong. Whether it's an immediate apology or actual money depends on the problem and your industry. By reacting immediately, you'll correct mistakes in your consumers' minds and actually build loyalty.
If your apology takes too long or your response (e.g., store credit, miles on a mileage account, coupons for their next purchase) is geared to be executed long after the incident occurred, customers won't be more loyal. They'll shop with you again (hopefully) because of the incentive, but they won't become more loyal. They'll still have a bad feeling over the mistake you never adequately responded to.
With the traditional customer service responses above, some have no real loyalty effect at all; others have a strong loyalty effect. The trick is to find a combination that has an immediate result in consumers' minds, increases loyalty, and has a business benefit for you.
Thoughts or comments? Let me know.
Until next time...
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Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.
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Wednesday, July 23, 2014