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Giving Away the Farm: Compensating Angry Customers | #ICMIchat Rundown (August 25, 2020)

Person adding coins to piggy bank.

When our products or services come up short, apologizing is the right thing to do. Many businesses take the extra step of offering monetary compensation or a gift to make up for bad experiences. However, many customer service professionals know all too well that some customers try to take advantage of this generosity. For some, giving things away is unthinkable or not even an option.

Join us on Tuesdays at 1 p.m. Eastern, 10 a.m. Pacific to weigh in on the contact center industry's most pressing challenges. Next week, we explore "Show Me You Care: Listening and Appreciating Your Employees." A question preview follows this article.

This week's #ICMIchat explores what role monetary compensation, gifts, and giveaways play in the service recovery process. As we find out, money isn't always the best answer to a service failure. How it's employed can make a big difference in its effectiveness as an apology mechanism, and there are many meaningful, inexpensive ways to say, "I'm sorry."

Why They're Angry

Many things can make customers angry. While some of them have nothing to do with us, some have everything to do with us. Broken promises, missed expectations, disregarding the value of their time, and prior bad experiences can leave customers feeling on edge. External factors weigh heavily on customers' minds, too. A small service failure on our part may have set them back from an important or emotional goal. The best way to approach an angry customer is with empathy, humility, and a genuine desire to help.

Customers get angry when we don’t hold up our end of the bargain, miss expectations, or disrespect their time. To restore the relationship & confidence, we must: Take ownership of the situation, Investigate & explain, Make it right, and Compensate as necessary.

Customers get angry for many reasons...the main one is a gap between what was expected and what was delivered plus unkept promises... it takes effort to win them back... listen /apologize/ give a solution

Customer's typically become unhappy when expectations are not met; they can become angry when expectations are missed a second time. In my opinion, they just want their original expectation met (or exceeded).

Customers get angry when their expectations are not met. To satisfy them, it takes patience, active listening, ownership of the issue and seeing it through to a resolution.

Be Reasonable

Most customers are reasonable, and they would prefer to avoid bad experiences altogether. It's often impossible to completely undo a product or service failure; we cannot turn back the clock or make up for wasted time and effort. In most cases, customers desire to feel important, understood, and reasonably compensated for spoiled moments or defective products. Customer service must recover right the first time because weak recovery can amplify a tiny frustration.

Most angry customers will be reasonable when treated w/empathy and respect. But some will make unreasonable requests, esp when a major mistake has been made or an important deadline missed. In these cases make sure customers understand WHY demands can’t be met.

They’re likely rooted in reason but blow their top on the 4th transfer (for ex). Deservedly so. Repeated frustration yields unreasonableness. With everything, not just CX. That's human. Brands can/must do better and we have the contact center tech so no excuses anymore.

99% of the time they are reasonable. We are the ones that turn them into monsters. In most cases, the unreasonable ones really just want free stuff and might be committing fraud.

Pay Up

When our shortcomings have caused damage, broken customer trust, or been negligent toward customer needs, it is wholly appropriate for our apology to have a monetary component. Many companies do this already, but we must take great care to fix the root cause underlying the failure. No amount of money in discounts, refunds, and free products can compensate for recurring bad experiences and continuously broken promises. Customers must be able to trust that the problems they report will are for good.

When they have lost time or money, it’s appropriate to compensate. For long time customers, such compensations serve to indicate “your trust is more important than the underlying dollar value”. In most other situations, giving $ compensation is bad for the brand!

Its often appropriate -coupons, discounts, gift cards, samples, free trial. But it doesn't solve the root cause of the problem or guarantee resolution or satisfaction.

An apology gift with a monetary value could be inappropriate if the value of the gift is not commensurate with the situation. (hypothetical: Your car brakes fail due to defect, killing a loved one. The car company sends you a t-shirt and a $5 Starbucks gift card)

Depending on the situation it can be very appropriate. What is your customers satisfaction worth? Are you willing to lose a customer over a couple bucks? Companies can use monetary value to demonstrate ownership of a mistake to customers.

How Much Is Enough

Knowing how much to give in an apology is tricky. We want to be generous while still being profitable overall. We want to go above and beyond, yet remain reasonable and proportionate to the issue. A thorough understanding of the incident, and key metrics like customer lifetime value (CLV), can help keep our response grounded in reality. Unique and meaningful is always better than expensive and routine; keep this in mind when determining how to compensate dissatisfied customers.

It truly depends. I would consider two things:How much did we screw up? & How valuable is the customer? We should also be careful to not make it a habit of giving away things when it's not ou fault

There's no simple answer for how much you should give away. Is this a regular, profitable customer? How's the competitive landscape? Be generous. It can be the gesture that keeps the customer from becoming an advocate for a competitor.

Again, not an easy balance. It's not just about monetary value. A thoughtful apology sometimes means more if it's from the right person. The answer is somewhere between "enough to show we're serious" and "now you're just being greedy."

A lot comes down to high-value custs. Hopefully companies have created a matrix to differentiate high-value custs from low-value ones. Yes, all custs are impt. But it is also a law of econ too and CLV should be the guide.

Give When You Cannot Gift

Not all organizations are free to make gifts to customers part of their service recovery. This can be a sticking point for government, healthcare, and many other makers of goods and services who want to do right by their customers. Exhibiting genuine care, committing to do better, and a swift correction is often all it takes. Spending a little extra time to help the customer, provide insight or education, make yourself more available, or take an interest in something important to them are inexpensive ways to go above and beyond.

I once worked with a utility that billed clients for city water without the authority to issue any credits. We came up with ways to build value without any such as letting the customer know about available rebate programs, ways to reduce water consumption, etc.

If you can’t give something away to make a customer satisfied, make sure you listen and ensure they feel heard. Those are not the same thing, so pay attention to both! If applicable, let them know action will be taken to avoid similar problems in the future.

Be really good, for one. Avoid mistakes and be quick at fixing them. Make sure you own it and make it easy for the customer. Perhaps you can't give them things but can be flexible with payment when warranted, etc. Consider having an escalation/service recovery team. This can be a step to taking proper care of these customers. Also, something like a written thank you or apologize sent via snail mail can have a positive impact on experience.

Enabling Agents

The longer it takes to resolve a problem, the more expensive the solution will become, economically and emotionally. Nothing adds insult to injury like being given the run-around, forced to relive and restate a complaint at every touchpoint. It is imperative that the first person a customer speaks with takes ownership of their concern and be empowered to make it right. Service recovery cannot be allowed to fail.

I have found htat with the proper education and guidance, Associates spent less money to make custoemr shappy than when managers got involved.

The more brands train #agents, the more they can trust + empower them to act authentically in the name of a great CX, whatever the cost. Onus is on leaders to start that process early and check in often.

This can be tricky. I've been in a few CFO conversations where we realized we were giving the farm away. Hard to keep a contact center leadership role if the CFO isn't happy with you!

What quality of agents did you hire? Do you trust the people you hired? If you hired as cheaply as possible, this is probably a bad idea.

Taking Account

If you aren't tracking what you're giving away, you could be giving too much. Moreover, you might be overlooking valuable opportunities to identify and resolve the root cause of problems, which is the best gift you can give your customers. While keeping a pulse on recovery expenses is essential, leaders must be careful about broaching the topic with their employees to avoid unintended consequences.

Yes, definitely important to track. Financial reasons, of course but also for trend management. If agents are giving away $$ for a certain issue on a regular basis, it might mean there are system wide opportunities for improvement.

MUST track to measure the bottom line contribution and LTV and to track the bad actors (agents and customers) from the good. Helps avoid fraud ad abuse by both.

We have to keep track of how much we’re compensating for a multitude of reasons, but I’d stay away from setting KPI targets based on credits issued. Use the reporting to identify outliers (too much, too little), analyze the behaviors, and coach as necessary.

Making Customers Happy

Gifts are great, but they're not a solution to every problem. Compensating customers without resolving the reason for their dissatisfaction will only lead to greater frustration. It is also crucial for us to give customers things that provide value to them. Issuing a standard credit isn't special or sincere, and customers may interpret this as dismissing their problem. When it comes to making things right, it's not all about the money, but it can be a valuable tool in our recovery kit.

Giving compensation is like doing first aid. It’s not the cure. It’s to ensure the situation doesn’t worsen by the time a more permanent cure is made possible!

I'll just say that it's no fun to apologize and compensate a customer one week and then try to do it again the next week when nothing changed. Fixing root causes is absolutely essential.

It is important to check if what you are giving away is considered valuable to the customer. Else, you still pay the price but they don't get value. The same customer can consider different things valuable at different times. face vs perceived value.

#ICMIchat September 1, 2020
Show Me You Care: Listening and Appreciating Your Employees

Show Me You Care: Listening and Appreciating Employees

Q1: Is it important for employees to feel heard and understood by their employer?

Q2: Who is primarily responsible for listening to employees and taking action based on their needs, e.g. front-line supervisors, HR departments, executives?

Q3: How can employers help employees feel understood, demonstrate their listening?

Q4: What are the consequences for organizations if employees do not feel understood?

Q5: When it comes to employee appreciation, is a paycheck enough? Is it necessary for employers to do more?

Q6: Can employee recognition or rewards ever go wrong? How? What should be avoided?

Q7: Do meaningful rewards have to be expensive? Are there free ways to recognize employees?

Q8: What are some creative ways to recognize, reward, and celebrate remote employees?

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