Customers react very differently to different compensation offers. The acceptance of compensation depends above all on the type of mistake you have made in service or sales. Which type of compensation suits which type of faux pas?
Of course, it also depends on the character of the customer you have not treated properly. Some have a very quick temper, while others remain calm and friendly. However, studies show that the type of compensation also has a decisive influence on the future satisfaction and loyalty of an aggrieved customer.
No matter how you want to compensate your customer in individual cases, it is important, approach the customer proactivelyto achieve the best result in restoring customer satisfaction.
Possible types of compensation
In principle, monetary compensation can be made immediately by repaying the customer an appropriate portion of their money straight away. Vouchers or credit notes, on the other hand, offer the possibility of monetary compensation with a time delay. The goods can also be exchanged or the corresponding service can be provided again. Sometimes an apology for misconduct is also sufficient.
Which compensation strategy should be used when?
The success of any compensation strategy depends crucially on the type of error you want to compensate for.
Theoretically, of course, you can combine any type of error with any compensation strategy. For example, you could simply dismiss it with an apology if you have delivered a faulty machine. But this approach would of course be hard to beat in terms of audacity and you would very quickly find yourself in court with the customer for a second time. You will probably not make any more sales with this customer in the future. He will probably also tell others about your business practices.
Another article has already explained how you can best involve the customer in Compensation negotiations so as not to give him the feeling that he no longer has any control over the interaction with you.
Related compensation works best
The research comes to a clear conclusion: you will achieve the best result in terms of customer satisfaction and loyalty if you compensate for errors in a similar way. So if you have overcharged, refund the delta immediately. If the customer justifiably complains about the performance of maintenance, simply send out another technician and provide the service a second time. If, on the other hand, you have delivered a faulty machine, you will have to replace it if rectification is not possible.
Social errors can be compensated for in different ways
The only exception here are complaints that are associated with interpersonal errors towards the customer. This can include, for example, ignoring or rudeness. An apology does have a positive effect here. However, the customer responds just as well to other measures. Nevertheless, you can often simply leave it at an apology, as this is the more cost-effective alternative.
Monetary compensation must be paid promptly
Monetary compensation should be sent to the customer very promptly and preferably paid out directly. If you give them a voucher for a service to be provided at a later date - such as maintenance - this can even have a negative effect.
So we see that the biblical commandment of an eye for an eye and a tooth for a tooth applies to compensation strategies. So repay like with like. Also make sure that monetary compensation is paid out directly if possible.
Source: Rosck, H., Gelbrich, K. (2014): "Identifying Appropriate Compensation Types for Service Failures: A Meta-Analytic and Experimental Analysis"; Journal of Service Research, 17(2), pp. 195-211
