Business Apologies: What You Should (and Shouldn’t) Do

Business Apologies: What You Should (and Shouldn’t) Do

You start your day with a check-in on social media. You spot a negative review on your Facebook page. Do you:

  • Ignore it and hope nobody sees it?
  • Respond?

Spoiler alert: Your answer should be the latter. And it’s not just because 88% of consumers are less likely to purchase from companies that leave complaints unattended.

Apologizing is a human behavior that acknowledges and resolves an issue. In business, it’s more than learned behavior; it’s an essential part of a growth strategy.

That’s especially true for SaaS companies and others who maintain long customer relationships and obsess over churn. Eventually, you’ll make a mistake, but you don’t need to lose a customer over it.

Here’s what to do.

Why should businesses apologize?

For one, apologies display empathy–something experts credit as a force that drives business forward. That could help secure higher business deals and drive company growth.

Roger Dooley explains the connection between the two:

As I describe in Apologies Really DO Work, behavioral economist Dan Ariely conducted a study in which subjects were overpaid a few dollars for performing a simple task.

Almost all returned the extra money.

But, if the experimenter exhibited rude behavior (taking an irrelevant cell phone call in the middle of the experiment), most of the subjects said nothing and kept the money.

Apparently, they were punishing the experimenter for his bad behavior.

Even if you face a legal dispute—or are trying to keep a customer complaint from reaching that threshold—apologies can help.

Jennifer Robbennolt, a Professor of Law and of Psychology at University of Illinois, gauged the reaction of survey respondents when they heard an apology throughout hypothetical injury-settlement cases.

Her report concluded:

The apology fulfills some of the goals that triggered the suit, such as a need for respect, to assign responsibility and to get a sense that what happened won’t happen again. So receiving an apology can reduce financial aspirations and make it possible for parties to enter into discussions about settlement.

From a day-to-day perspective, apologizing to disappointed customers can:

  • Reduce returns.
  • Increase brand reputation.
  • Retain loyal clients.
  • Increase recurring revenue.

Those apologies often have their origins in lesser mistakes.

What should you apologize for?

You’ve heard that “the customer is always right.” Not everyone agrees. Pete Fader, Professor of Marketing at the University of Pennsylvania, shares why in his book Customer Centricity:

Not all customers deserve your company’s best efforts. And despite what the old adage says, the customer is most definitely not always right. Because in the world of customer centricity, there are good customers…and then there is everybody else.

Still, there is a time and place where apologizing is critical: Instances when you’re responsible for poor customer or user experience–something that 55% of customers are willing to pay more for (if the experience is guaranteed).

It’s not always easy to identify instances when your business is at fault compared to times when a customer’s demands are unfair. Still, there are clear-cut cases:

1. Product failure: Most products have errors. Whether it’s a bug, system flaw, or design mistake, it’s your duty to apologize to customers who’ve experienced it.

When Moz’s SEO tool wasn’t working as expected, they penned a public apology on their blog to say sorry for the failures, why they happened, and what they did to fix it:

moz apology

2. Slow delivery times: When it comes to managing ecommerce logistics—coordinating online orders, fulfilment, and shipping—hiccups are inevitable. Here’s the largest ecommerce website on the globe, Amazon, apologizing for delayed shipping:

3. Poor customer service: A report by Forrester revealed that 23% of B2B CMOs view improving customer experience as a top-three objective. That highlights a potential gap between consumer expectations and business execution—which constantly refires the need for an apology.

Here’s ZocDoc apologizing to their customer after an appointment was unexpectedly cancelled. They’ve sent a personalized email with an incentive to continue using their service, and ask for feedback to help prevent future cancellations:

4. Hidden costs: If you purchase something online, you expect the delivery driver to arrive at your door and deliver the item you ordered at the price you paid—no questions asked. Hidden or unexpected costs anger consumers.

Anything from automatic membership renewals to import fees for overseas customers could inspire a negative review tied to your brand—like this dissatisfied Kylie Cosmetics customer:

bad review unexpected costs

5. Low-quality products or services: Consumers are increasingly demanding. That makes it only more likely that your product or service will fail to meet their demands. Those demands extend to the earnestness of the apology, too.

When a United Airlines passenger was “dragged” off a flight, CEO Oscar Munoz initially issued a PR-driven, tick-the-checkbox apology:

united airlines first apology

As public resentment grew, Munoz followed up with another, more candid mea culpa:

united airlines second apology

6. Moral or ethical shortcomings: According to Nielsen’s Global Corporate Sustainability report, 66% of global consumers are willing to spend more on a product if it comes from a “sustainable brand,” a component of which includes a company’s “commitment to social value.”

ConvertKit faced backlash when they announced a planned name change to “Seva.” They didn’t realize the strong religious ties the word had, and customers felt using it as a name was morally wrong. ConvertKit reverted to their original name and penned a lengthy apology to explain the misunderstanding:

Every company will make one—if not more—of those mistakes periodically. So what do you need to do to handle it right the first time?  

How businesses should apologize

Scientific research has identified the key components for any apology:

  1. Expression of regret
  2. Explanation of what went wrong
  3. Acknowledgment of responsibility
  4. Declaration of repentance
  5. Offer of repair
  6. Request for forgiveness

Here’s how to put them into practice for a business apology.

1. Apologize even if it’s not your fault.

Saying sorry is often portrayed as weakness, and, further diminishing the incentive, research has found that refusing to apologize can actually increase self-esteem and feelings of power and control.

Yet swallowing your pride and apologizing—even if you don’t feel responsible—still makes sense. Here’s why:

Apologizing does not always mean that you’re wrong and the other person is right. It just means that you value your relationship more than your ego.

In business, preserving your ego will cost you thousands, if not millions. Take the Volkswagen emissions scandal. When regulators discovered VW cars used illegal machinery to meet emission regulations, the then-CEO of the U.S. VW branch didn’t apologize. Instead, he placed the blame elsewhere:

These events are deeply troubling. I did not think that something like this was possible at Volkswagen Group [. . .] This was a couple of software engineers who put this in for whatever reason [. . .] This was not a corporate decision. There was no board meeting that approved this.

What impression does that give to you? Either the CEO doesn’t have a clue about the team or company he’s managing—or he simply prefers blame someone else. Both are toxic for a brand.

A more likely scenario for business owners is having to apologize for another employee’s mistake. Here’s how one company did it right:

Tylenol is no stranger to this. A batch of dodgy Tylenol pills, suspected of being laced with cyanide, killed seven people in Chicago in 1982. But neither Tylenol nor the manufacturer, Johnson and Johnson, was believed to have made the mistake.

Advertising experts predicted the end of the brand, with one even saying:

There may be an advertising person who thinks he can solve this and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler.

But Johnson and Johnson sent a global, heartfelt apology, and recalled 31 million bottles, offering free replacements (to the value of $100 million) in return.

The result wasn’t as damaging for the brand as advertising experts predicted. The company recovered 70% of its market share within five months and was back up to 90% a year after the incident.

2. Apologize publicly.

Don’t cover mistakes and hope nobody notices.

It’s a misguided strategy many brands have followed—including Samsung, which demanded a YouTube user delete a video he uploaded to prove his Samsung battery had caught fire.

They prevented him from uploading similar material in the future with legal action and never made the settlement public. (Only he did—in a video that generated over a million views in a single week. Classic Streisand Effect.)

Label Insight found that 73% of consumers are willing to pay more to support honest and trustworthy brands, and transparency is a key component. If you’re going through the torment of making an apology, you may get more value out of doing it publicly.

Take KFC, for example. Customers were outraged when their UK restaurants “ran out” of chicken. But instead of covering up the problem, they paid for advertising space on billboards across the country to apologize publicly:

kfc no chicken apology

As James Altucher argued, “Honesty is the fastest way to prevent a mistake from turning into a failure.”

How can you determine when a corporate apology should be made public? Ask yourself whether the issue impacted a large volume of people.

An apology for shipping incorrect products to a single customer, for example, doesn’t warrant a public apology. But a product failure that affects a significant percentage of your customers very well may.

3. Respond in a timely fashion.

Research collected by Altitude Software found that over 80% of customers expect a response to emails and social media posts within 24 hours. Judging by average hold times, those expectations may be even greater for telephone interactions:

  • Disney Store (12 seconds)
  • Urban Outfitters (17 seconds)
  • Nordstrom (21 seconds)

Patience declines further if your customers need a response from you. Just take this complaint sent to Stripe, for example:

Customer service budgets can’t always accommodate consumer demands. A tool like Mention can help identify when (and where) people are talking about you online, increasing your ability to respond rapidly.

4. Explain what went wrong.

According to psychologist Robert M. Gordon, there are three components of an apology:

  1. Acknowledgement
  2. Remorse
  3. Resolution

The simplest way to get those components into your business apology is to explain what went wrong and what you’ve done (or will do) to prevent it from happening again.

Here’s how Airbnb put this into practice when they came under fire for reports of racial profiling and discrimination on their site:

airbnb apology letter

They enlisted the help of a legal professional to review the entire website, highlight issues, and prevent any further discrimination.

5. Offer an incentive.

Repeat customers generate up to 40% of a store’s overall revenue, and retaining them can be up to 20 times cheaper than acquiring new customers. An apology can turn an unhappy customer into a repeat one, or keep a current subscriber from becoming a past one.

At times, it may require an incentive—a reason to give you a second chance. Incentives include:

  • Coupons
  • Discount codes
  • Free products

Ellie Shedden, founder of marketing agency The-Oop, experienced this first-hand. She vacationed to a remote location with no internet, only for her social media scheduling tools to stop working the day she left. Her clients had no content for several days, and understandably, she came back to angry emails.

Her response? This email:

Dear Client,

I have just come across a problem with the scheduling app I use for social media, which means that only one post was shared on your account last week. Sorry for the error – I was on holiday from Wednesday until today to celebrate my birthday so didn’t pick up on it.

To make up for the missed posts I will schedule an extra 4 posts over the next 2 weeks and launch a one day growth campaign across your accounts.

Once again, please accept my apologies for this error.

Shedden says being honest and succinct, while offering an extra service, helped rebuild client trust: “I had a great response, with clients even contacting me to thank me for the proactiveness and wish me a happy birthday!”

Brendan Hufford seconds this strategy. When he pre-sold an entire line of jiu jitsu uniforms at $150 a pop, his customers expected a three-month wait for their order.

But during production, Brendan’s designs weren’t coming through clearly, samples were poorly made, and worst of all—his manufacturer went radio silent for two weeks.

In the end, customers waited six months for their order. To apologize for the delay, Brendan sent every person who ordered (whether they asked for a refund or not) a box containing:

  • A personal letter
  • T-shirts
  • Instructional DVDs
  • The current issue of the most popular jiu-jitsu magazine
  • Memberships to the world’s most popular jiu jitsu online training website

He says:

All in, delivering the apology box and the uniform would mean I’d lose money on each order. The best way to say sorry, in my case, was to use all of my revenue and invest it back into the customer.

The easiest way to turn a casual customer into a brand advocate is to over-deliver and some of my greatest evangelists came from that botched order and series of unfortunate events.

6. Remember: It’s not just what you say; it’s how you say it.

How you deliver your apology is just as (if not, more) important than the apology itself. Research published by the Journal of Management concluded:

The slope of the relationship between apology condition and willingness to reconcile increased as sincerity increased, meaning that apologies carry even more weight relative to no apologies when they are perceived to be sincere.

In simple terms: The more sincere your apology seems, the more likely it is to be accepted.

But sincerity isn’t a checkbox; it forms the foundation of a corporate apology. An academic study on the human response to messaging found that the tone of voice accounts for 38% of how much we “like” a message, and facial expressions account for 55%.

Small shifts with body language—eye contact, hand gestures, facial expressions, and other body movements—play a huge role in the acceptance of your apology.

Consider this apology from Whole Foods’ CEOs. They look sincere with their eye contact and body language, making the apology more convincing:

Apply the same concept when delivering offline apologies. Whether you’re sending an email or writing a script for an upcoming call with a disgruntled customer, remove instances of “if” or “but,” which can ruin an entire apology.

Which of these apologies seems more sincere?

  • I’m sincerely sorry for this error, which was due to one of our administrative team entering the wrong code into our CMS.
  • I’m sincerely sorry for this error, but it happened because our administrative team entered the wrong code into our CMS.

I’ll bet it was the first option. It sounds more sincere because it explains why the problem happened. The second almost sounds like an excuse.

Conclusion

Piecing together a convincing business apology is tough. But to turn unhappy customers into repeat, long-term fans, you’ll need to own-up to your mistakes and pen a sincere apology.

The exact script you should create depends on the situation you’re apologizing for: An apology for delivering incorrect products will be totally different to an apology for a morally questionable advertisement.

But the six steps outlined in this post will help you create one that keeps your growth goals on track:

  1. Apologize even if it’s not your fault.
  2. Apologize publicly.
  3. Respond in a timely fashion.
  4. Explain what went wrong.
  5. Offer an incentive.
  6. Remember: It’s not just what you say; it’s how you say it.

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  1. Great tips here for business owners and marketing managers. I see too many businesses ignoring all reviews, positive or negative. The stat “88% of consumers are less likely to purchase from companies that leave complaints unattended.” is very telling. As a consumer myself, If I see brands not responding I’m initially turned off to them.

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Business Apologies: What You Should (and Shouldn’t) Do