Saying Sorry

I read an interesting article in The New York Times recently about how Southwest Airlines employs one person whose sole purpose is to write apologies to customers for various problems that occur on flights. Of course anyone that has traveled a fair bit probably has some sort of airline horror story to tell. Experienced travelers share those like war stories. But some of those stories have a happy ending if the carrier takes the time to explain the problem and to make things right with the customer.

So what can you learn from this example? I’ve heard various numbers around word of mouth advertising but one truism seem to be that people share their negative experiences far more than they share their positive ones. So how can you be sure to keep your small business reputation untarnished? The truth is you may not be able to do so 100% but you can mitigate the damage.

Here are some tips:

• Try to make things right with the customer: An apology or even an explanation may go a long way to resolving a problem if you explain things calmly and clearly. Saying sorry doesn’t mean you need to give a full refund if something goes wrong.
• Take the long view rather than one off (when possible): Try to consider the overall value of a customer to you. If you provide some form of refund, will this customer likely come back to buy again? If so, then losing some part of your profit from this one order may be a strategic move to secure a long-term customer. This may not be the case for stores that are a one-time purchase. There may be cases though when the value of an order is not worth accommodating a customer—use your best judgment in those cases.
• Know the value of a customer: Is this a repeat customer? Have they placed orders in the past that were profitable? The Order Manager lists order numbers when we are able to tell that a customer has placed orders previously. You can click the order numbers to review a history of those orders. Not all customers provide equal value. Before you refund try to tell if the customer provides value to your business or if they order small quantities of low margin items. While their business may not be worth giving a full refund, you should still offer an apology if you were at fault and try to come to an agreeable resolution.
• Try to learn something with each case: If you need to issue a refund, or even if you lose a customer, the experience can be of value to your business. Examine what went wrong and try to address it. Better a few minutes of fire prevention than hours of fire fighting. Was there confusion around shipping policies or times? If so, add content and make it big and bold so a customer is more likely to see it next time (or at the least you can point it out to them when they call or email). Was an item on back order and could not be shipped right away? Set your product availability status and follow up with customers by phone or email if there will be a delay in shipping.

Losing money on unwarranted refunds is certainly no way to be successful with your business, but your goal should focus on the long-term profitability of your business by building relationships with customers with clear and open communication which will encourage good word of mouth advertising and hopefully repeat buyers.

Paul Boisvert
Yahoo! Small Business