When Mistakes Happen
Mistakes are a part of the learning process. Every company will experience them at one time or another. Ideally, with good planning, they will be minor and won't happen often. With better planning, there is an action plan in place to quickly right the wrong. Knowing what to do before it needs to be done simplifies fixing the problem.
Handling mistakes well is a great loyalty builder. You can measure the effect by conducting a comparative analysis. Pull two segments to compare from customers who made their first purchase five years ago. Choose customers who are very similar in order source, size and selection. Select people who had seemingly perfect orders for the first segment. "Perfect orders" describe orders that are processed quickly and delivered without issues. Place people who had problems quickly resolved for the second segment.
Detail sales history, average order and returns for each segment. Use the information to compare the value of the customers who had problems with the ones who didn't. This analysis almost always finds that the people who had problems quickly resolved are much more valuable than those who had a perfect order. I believe there is a simple explanation for this: People who have problems resolved to their satisfaction trust the company more. Trust and loyalty go hand in hand.
Planning for failure seems counterintuitive, but it is the best way to be prepared. The first part of the action plan is determining the extent of the problem. Will an apology suffice, or does something need correcting? Apologies are sufficient when the mistake is simple and doesn't overly inconvenience the person or create an expense.
My Coke Rewards provides us with a good example of a mistake where an apology is enough. Last month, the automated points' expiration notice malfunctioned. Members received a notification that they needed to add or use points or they would expire. The deadline for keeping the account active was two weeks before the email was sent. The apology came quickly and followed best practices (refer to the image in the media player):
- Be direct with the apology and explanation.
- Tell people what they need to do (if anything).
- Thank them for their business.
- If necessary, offer a reward for the inconvenience. (If you offer a reward in the form of a discount, make it dollars off with no minimum. This is a payment for a mistake, not a marketing promotion.)
The email from My Coke Rewards was simple, to the point and didn't offer compensation. The mistake was minor, so an apology after the correction was enough. Bigger mistakes require more. There isn't a magic formula that determines the ideal response for every problem. Customers are individuals with unique expectations.