October 15, 2009
The Power of an Apology
Posted by Lisa Fairfax

The latest edition of Business Week has a story called"Why it Pays to Apologize" with some interesting nuggets about the power of apology.  According to the story, researchers at Britain's Nottingham School of Economics tracked over 600 lukewarm or negative complaints posted by customers on the site of a German wholesaler that sold goods on ebay.  For half of the complaints, the company offered a brief apology and asked the customer to remove the complaints.  For the other half, the company offered a small cash rebate in return for removal of the complaints.   About 45% of customers who received an apology removed their complaints, while only 21% of those who were offered money did so.  Interestingly, customers responded to the apology even though it was brief, impersonal, and requested them to take some positive action on behalf of the company.  The story appears to have lessons for companies, not only indicating that people respond positively to apologies, but also suggesting that, in some instances, apologies can be more effective than monetary rewards.  In other words, profit may be an insufficient motivator in some context.  By contrast, because it likely triggers an instinctive desire to forgive, an apology (even if impersonal) may be more effective and thus have a better impact on a company's bottom line.  Of course, sometimes sorry is not enough.  Yet the story suggest that there may be many situations where companies would benefit by making it a policy to simply say they are sorry.

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