Trust is at the basis of every great relationship. It’s also vital to the survival of your business. But customers can lose faith in their favourite brands for a variety of reasons. When disaster strikes, how can you recover and ensure your customers regain their trust in you?
“The customer is king” might sound like an old business mantra, but it still holds a lot of truth. Your customers are the key to the success of your business. If they’re not happy with your products and services, chances are, neither will you.
As it turns out, another, often underrated factor plays a huge role: The quality of your customer service. Efficient, courteous customer service is important for customer retention. Numerous studies show that customers end their relationships with companies because of poor customer service.
47 per cent of customers switch companies after a single instance of poor customer service.
Now, you might say: Why should I care about retaining customers? I can just acquire new ones! … Although, to be honest, we trust you know better. Maybe you’ve even read our previous article on responding to negative customer feedback, in which we discussed how the top 20 per cent of your customers are responsible for 80 per cent of your profits.
This makes the financial impact of customer retention evident. In other words; keeping existing customers happy pays off in the long run. People prefer to buy from businesses they know they can trust. If they’re happy with your services or products, they tend to spend more money at your business in the future.
Why do customers lose trust?
“Trust is hard to win and easy to lose”, as the saying goes. As a matter of fact, losing customer trust is much easier than we all would like it to be. Jeffrey P. Bezos, Founder & CEO of Amazon highlighted this fact in a recent statement before the U.S. House of Representatives:
Keep in mind, customer satisfaction and customer trust are interlinked. Quality, price, customer service and experience can and will drive a customer to lose loyalty. Despite your good intentions and all your hard work, many factors contribute to the success or failure of your business and it’s a huge challenge to track them all at all times. The only way to solve the puzzle is to be prepared. You need to factor in the possibility of things going wrong now and then. Or as the famous Roman philosopher Seneca put it; “errare humanum est” – making mistakes is part of being human.
What undermines the trust your customers put in your company?
Here are some of the deal breakers to steer clear of:
- Expectations haven’t been met.
- The product or service wasn’t satisfactory.
- You promised more than you could deliver.
Whilst most problems that arise from poor communication or a single mistake are relatively easy to remedy, others take on gigantic proportions. Sometimes, a mishap can turn into a true PR nightmare.
Remember Samsung’s Galaxy Note 7 debacle from 2016? The company went through an existential crisis due to the global recall of its brand new smartphone. The Galaxy Note 7 had, as many surprised customers found, the tendency to overheat and catch fire. Exploding Samsung phones dominated the news cycles around the globe for weeks.
You’d think such a setback would be impossible to recover from. But when the Galaxy S8 was released in March 2017, it became one of the most popular phones of the year. And so did the Galaxy Note 8.
As you see, it is possible to make a comeback after a major setback. And we’re going to show you how small businesses and major brands tackle it. Let’s get straight to it.
How to Bounce Back And Regain Customer Trust After a Setback
“When we’re criticised for [our] choices, we listen […] When we think our critics are right, we change. When we make mistakes, we apologise.” Jeff Bezos, Founder & CEO Amazon.
1.Understanding the problem
There is, unfortunately, no one-size-fits-all solution for making customers happy or winning back their trust when you messed up. Everybody is different and the only way to make things right is to start by listening to their grievances and understanding what exactly went wrong.
Let the customer speak and know just how much you care about them having a fantastic experience with your company. Empathy goes a long way. It’s the key to building long-lasting customer relationships.
So put yourself in the shoes of your customer, but remember that time is precious. Don’t waste your or their time and stick to asking relevant questions to determine the source of the problem.
2. Apologise sincerely
Acknowledge that something went wrong, but never blame the customer for it, even if they are quite obviously responsible for what happened. Be transparent and own your mistakes from the beginning. Don’t sweep them under the rug, become defensive or refuse to take the blame. That’s the worst thing you can do. In this digital age, the truth will come out sooner or later.
And most important, yet often disregarded: Take the time to craft a proper apology. Since there are many things that can go wrong when you’re faced with angry, upset or disappointed customers, we’ve summarised the essential components of effective apologies in our recent post on responding to negative customer feedback online.
Apologising may seem like such a simple thing to do, but it has the ability to turn around negative customer experiences by 180 degrees. Studies have shown that a genuine apology can increase customer satisfaction by 10 to 15 per cent.
3. Make it up to them
In order to find out how you can make things right, you must ask the right questions. Instead of jumping to conclusions, ask the customer how you can make it up to them. Try to find a compromise if you cannot meet their wishes, but if you can, put your money where your mouth is and offer some form of compensation. This may involve incentives, discounts, free products or more of your time. Whatever it takes.
Don’t drag out your response, prioritise problem-solving and immediately take action. This shows that you value your customer’s time and are willing to go out of your way to show empathy and honest concern.
4. Make sure it doesn’t happen again
You can’t just apologise and forget about it. You need to ensure this doesn’t happen again if you want to increase the chances of turning an existing customer into a repeat customer. Putting new rules in place and developing a solution to the issue moving forward, is a great way to show that you are enforcing change.
This can mean recruiting additional team members or training existing customer service staff, as well as staying back late at the office until the situation is fixed.
5. Reflect on your brand values and ethics
New rules and regulations create a sense of trustworthiness. But the only way to truly minimise the risk of violations is to establish a positive brand culture and professional, ethical guidelines that set the general tone. Remind yourself what your brand is all about. What values and ethics are essential to your brand voice and image? You need to ensure you integrate these into your business operations to win your customer’s trust after a setback.
Rebuilding trust – It’s possible.
Apple’s financial setback and a surprising comeback
Did you know that Apple almost went bankrupt in 1996? It was a major hold-up for a still unseasoned business and one that seemed nearly impossible to recover from. But Steve Jobs stepped in and up, and miraculously managed to revive the company from the dead. He worked to turn the business around with new products and secured USD150 million in investment from Apple’s biggest rival, Microsoft.
According to Business Insider, “Behind the scenes, Jobs was making some big changes for Apple employees, too: Under Jobs, the Apple cafeteria got much better food, and employees were barred from bringing their pets to the campus. He wanted everybody focused on Apple.”
What happened next is history: Apple took 74 days to sell 1 million iPhones after its release in 2007 and is now worth over USD1.5 trillion. When Apple hit the USD1 trillion mark in 2018, it was the first American company in history to do so.
Apple may have been a disaster once, undeserving of the trust of their customers. But one extraordinary person managed to turn it all around. In 2020, Apple’s brand image is stronger than ever, their customer service fantastic and most important: Their high-quality products keep people coming back for more.
Volkswagen’s ‘Dieselgate’ – A Reputational Disaster
In 2015, the German car manufacturer walked away from a near-fatal crash. Volkswagen got unbelievably close to driving the entire company off a cliff. What happened? Nothing less than the biggest scandal in automotive history.
In September of the same year, it was found that Volkswagen had been making systematic efforts to cheat in emission tests. Basically, Volkswagen employees had been using software that made the cars appear to be more environmentally-friendly than they actually were.
Only one year before the scandal had come to the light, VW was the second largest in the automobile industry. Following the scandal, the company had to deal with an overwhelming amount of legal cases which cost them about USD 30 billion in compensation and repair costs to date. Over the weeks that followed the scandal, Volkswagen lost USD16.9 billion of its former market value.
Now you’d think, surely, this kind of scandal must be impossible to recover from.
But here is what happened next. It appears that VW took this crisis as a wake-up call and was ready to undergo radical changes. CEO Matthias Müller said the scandal affected ”the very core of our company and our identity.” Volkswagen, he added, had to undergo “a painful process” if it was to survive.
And so it did. Volkswagen employed three public relations firms to deal with the crisis. The company, ready to move forward and away from Diesel-fueled cars, unveiled its plans for battery-powered cars in 2016. The “New Volkswagen” would be the beginning of a new era. VW’s shares and profits have since largely recovered to pre “Dieselgate” levels. Although the car manufacturer is still fighting lawsuits related to the scandal, the consumers’ readiness to forgive VW appears remarkable.
Associate Professor Nicole Gillespie, an expert in organisational trust at UQ Business School, says the biggest mistake companies can make in times of crisis, is to avoid dealing with the issue. “Organisations often try to cover up what’s happened. However, once a trust failure has occurred, denying it is effectively a second violation which undermines trust further and makes it harder to recover”, explains Gillespie.
Wrapping it up
Each of these tips work alongside each other and play a vital role in rebuilding customer trust after small or major setbacks. When dealing with challenges and attempting to win back disappointed customers, you will need to use a combination of approaches to rebuild trust.
But don’t fret. By monitoring and analysing what your customers are saying about you online, on review platforms and social media, and engaging in the conversation,
you can and will rebuild trust and loyalty.
If you’d like support on your journey, our team of relationship marketing experts is here for you. Get in touch with us. We’d love to guide you through every step of the process.