When Apologizing to Customers Hurts More Than It Helps
Technology now lets firms detect service failures and issue instant apologies at scale. But across five studies, including a large field experiment with a food delivery company, researchers found that apologizing when customers are unaware of a failure can backfire—reducing satisfaction, trust, recommendations, repeat purchases, and revenue. The research finds that this is because apologies increase customers' awareness that something went wrong and label it as a “failure,” often overshadowing any warmth or honesty they signal. By contrast, when customers already recognize a problem or complain, apologies help. Leaders must design policies that consider timing, customer awareness, complaints, and legal or ethical obligations in order to maintain customer satisfaction and loyalty.
