To forgive
…Service failure, social capital, and customer forgiveness
By J. N. Halm
Anyone who has walked even just a few days on God’s green earth will know that things do not always go according to plan. Even the best of plans fail occasionally. It is just the way things are. And when things go down south, the natural tendency is to find what caused the problem to begin the process of looking for a solution.
Indeed, causes of problems could simply grouped into two broad categories. There are those causes that are termed as an act of God, or those not the fault of anybody directly. They just happen because things like that happen occasionally. These are problems caused by no direct human action for which individual persons are not responsible.
Then there are those problems that are caused by people, deliberately or unintentionally. Humans are fallible by nature and so either by commission or omission, they make mistakes. These mistakes can sometimes lead to serious consequences.
In the world of business, mistakes caused by service professionals could lead to loss of business. When things do not go as expected, customers can, and do, take their business elsewhere. When things do not go according to plan, the relationship between the business and the customer is put to the test. In those situations, the only thing that can save the relationship is the customer deciding to forgive the business.
Indeed, Customer Forgiveness is a big deal. It is common knowledge that a business is only as valuable as its returning customers. One-off deals are very important but they are not as important as the business of the customers who return again and again. It has been found that customers who are satisfied with the quality of service they receive tend to exhibit traits. They are the customers who buy more. They buy more often. They bring others with them. They are even known to go out of their way to tell others about the brand.
If it is true that things go wrong occasionally, then it stands to reason that the returning customer is the forgiving customer. There are instances when customers who feel wronged have been known to go all out to complain and express their dissatisfaction. There are however those customers who go beyond just complaining to attempting to seek revenge.
For some offended customers, the idea of revenge is to go out to badmouth the “offending” business. Spreading negative word-of-mouth is their way of getting back at the business. It is therefore important that every business does everything in its power to ensure that its cherished customers always have a forgiving stance towards the business.
It has been found that one of the best means by which businesses can ensure that their customers continue to be forgiving is the quality of the relationship between the customer and employees. A study published in the May 2019 edition of the Asia Pacific Journal of Marketing and Logistics sought to determine the relationship between customer forgiveness and customer relations. The researchers surveyed customers of the Top 5 private banks in Pakistan who own almost 48 percent of the whole banking industry in Pakistan. To ensure that the findings were as close to reality as possible, the researchers screened for only customers who faced service failure within the previous year and reported to the bank.
The study sought to find out whether social capital, i.e. the value embedded in the relationship between service firm employees and customer relations, has an effect on customer forgiveness in service recovery. In other words, when things go wrong, do customers consider their relationship with the business to forgive for the wrong? The title of that study is “Do Service Firm Employee and Customer Relations Matter for Customer Forgiveness in Service Recovery?”
The findings of the study showed that when a business has built up enough social capital with its customers, those customers tend to be more forgiving of the business when things go wrong. The more forgiving customers were, the less they tended to spread negative word of mouth. Customer forgiveness was also found to positively affect the re-patronage intentions of customers.
The study discussed social capital from three different perspectives. The first of these three is Structural Social Capital. This refers to the network of people an individual knows and upon whom one can draw for benefits such as information and assistance. It is known that when customers have structural social capital, they can get favours from the business. The customers then reciprocate by being a lot more forgiving of the business when things go wrong.
Another facet of social capital relates to the characteristics and qualities of personal relationships such as trust, obligations, respect, and even friendship. This is referred to as Relational Social Capital. In this sense, the closer customers are to employees of the organisation, the easier it is for there to be forgiveness by customers when things go wrong.
The third component of social capital is Cognitive Social Capital. This is the shared language and codes that provide the foundation for communication. When employees and customers share similar values and ideas, they tend to have closer bonds. This can lead to customers being more forgiving.
All of these three aspects of social capital were found to be very instrumental in making customers more forgiving of businesses. In turn, when customers are more forgiving, it also affects two very important aspects of customer experience. These are the re-patronage intentions of customers and also the spread of negative word of mouth.
Repatronage intentions refer to the willingness of customers to offer an organisation another chance, after a service failure. It is about whether the customer has forgiven the business enough to want to come back to make another purchase. It has been argued by some that refusal to return is the clearest proof that a customer has not truly forgiven a business.
Negative word of mouth being spread about a business is a natural reaction to a service failure. When things do not go according to plan, the natural tendency is for customers to complain. When aggrieved customers have had enough and they do not see any way forward, there is that possibility of them going about spreading the word about their negative experience. It is therefore expected that when customers truly forgive the business, they will not go about spreading negative word of mouth.
The ongoing discussions call for businesses to train customer-handling employees to improve their relationship-building skills. The Good Book says that it is those who are friendly that tend to have friends. By developing close friendships with their customers, customer service employees would end up acquiring the social capital needed for the relationship to survive during a service failure.
It has also been advised that businesses should be clear on the segments of customers they intend to serve. The idea is to ensure that a business invests in getting its customer relationship officers and managers to get close to those customers.
If you intend to sell to customers who happen to be golfers in a certain golf club, then it makes business sense to get those in charge of those relationships to join that golf club. This is a good way to acquire the social capital needed to help the business navigate the stormy waters after a service failure.
Businesses can even go one step further by recruiting customer service employees from those very segments. If the business intends to sell to a group of skaters, it would be most strategic to employ relationship officers who also happen to belong to that segment.
Even if the relationship manager is not a member of that segment of customers, the manager can still acquire important social capital by socialising with those customers beyond business hours.
If the target customers happen to be fitness buffs, then the customer service representative must join the fitness club of those customers or get a membership to the gym that those customers patronise. In short, businesses must be intentional in ensuring that they acquire the necessary social capital needed to survive service failures.
The ongoing discussion shows that customer forgiveness can be a very important competitive asset. A business that has customers who would easily forgive it when things go wrong stands a better chance of surviving and thriving on the market than a business that does not have this advantage. Clearly, customer forgiveness does not just happen.
It is as a result of social capital that the business must have built up over the years. In other words, businesses that have suffered severe customer attrition, and its attendant consequences, may be those that have not been building up social capital with their customers.
Interestingly, businesses invest so much in many aspects of their operations to ensure that their products and services are top-notch. Some of these businesses assume that to get ahead of the competition, they must invest in advanced technologies, sophisticated machinery, and the latest in business strategies.
Important as all these investments might be, this discussion makes it clear that sometimes, the one thing that might derail the progress of the business is a lack of enough social capital with customers. That would lead to the rise of more unforgiving customers—and the one thing any business would want is for its customers to be more forgiving.
