Don’t fear losing customers over a well-publicized mistake. Fear losing customers because your CEO wants to make an online video apology.
The real trouble may start there, according to new research.
Not the smartest move
Putting an apologetic CEO in front of the camera, and posting it on YouTube is a really bad idea. In fact, the video apologies can make things worse — not so much for what executives say, but for how they act and look when they speak.
Researchers at the University of California, Berkley, and London Business School found that company stock prices dropped in the wake of online video apologies. And what CEOs said had relatively minor effects on shares, but “inappropriate facial expressions” had big consequences.
People don’t like what they see
Researchers looked at dozens of apology videos from recent years — including memorable (and painful) shots from Netflix CEO Reed Hastings, BP CEO Tony Hayward and JetBlue CEO David Neeleman. Facial coding experts analyzed the videos with the sound off to identify looks of happiness, sadness and disgust.
Executives who showed happiness and disgust were punished with negative stock returns. Turns out, smiles don’t correlate with apologies, and disgust shows no remorse.
Better ways to respond
The good news: There are ways you can apologize to customers after a screw-up that will lead them to forgive and forget — and even stay loyal customers. Try these tactics the next time an error happens:
- Avoid scripts. The reason many CEOs screw up apologies is because they are coached to read a crafted, politically correct statement. Real apologies come from the heart, not a teleprompter.
- Be swift. The sooner someone in your organization admits the mistake, the better.
- Put a name on it. It’s a good idea for the apology to come from the top. If not from there, it must come with a name, never a corporate signature such as “XYZ Public Relations,” “The Office of the President” or “Our Service Team.”
- Acknowledge the impact. Let customers know that you see exactly how the situation has affected their lives.
- Move forward. Once the situation is acknowledged and an apology is made, explain exactly what’s being done to correct it and what customers need to do (if anything).
- Give customers options. Some customers may still want to vent. Tell them who they can contact immediately and what can be done.
