Recently, I’ve observed some interesting customer service behavior from Apple and Google that suggests an approach to customer service I would not have thought about on my own. Consider these two cases:
Case #1 - Google Cancels Its Video Download Service
On August 10, I received an email from Google informing me that they decided to cancel their video download service. Since Google’s video download service works by streaming videos to you every time you watch them (unlike Apple’s iTunes store, in which you download videos permanently), canceling the service means the videos I bought will not be playable.
To make up for canceling the service, Google gave me (and everyone else who bought videos) a credit for the cost of the videos that I can use at any Google Checkout store. To me, this seemed okay. I buy a lot of stuff online, so I was pretty sure I could find something I wanted. Even so, I never feel great about the “store credit” approach to refunds.
Lo and behold, on August 21 (11 days later), Google sent me another email saying that they’re sorry for only giving store credit, and they’re now also refunding everyone’s money. This made me very happy! I got $15 to spend online, and I got $15 refunded to my credit card. (And, to be honest, I never watched those videos much anyway.)
Case #2 - Apple Reduces the iPhone Price by $200
Only 2 months after the release of the iPhone, Apple slashed the price of the 8 GB model from $599 to $399, ostensibly to make the phone more appealing for holiday buyers. At the time, Steve Jobs basically just said “too bad” to all the early adopters. The technology world changes quickly, and prices change too. There was an outcry of angry bloggers.
A day later, Apply announced that it would be offering a $100 Apple Store credit to everyone who bought an iPhone before the price drop. Generally, people still aren’t thrilled, but they feel better.
Conclusion
Perhaps the lesson to be drawn from all this is that, in customer service, it’s sometimes better to disappoint, and then over-compensate, than it is to simply satisfy the customer. Satisfactory service is good, but it generally goes unnoticed. In contrast, bad service that gets quickly remedied is very memorable. Honestly, Google did a much better job of this than Apple did. The disappointment (store credit) was more mild and the over-compensation (full refund) was much more satisfying.
But consider what would have happened if Apple announced the $100 rebate at the same time as the price drop. There still would have been an outcry of unfairness, but Apple would have had nothing left to offer. By letting people complain first, and then satisfying them, they were able to squelch most of the bad sentiment.
In college, I had a marketing professor with a background in hotel guest services (I think he worked with Four Seasons). I remember him once explaining that the reason Four Seasons has a great reputation is not necessarily for the service, although it’s good, but for the way they over-compensate when there is a problem. If you do complain about the quality of the room or the service, they have a whole system that springs into place to shower you with special services and treatment intended to overcome any bad impression you might have gotten.
I’m going to try to remember this “disappoint then over-compensate” technique. Seems like it might be useful. I don’t suppose this is already documented somewhere in research on customer service? Anyone know for sure?