All brands experience issues. How these brands respond determines the impact those issues have on customer loyalty. The speed, quality, and transparency of the response can turn a frustrating situation into a positive customer experience.
Loyalty360 spoke with supplier members to discuss the importance of responding to negative experiences and learning from other brands’ mistakes and successes when they face issues.
Building Emotional Loyalty Through Negative Experiences
In the world of customer loyalty, negative experiences are not a matter of if, but when. With this expectation, brands have the unique ability to turn that negative experience into a positive, loyalty-building interaction.
Southwest Airlines faced this opportunity during the December 2022 holiday season. The airline cancelled 15,000+ flights due to weather and outdated technology systems, causing mass customer frustration and inconvenience.
“Transparency, Accountability, Proactivity and Tangible Remediation are the key morals to the Southwest holiday story,” says Don Smith, EVP/Chief Consulting Officer for Brierley. “Providing substantive appeasements like miles and vouchers to everyone impacted may result in a clear short-term cost, but the goodwill likely being recouped from these efforts will be amortized over the extended customer lifetime value of most of these fliers.”
For Southwest, the short-term cost came when they provided travel vouchers and ticket reimbursement to help passengers pivot their travel plans at the time of the cancelations. While it could have stopped after covering travelers’ immediate expenses, Southwest also provided every affected traveler 25,000 flier miles — worth over $300 — after the cancelations and technology issues were resolved.
In the moment, Southwest covered its customers’ financial issues: food, shelter, and transportation. Afterward, the airline sought to cover some of the emotional issues its customers faced. While there is no making up for the loss of time the cancelations brought, Southwest provided affected customers the ability to travel again at no extra cost.
Earning goodwill is vital for brands after experiencing an issue because it builds emotional loyalty. In these situations, brands need to meet their customers where they are and seek to understand and mediate their frustration with the situation.
“There will be degrees to which this lever needs to be pulled from a simple apology “we are sorry” message or immediate make good offer to re-establish customer satisfaction,” says Kim Welther, VP, CRM and Loyalty at Baesman. “Not only do you need to take care of the current situation, but you need to go above and beyond to deliver on exceptional service and convenience for your customer.”
Smith adds, “Brands like Southwest that have worked hard to cultivate emotional loyalty with their customers may have earned some amount of ‘forgiveness credits’ for a single bad experience.”
Turning a Negative into a Positive by “Making it Right”
Resolving a frustrating situation relies on immediate action. Waiting for the customer to complain only makes rebuilding the loyalty relationship harder.
“Brands need to act right away to make amends and preempt repercussions,” says Lauren Sutherland, Senior Strategist for ICF Next.
According to Sutherland, preemptive action is the vital component brands need to make things right. She explains with a personal example, “One of the best experiences I’ve had of a brand fixing a mistake is finding a flight voucher in my inbox as soon as I got off a Frontier plane that waited an hour for an available gate. My frustration dissipated immediately.”
This kind of immediate action helps brands turn a negative experience into a positive, loyalty-building interaction. The preemptive response cuts customer frustrations short, and in many cases strengthens the relationship for customers who won’t complain.
Smith says, “Brands that follow a reactive model (i.e., respond only when customers raise complaints for voice concerns) are usually missing a huge audience of silent-but-impacted customers who are not as vocal.”
Front-Line Employees: The Voice of the Customer
For brands, loyalty recovery goes beyond reacting to immediate issues. In order to effectively respond in the moment, customer-facing employees need to be trained and empowered to make decisions and provide discounts, reimbursements, or perks to restore the customer relationship.
“Equipping the customer service team with the right tools to address these customer service issues will be critical to success and giving the customers what they want to by acknowledging their inconvenience,” says Welther.
Brierley, Baesman, and ICF Next all agree that front-line employees are invaluable when it comes to understanding the needs and desires of their customers.
Bindu Gupta, Senior Director at ICF Next says that “brands should have a system in place to gather valuable feedback from their employees as well as involve them in strategic conversations.” She calls this feedback “gold.”
As brands seek to stay preemptive with their response to issues, they can utilize the feedback they receive to determine exactly what part of the situation frustrated the customer.
“For instance, in-store employees can use their devices to add any feedback within a customer’s account,” says Gupta. “Their feedback can help not only personalize the customer experience but also give a platform for employees to speak up.”
Smith adds, “At Brierley, we bring store associates and others into the engagement design process from the beginning.” Adding front-line employees to planning both loyalty and incident response programs allows brands to personalize their responses to address direct frustrations.
Brierley goes a step further, recommending brands enroll employees into their loyalty programs. This gives the employees better insight into the customer experience, allowing employees to advocate for the customer and provide meaningful help.
No matter how a brand chooses to empower its employees, they provide a vital perspective on both the positive and negative customer experiences. As brands seek to learn from Southwest’s response to their holiday cancelations, Brierley, Baesman, and ICF Next all agree that front-line employees should be involved in the process.