Business Week-Why it Pays to Aplogize

What's the best way for a company to disarm a disgruntled customer? A simple apology beats a cash rebate, according to a new study.

Researchers at Britain's Nottingham School of Economics worked with a large German wholesaler that sells goods on eBay (EBAY), tracking the lukewarm or negative comments posted on the site by the company's customers over six months.

They then responded to the 632 complaints—about defective salt shakers, say, or the late delivery of a leather belt. Half of the e-mailed responses offered a brief apology. Half offered instead a "goodwill gesture" of a small cash rebate (from $3 to $8). All the e-mails asked the customers to remove the comments they had posted online. For those offered the rebate, it was a condition of receiving the cash.

The result? About 45% of customers who received an apology withdrew their so-so or negative ratings, compared with 21% of those offered money to do so.

Johannes Abeler, a Nottingham research fellow and co-author of the study, says it's worth noting that the e-mailed apologies were effective even though they were brief and impersonal—and asked for something in return. His explanation? Despite the suspicions people might harbor, "apologies trigger this biological instinct to forgive that is hard to overcome."

—Douglas MacMillan from Business Week