Updated: February 9, 2024
Many customer service employees automatically offer free or discounted food, products, or services when something goes wrong.
Didn't like your meal? Here's a free dessert.
Not happy with your car wash? Next one's on us.
Shipment take too long to arrive? Get 20 percent off your next order.
As counterintuitive as it might seem, freebies and discounts can make service recovery worse, not better. Here's why we focus on free, and why that's a problem.
Why do we give freebies to angry customers?
Sometimes, a freebie is an appropriate way to resolve a service failure. Giving a customer a free cup of coffee to apologize for a long delay can be a small token of appreciation.
On the other hand, freebies can easily be overused.
I once worked for a company that managed the parking for a variety of hotels. The hotels’ front desk employees would give away free parking whenever a hotel guest experienced the slightest issue.
Room dirty? Here's free parking.
Swimming pool too crowded? Parking's on us.
Breakfast not delicious? We'll pick up the parking tab.
Parking had nothing to do with housekeeping, the swimming pool, or the hotel restaurant. But front desk employees knew free parking would hit the parking company's budget, not theirs. And it would usually make the guest go away.
Getting the guest to go away was the real reason for free parking.
Unfortunately, a lot of important things get neglected when a freebie is used to get an angry guest to calm down, stop complaining, and go away:
We don't listen enough to the customer's problem.
The root cause of the issue doesn't get investigated.
Steps aren't taken to ensure the issue doesn't happen again.
Using freebies and discounts to get customers to go away is completely missing the point.
It’s also not effective. A 2023 study conducted by Ilona E. De Hooge and Laura M. Straeter found that gifts lose value when offered as part of an apology.
In one experiment, the researchers found that 44 percent fewer people accepted a gift when it was offered as an apology for an error rather than a token of appreciation.
Your goal should be to get upset customers to go away. Service recovery should be about getting the customer to come back. To do that, you need to focus on rebuilding trust.
Why trust is essential to service recovery
There's a scene in one of my LinkedIn Learning courses where a coffee shop customer gets unreasonably angry because her vanilla latte doesn't have enough vanilla.
The scene is actually shown twice.
In the first version, the barista does everything wrong and makes the customer even angrier. You get the feeling the customer won't be coming back because she doesn’t trust the coffee shop will get it right the next time.
In the second version, the barista soothes the customer's angry emotions, but he also does something else that's equally important. He starts rebuilding trust with the customer by convincing her the coffee shop will make her next vanilla latte just the way she likes it.
She’s far more likely to return after this encounter than in the first scene.
Check out both versions of the scene for yourself.
Version 1: advance to :49
Version 2: advance to 2:27
How to rebuild trust with angry customers
It's important to defuse a customer's anger before jumping to solutions. In the coffee shop scene, the barista did a few things to de-escalate the customer's anger.
He started with a service mindset.
He caught his fight or flight response from taking over.
He used the LAURA technique to empathize with the customer.
(You can find an explanation of all those techniques here.)
Listening is important part of defusing an angry customer. Part of that listening should focus on identifying the problem the customer is trying to solve.
The coffee shop customer wanted a latte with a lot of vanilla, and she initially felt slighted that her drink wasn't made the way she liked it. The customer even mentioned a competitor, signaling her intent to take her business somewhere else.
How did the barista fix this?
He sought to rebuild trust by working with the customer to make a vanilla latte exactly the way she liked it. Go back to the scene at 2:52 in the video and you'll see the barista proposing a taste test to make sure the latte tastes just right.
Conclusion
Freebies or discounts are sometimes helpful service recovery tools, but not always.
Notice that the barista focused on solving the customer’s problem, not giving away a free drink. The customer keeping the original drink was incidental, since the barista would have thrown it out anyway.
Check your own motivations before offering a freebie. Are you trying to get the customer to go away, or is this part of an effort to restore trust and earn the customer's future business?
Retain more customers
The Guaranteed Customer Experience shows you how to earn customer trust.