How to placate the disgruntled

Sometimes less is more when it comes to placating disgruntled customers, maintain Tulane University researchers in the A.B. Freeman School of Business, New Orleans, and it all depends on whether the customer is an optimist or pessimist.

According to Harish Sujan, professor of marketing, retailers often assume that "more is better" when it comes to appeasing unhappy customers. For example, it is thought that offering a replacement rather than a fix of a defective product is a wise business practice, as is adding a gift to compensation for a shirt ruined in dry cleaning.

However, sometimes more can be worse, Sujan indicates, especially if the customer is an optimist. In a study where a hotel failed to give the customer the type of room requested, being offered a free night's stay seemed an overly generous resolution to some customers, triggering their suspicions of the marketers intentions. "A 50% discount on one night's stay was considered a more fair offer, and elicited more loyalty," Sujan reports.

A key point of Sujan's research is that both optimistic and pessimistic customers' responses can be manipulated--and unless the retailer knows in advance the customer's personality, how to appease him or her will remain an unknown. It is a gamble for the retailer: a gift enables pessimistic customers to respond as positively as optimistic customers do naturally to a good offer. Yet, a gift also enables optimistic customers to respond as negatively as pessimistic customers do naturally to a poor offer.

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