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Narvar's 2024 State of Returns report is here—get your copy now!
There’s good news about bad news. Mistakes, delays, and returns are inevitable in retail, but handling those situations well can lead to a higher overall lifetime value (LTV) in the customer relationship. Anticipating and addressing a customer’s disappointment can actually improve customer satisfaction (CSAT) and Net Promoter Scores (NPS).
Shoppers are hyper-engaged during the post-purchase period, and 98% agree that they feel better about a company if it notifies them about bad news ASAP. With 96% of consumers planning to adopt cost-saving measures over the next six months—and customer acquisition costs continuing to surge—it’s more important than ever that retailers take steps to keep customers coming back.
In this article, you’ll learn how to deliver bad news to shoppers in a way that actually improves customer loyalty.
The phenomenon of a retailer dazzling its way out of a negative situation is called the Service Recovery Paradox (SRP). Simply put, when a company pulls out all the stops to solve a customer problem, that customer ultimately feels better about the brand than if there hadn’t been an issue in the first place.
For retailers, understanding this behavior is more than a reminder to resolve a customer’s problem quickly and easily; it also underscores the importance of engaging and communicating openly and transparently with consumers throughout a purchase or return journey.
Customers want to hear from brands, particularly regarding tracking and delivery of an order. A Narvar benchmark report found customers who requested additional SMS or Facebook Messenger alerts about shipping and delivery ultimately rated their brand experience 18% higher than those getting fewer pings.
The opportunity—and the challenge—for brands is twofold: First, set realistic consumer expectations. Then, manage those expectations efficiently and honestly.
A shipping or delivery problem could be a slight delay due to weather or a failed delivery attempt, or it might be a more serious issue—like an order that’s been damaged or canceled.
Consumers know these issues are rarely a retailer’s fault, but they still attribute the negative experience back to the brand itself. When things veer off-course, it’s critical for brands to remember the SRP: That’s exactly when brands should reach out with accurate information and real-time notifications to let consumers know something’s gone awry.
The following six elements should be part of your bad news delivery protocol:
Even when everything runs smoothly, automated alerts and notifications are easily-deployed tools that give customers timely updates about their order. If there’s any variance in the delivery process or timeline, it’s imperative that the retailer contacts the customer to address the issue—ideally before the customer discovers the problem on their own.
For items that are merely delayed, branded tracking pages are convenient for relaying updates in the brand voice. The retailer can even sweeten the deal by offering the customer a discount on their next purchase to make up for the inconvenience. For items that are canceled entirely, retailers might consider offering rain check pricing, proposing substitute items, or offering a discount on a future purchase.
The key to maintaining or building a strong relationship is managing expectations with honest, realistic communication.
It’s a mistake to put off breaking bad news to customers or to wait for a complaint.
Approximately 73% of customers will ditch a brand after three or fewer negative service experiences, and 44% will never directly complain before taking their business elsewhere. Older shoppers, like Boomers, want to speak with a representative to resolve an issue, while younger shoppers—particularly Gen Z—prefer the self-service approach that branded tracking pages provide.
A one-time mistake won’t necessarily destroy how a customer views a brand, but poor communication will. When it comes to sharing bad news with shoppers, being early, thorough, and apologetic can bolster the relationship even more than when everything goes according to plan.
