Institute For The Future

Apologizing Means Never Having to Spend any Money

Would you rather have an apology by itself or an apology and a bit of cash? If you're like most people, you want the apology, without the money, at least according to researchers from the University of Nottingham. In a new study, they worked with a large e-Bay vendor and tested two different hypotheses on customers who had left neutral or negative feedback for the vendors and found that apologies were vastly preferable.

 

Some customers were offered an apology in return for withdrawing their comments, while others were offered €2.5 or €5.

The simple apology blamed the manufacturer for a delay in delivery, adding: "We are very sorry and want to apologise for this."

Customers offered money were told: "As a goodwill gesture, we can offer you €5 if you would consider withdrawing your evaluation."

Because customers had no idea they were taking part in the experiment, their behaviour was completely natural and unaffected.

Some 45% of participants withdrew their evaluation in light of the apology, while only 23% agreed in return for compensation.

 

Though the study is recent, its finding has been mirrored in other domains. For example, doctors who apologize to patients and/or their families after making major mistakes are less likely to be sued for malpractice. For example, the University of Michigan halved the number of malpractice suits it received and saved $2 million a year on lawyer fees by instituting a policy of encouraging doctors to apologize to patients.

These stories offer a few interesting implications. First, these stories highlight that people can be reasonably understanding and forgiving--even in contexts like medicine, where an error can literally mean life or death for a patient. But the key is to focus on social, rather than financial norms and interactions. Offering a few dollars for a mistake, in the context of the first study, switches a person's thinking to a customer's thinking, while the apology, by itself, just feels like a genuine attempt to ask forgiveness for a mistake.

We've been looking at the numerous companies getting into workplace wellness as experts in behavioral design and change. It's striking, though, that most of these programs really seem to focus on money as the sole motivator--do something healthy, win some money; do something unhealthy, lose some money. But I think this sort of misses the point of looking outside of economics to understand human behavior. As we can see from this research into the power of apologies, we're motivated by all sorts of things that have nothing to do with money.