When you sprint to an airport gate to make a connection after a delayed flight, only to find that the plane hasn't waited for you, do you want a) the gate agent to offer a sincere apology, b) the airline to admit it made a mistake and provide you alternative ways to reach your destination, or c) a $200 travel voucher for your trouble?
Customers typically fall into these three general categories (dubbed relational, oppositional, and utilitarian). And companies may want to start thinking of them that way, according to a new paper published in the Journal of Marketing. Customers tend to have different reactions to negative experiences, the researchers say, so that treating them as homogenous is probably not the way to win them over.
I asked Torsten Ringberg, assistant professor at the University of Wisconsin-Milwaukee and one of the paper's authors, to answer a few questions about customer types. (Ringberg coauthored the paper with Gaby Odekerken-Schroder, associate professor at Maastricht University in the Netherlands, and Glenn Christensen, assistant professor at Brigham Young University.)
Does your research suggest that companies should treat different types of customers differently?
It suggests that companies should treat consumers the way customers prefer to be treated. If companies differentiate between consumer preferences, then consumers should feel better treated. How can companies tell which customers fall into which category?
We introduce some basic diagnostics to identify consumer preferences in our article. For example, relationally oriented consumers often express hurt and vulnerability. They may look for consolation, and they often show understanding and sympathy for the provider. They are willing to work it out. In contrast, the oppositional consumer is antagonistic, blames the provider, and is even aggressive and often overly demanding.
The utilitarian consumer is much more balanced, nonemotional, rational, and will evaluate the situation from a pragmatic point of view. They will often ask for compensation for time wasted and discomfort caused by the failure.
These diagnostics are not that different from what salespeople have been trained to look for when identifying consumer preferences during a sale. We simply apply them to the recovery situation.
Would that be fair—for example, wouldn't the utilitarian customers receive money and other forms of compensation for frustrations like a delayed flight, while relational customers might just get an apology?
Well, one type of compensation does not exclude other ones. What differs is the emphasis a marketer has on one or the other recovery activities. For example, a utilitarian customer is likely to prefer financial compensation (with no ties to the company), whereas the relational one prefers and accepts compensation that is tied to future interaction with the company, such as coupons for future flights and or frequent-flier miles. When the service failure includes mass transportation, such as the airline industry, [which] is governed by strong regulatory oversight, the best way [may be to make all] options available to affected passengers and let them choose. However, if we think of more unique instances that involve one-on-one interaction with consumers, marketers may benefit from tuning their recovery actively in to the consumer's preference. For example, if we think of a dealership where you recently bought a new car and this car breaks down after three months, the way the dealership approaches you will make or break future deals with you. The dealership needs to figure out what type of customer you are, then respond by focusing on what is most important to you.
This does not mean that the relational customer will be happy with an apology only. But it is likely that an apology and personal care-taking will go a long way to ensure that this customer is happy. In contrast, a utilitarian customer will not place very much emphasis on verbal and relational interaction but will be focused on a compensation that will offset his or her inconvenience, such as being compensated for wasted time and having access to a free car from the dealer.
The Facebook chief executive recently apologized for a program that announced users' recent purchases. Does your research suggest that his apology will appeal only to a certain type of consumer?
I am not fully aware of the full story, but it seems from the face of it that an apology may be viewed as superficial (and insufficient) by utilitarian individuals and as a potential cover-up by oppositional individuals. What kind of customer are you?
I am a strong utilitarian consumer. I see the marketplace as a transaction-based place where marketers and consumers are governed by implicit and explicit contractual agreements. The marketer is in it to make money (otherwise they wouldn't survive), and I am in it to get products and services that satisfy my needs (otherwise I wouldn't buy). How do you prefer to be treated after a bad experience with a company? Share your perspective in the comments below.