Financial compensation: Handwritten messages & banknotes are better received
Money is money: so why should we care how it is given? A new study on complaint handling, recently published in the renowned Journal of Service Research, delivers fresh insights: People who complain react differently, depending on how the financial compensation is presented.
Holger Roschk (Service Management Unit at the AAU) and Katja Gelbrich (Catholic University of Eichstätt-Ingolstadt) conducted two studies as part of their investigation: In one, 283 German consumers were confronted with a complaint and compensation scenario in a restaurant, while the second involved 376 German consumers, who were presented with a scenario set in a hotel, in which the guests were kept waiting for a long while, following which a credit note was added to their bill.
The results show that the way the money is handed over matters a lot: If the financial compensation is accompanied by a handwritten note from the service person, customers perceive this gesture as more authentic and more satisfying. Consequently, Holger Roschk recommends: “Adding a note such as ‘As compensation! Yours, Anna’ including, for instance, a self-illustrated butterfly, is received far better by the customer.” And that is not all: A handwritten personal message also increases the customers’ willingness to reward the good deed with a good deed of their own. The consumers observed in this experimental setting were willing to increase the tip they left by 28% in the restaurant, or to avail themselves of additional chargeable services from hotels (such as renting a bike or purchasing products from the hotel’s in-house range of cosmetics).
Furthermore, the team of researchers was able to determine that handing over a banknote produces better effects than presenting a credit note. Holger Roschk offers the following explanation: “A banknote is more concrete, it can be felt and touched by the consumer. This produces a stronger emotional appeal.” The results reveal that – provided the financial compensation is issued as a banknote or as a credit note designed to resemble a banknote – more generous tipping or additional spending in hotels are the likely result.
Roschk, H. & Gelbrich, K. (2017). Compensation Revisited: A Social Resource Theory Perspective on Offering a Monetary Resource after a Service Failure. Journal of Service Research, http://journals.sagepub.com/doi/full/10.1177/1094670517716333.
