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When molehills are worse than mountains

Small, persistent customer service failures may pose a bigger threat to customer retention than large, isolated incidents.

A version of this article appeared in the Summer 2021 issue of strategy+business.

Service industry missteps are inevitable, but not all are created equal. For example, if an airline loses a passenger’s luggage or denies a passenger a seat on an overbooked flight, it’s a serious enough problem that the passenger will probably complain, allowing management to apologize or issue a refund. But for smaller errors — if, say, a seat doesn’t recline fully, or a power outlet doesn’t work — passengers might not think it’s worth summoning a flight attendant. As a result, management never gets the chance to register the problem and enhance the airline’s reputation through exemplary customer service.

Over time, the authors of a new study suggest, consumer frustration stemming from what they term microfailures — minor annoyances that tend not to be complained about — builds up, and it has consequences. Consumers can switch providers of services and products without giving the company a chance to redress their grievances, and management is left none the wiser. This makes it crucial for companies to learn how to spot microfailures.

The ominous aspect of microfailures is that they have a slow-burn effect; in a survey the authors used to test their thesis, 56 percent of respondents said they were more likely to shop elsewhere because of a series of small failures than they were because of one large mistake. Consumers may also be vexed by repeated microfailures because it seems as if the company doesn’t care (even though managers may not be aware of the problems). This jibes with psychological research on microstressors — daily hassles that compound and produce more frustration than an isolated incident.

Most previous research has focused on large-scale errors. The authors apply the term macrofailures to situations such as shipments being weeks late, or customers wasting hours on the phone just to get a technician dispatched to fix their internet connection. Microfailures are less drastic situations, such as a restaurant server forgetting to refill the water, or a delivery service failing to include a sauce packet in a food order, or a package taking an extra day to arrive.

Studies show that consumers are reluctant to complain about even big mistakes for a variety of reasons: They may be unclear about the process, unwilling to put in the effort, or fearful of getting employees in trouble. So it stands to reason that they would be even less likely to report microfailures. (The authors note that customers may not agree on what constitutes a small versus a large service mistake, depending on their mood, their personality, their loyalty to the company, and how much they have invested financially and emotionally in the product or service.)

To explore how service failures affect consumer psychology, the authors conducted online surveys with a demographically diverse sample of more than 300 U.S. consumers, who answered questions about large or small problems they experienced. These service errors ranged from getting a slightly smaller rental car than they’d requested (a microfailure) to booking an expensive “four-star” vacation that turned out to be a one-star experience (a macrofailure).

Researchers have identified a wide gap between consumer satisfaction and consumer delight, and the authors’ results suggest a similar spectrum on the negative end of the scale — between slight frustration and deep disappointment. The determining factor seems to be the expectations and experience level of the consumer; for example, a frequent flyer is more likely to notice service errors than someone flying first class for the first time.

Study participants experienced microfailures twice as often as macrofailures, the authors found, but, as expected, they were far less likely to complain about them. Their reasons were familiar: It wasn’t worth the time, it seemed petty, or they didn’t believe companies would care about small mistakes.

That’s part of why microfailures are so difficult to detect. Large mistakes typically involve a refund or some other adjustment that makes it onto an accounting ledger and can be tracked. But if customers don’t report smaller errors, managers have no way of knowing about their dissatisfaction. Indeed, studies suggest many consumers continue to purchase from companies even as their affection for the firm is fading.

If customers don’t report smaller errors, managers have no way of knowing about their dissatisfaction.

Because microfailures are, by their nature, difficult to spot, firms should ensure that customers feel comfortable voicing even small complaints and should be on the lookout for any signs of customer dissatisfaction. For example, they could use customer service campaigns that stress “We’re listening” or “We hear you.” Online feedback is also a good way to solicit feedback about minor missteps. And firms should train staff to be nonjudgmental and probe even minor complaints for more information, especially from loyal customers who seem disproportionately upset.

The authors suggest asking questions such as “Has this happened before?” or “Is this the only issue?” to help determine whether the root of the problem is actually a series of microfailures. Recording all consumer requests that can’t be fulfilled is another way of spotting potential microfailures. Building a database that charts consumers’ attitudes, in addition to their purchases, can give marketers a better sense of whether consumers are accumulating frustration. The authors advise firms to ask for consumer feedback not just about the most recent visit or purchase, but about the past several interactions.

Prevention is the best medicine, and firms should strive to eliminate the underlying causes of microfailures and create ways to reveal any negative patterns that might be developing. But they can also learn tricks to mitigate potential problems. Managers should remember that microfailures are about not quite meeting customer expectations. Perhaps they are setting service expectations too high or could preempt some problems by cutting themselves some slack; for example, giving consumers a deliberately wide delivery range can be a way of pleasantly surprising instead of slightly irritating them when packages arrive sooner rather than later. This “underpromising” is a way to stop small problems from turning into big headaches, even if it might initially seem to be a compromise on service. (Clearly, finding the right balance creates its own challenges.)

Finding microfailures is one thing; fixing them is another. Because the latest small error may be just one in a string of missteps, managers might have to work harder to restore consumers’ faith or compensate them beyond what a simple error would normally entail. But building loyalty or an emotional bond with consumers might mean they will cut firms some slack if small errors pile up.

Source: “How Small Service Failures Drive Customer Defection: Introducing the Concept of Microfailures,” by Sean Sands (Swinburne University of Technology), Colin Campbell (University of San Diego), Lois Shedd (Swinburne University of Technology), Carla Ferraro (Swinburne University of Technology), and Alexis Mavrommatis (ESADE Business School), Business Horizons, July–Aug. 2020, vol. 63, no. 4

Matt Palmquist

Matt Palmquist is a freelance business journalist based in Oakland, Calif.

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