When companies make mistakes - and, inevitably, they will - the first thing they should do is apologize to their customers for any inconveniences it may have caused them. Unfortunately, apologies from senior management don't happen often enough, whether as a result of pride, fear of how it may impact the company's stock price, or simply that it doesn't occur to company leaders to admit when the company has erred. Following outbreaks of foodborne illnesses linked to its restaurants across several U.S. states, Chipotle Mexican Grill represents a good example of a company owning up to its mistakes.In February, the fast food chain shut down all of its nationwide locations in order to provide its employees safety training. Although some critics have labeled this as a publicity stunt, taking the right steps to avoid any future occurrences of foodborne illnesses is just the kind of transparency a company should demonstrate to its customers.
While Chipotle's restaurants were closed, the company offered an apology for the recent outbreaks of E.coli, salmonella, and norovirus by offering free burritos to customers by texting the word 'raincheck' to the company. In December, Chipotle took out a full-page ad in 61 U.S. newspapers apologizing to customers with a letter from founder Steve Ells.
In the letter, Ells stated that he was "deeply sorry" for the incidents which infected more than one hundred people in 14 states. In the letter, Ells offered assurances that the company had undertaken a comprehensive food safety program across its supply chain, beginning with a 'farm to fork' risk assessment of every ingredient and all of its restaurant protocols and procedures.
Ells also made a repentant apology to customers on The Today Show.
To be fair, the free burrito offer isn't simply a remorseful gesture to customers. It's also a shrewd marketing move for getting people back into Chipotle eateries and seeing for themselves that the food is safe to eat.
The company, which reports its quarterly earnings on April 26, is starting to see signs of a recovery. A survey conducted by Cowen & Company during the first week of April found that 41 percent of customers who received a free burrito offer visited Chipotle 3.8 times over the prior 30 days, compared with 1.4 times for the 59 percent who didn't receive a coupon. The poll canvassed more than 1,000 people who had eaten at a Chipotle over the past year.
Customers will forgive customer-centric companies that make mistakes - so long as the company is contrite about its error and is transparent about the steps it's taking to make corrections. We've seen it before, notably with JetBlue's Valentine's Day ice storm debacle where passengers were stranded after roughly 1,000 flights were canceled over five days. JetBlue's then-CEO David G. Neeleman made numerous public appearances apologizing for the company's mistakes and took multiple steps to ensure that such a breakdown in service would never occur again.
And we'll see it with other companies that recognize the importance of asking for customer forgiveness when it's warranted.