When can an apology be great marketing? Research has definitely shown when a business says "I'm sorry" and remedies the situation; customer loyalty jumps anywhere from 30% to 50%. Those customers will tell all of their friends; the best word-of-mouth advertising a retailer can earn.

The customer is more interested in how the retailer deals with the problems that arise from time to time than how you can make things run smoothly. The former is what you get judged by. So, making an apology, keep the following in mind:

• First, it has to personal; not a form letter or a scripted reply;
• Second, it must be quick, not later than 48 hours after the incident (whatever it is), otherwise the customer feels devalued;
• Third, it must be sincere and come from a person in authority, in the case of an independent furniture and appliance retailer it should be the owner; if not, the store manager or, better yet, his or her boss (there are times when the CEO has to make it);
• Fourth, it should offer reasonable compensation;
• Fifth, it should outline the remedy; so it never happens again; and,
• Finally, it should come from the heart, not the minds of a lawyer.

Domino's Pizza also suffered a public relations catastrophe not long ago when two employees went on tape describing how they contaminated food. The CEO went on camera to apologize; the standard comments were; isolated instances, but it was when he talked about how their actions had "sickened him" that his credibility soared. The lesson he taught all of us was: be personal.

Federal Express had a disaster on their hands when an employee threw a computer monitor over a fence instead of delivering it. FedEx subsequently apologized to the customer directly, replaced the monitor and fired the employee. After airing this apology video, the company scored incredibly high on "trust" with its customers.

As most of us well remember, Maple Leaf Foods had an even bigger problem. Meat products had tested positive for listeria and both sickness and loss of life followed. Michael McCain personally apologized for the situation - he didn't hide behind a vice president of public relations. CEO McCain assumed full responsibility.

Tony Hayward, the CEO of British Petroleum destroyed his own sincerity - and severely damaged his company's reputation - after be heard that he wanted "his life back" after the tragic oil spill in the Gulf of Mexico. The lesson here is also very simple: be very careful who speaks for your company. Even the Queen, according to the movie, had her script "modified".

Innocent Drinks, a beverage maker in the United Kingdom, distributed a coupon with a faulty bar code. They sent out another coupon and asked customers to keep the old one as a memento of their stupidity. Well done.

Tylenol is a case book study on how to apologize effectively. Initially the stock crashed but because of the introduction of tamper-resistant packaging, changing capsules to caplets (solid form) and heavy price promotions, Tylenol regained its market position and is currently one of the most popular analgesics on drug store shelves.

Lawyers will sometimes try to script the apology. They fear an apology could be an admission of guilt. Send them out for coffee while the CEO pens what he/she is going to say. Lawyer speak is fine for contracts; but never for a heartfelt "I'm sorry". The apology that has been crafted by lawyers just doesn't work. The consumer tunes it out and the credibility sinks. Use your own language and be passionate about your company; that works.

Terry O'Reilly, the host of CBC Radio's Under the Influence, has devoted several episodes to this critical business issue. He's worth the listen and I recommend every retailer follow his podcasts.

Alixe MacRae is one of this country's best known merchandisers, having held senior positions at a variety of well-known Canadian retailers including Stoney Creek Furniture, Sears Canada and The Bay. She now owns Concierge Relocation (www.conciergerelocation.com), a company specializing in move management, especially for dramatically downsizing seniors and their overwhelmed children.