We discuss the twelfth principle: the ineffectiveness of offering coupons as a remedy for service failures. We delve into why this common practice often feels insincere and can backfire. Daniele explains that the repetitive use of coupons as a response to service failures diminishes their value and impact. He likens it to apologizing with flowers every time one is late – it loses its meaning and becomes predictable. We discuss how this approach can lead to negative associations, similar to how excessive swearing loses its emphasis. We also explore the unintended consequences of such practices, drawing parallels with a story from “Freakonomics” about a kindergarten that introduced fines for late pickups, which inadvertently increased late pickups as it turned a moral obligation into a transaction. “Freakonomics” by Steven D Levitt & Stephen J. Dubner, published by Penguin Books. The conversation then shifts to the importance of knowing when to use different tools in service recovery. Daniele highlights the Swiss railway system, where discretion is given to frontline workers to handle mistakes, emphasizing the need for a varied toolbox in handling service errors. We also touch on the issue of customers gaming the system, particularly in the context of hotel loyalty points, where complaints can be leveraged for rewards. This leads to a discussion on the importance of not normalizing coupons and understanding the customer’s perspective – a coupon requiring further engagement with the service may not be appealing to a dissatisfied customer. Lastly, we discuss the broader implications of automating responses like coupons, urging businesses to consider the habits and expectations they are creating with such practices. This episode offers a critical look at the overuse of coupons in service recovery and the need for more thoughtful, context-sensitive approaches to addressing service failures. 00:00 Intro 00:03 Welcome 00:38 Creating Expectations 03:06 Unintended Consequences 04:03 Know when to use the right tool at the right time 05:43 Hotel Loyalty (?) Points 07:07 Coupons are just one tool 09:19 Outro Interested in the book, Service Design Principles 1-100? Check out the special offer just for podcast listeners. Support us with Value 4 Value Find out more about “Value 4 Value” here: https://value4value.info/ Time - rate us on your preferred podcast platform, write a review, or submit your own service design principles or insights into the SDP in the books. Talent - Help promote the podcast on social media, produce some incidental music for the show, or suggest a way your talents can help. Treasure - use a modern podcast app to send us boost-a-grams or streaming value. We’ll recognize all contributions and comments in future episodes. Alternatively, make a traditional donation via Ko-Fi to help us cover our hosting and production costs. Get a modern podcast app: https://modernpodcastapps.com/ Traditional donation: https://ko-fi.com/neoluxpodcasts https://www.paypal.com/donate/?hosted_button_id=KCP8BRUHP3HZS Daniele Catalanotto is a service design practitioner, the author of the Service Design Principles series of books, and the founder of the Swiss Innovation Academy Guy Martin