The answer to the eternal question of how to keep customers engaged and satisfied is simple: Make ’em laugh, or at least try to.

This may seem brave, but a new study, by Australian and German researchers, reports making customers laugh or amusing them with light-hearted banter presents an all-round win-win.

Researchers Michael Kleinaltenkamp of Berlin’s Freie Universität, and Christine Mathies, Paul Patterson and Tung Moi Chiew of UNSW Business School, explored the impact of humour in two different service environments: tertiary education in Germany, specifically when used by lecturers; and a suburban newsagency in Sydney where one staffer had become something of a local legend for his clowning antics with customers.

Until this study, research on the effect of humour on frontline service encounters has been scant with previous research suggesting an unwelcome joke may equate to a major service failure, comparable to billing a customer the wrong amount.

However, the new study, which recorded 537 responses straight after the service encounter, finds humour can actually have the opposite effect, regardless of a customer’s sense of humour.

One of the main difficulties for the researchers was in overcoming the many variables associated with humour. “Whether it’s perceived as being humorous very much depends on the person who’s receiving it,” notes Mathies.

"Laughing is good for mental wellbeing so it’s often the better option in difficult situations"

For the study the researchers followed up service encounters with a survey that measured the customers’ humour recognition – their ability to tune in to humour – and their propensity to be humorous themselves.

They then looked at their perception of what kind of humour the service employee had used. Were they able to detect humour, and did they find it funny?

“Someone with a strong sense of humour can easily recognise when someone else is trying to be humorous, and is also much more likely to find it funny,” says Mathies.

“Not-so-humorous people may think the person is being friendly and friendliness is a big thing in making the service interaction positive for the customer, so all is not lost.”

So what happened when these “happy campers” and “grouches”, as the researchers branded them, met funny or not-so-funny employees?

Happy campers perceived more humour and found the interaction more enjoyable. Positive humour, making uplifting comments about either the customer or the employee themselves, contributed to a friendly atmosphere generally.

Happy campers also didn’t mind laughing about faults and weaknesses. They found negative humour funny and this flowed on to their satisfaction and enjoyment, but negative humour bypassed the grouches. Important for organisations that want to have more fun with customers is the insight that even happy campers’ strong sense of humour needs to be activated by a service employee initiating humour.

Ironically the study found, when a grouch meets a serious employee – like meets like – they enjoy it, but their satisfaction with the service organisation overall goes down. Conversely, when they meet someone who injects humour, even though they don’t enjoy it, grouches perceive it as friendly and their satisfaction level rises.

This finding fascinated the researchers who expected that attempts to make a grouch giggle would go down like a metaphorical lead balloon.

Since customer satisfaction drives big-ticket monetary outcomes such as repeat purchase behaviour, long-term loyalty and positive word of mouth, the researchers conclude that serving up humour to both happy campers and grouches is universally good for the bottom line.

There are various ways for companies to embrace these findings, says Mathies. They can target applicants with humour in their recruitment programs or create a work environment where people are encouraged to use humour.

Most recently Mathies has seen this latter approach used at an aged care facility to lighten awkward moments and as an emotional coping strategy, both for the elderly residents and for staff.

“The management encouraged it by modelling the use of humour. At the end of the day, teams give a cheeky debrief in a humorous way,” she says.

“Laughing is good for mental wellbeing so it’s often the better option in difficult situations.”

A version of this article first appeared in UNSW Business Think