Everyone who handles customer complaints will no doubt tell you that complaint handling is challenging. No one would disagree. Nevertheless, customer complaints are actually a gift.
Companies that consider complaint handling as a necessary evil are more likely to lose customers than retain them. When complaints are invited and handled well, they can transform into experiences more positively remembered than if no complaints were made.
Consider these advantages of receiving complaints.
1. Complaints offer a chance to keep and improve customer relationships.
Customer retention measures how many customers return and how much revenue comes from repeat business. A typical American company loses an estimated 15 percent of its customers annually. In the retail industry, that percentage falls between 25 and 40. This means most retailers must regain up to 40 percent of their business with new customers to stay even. Yet well-handled complaints can create strong bonds between customers and organizations. Oftentimes it’s a simple matter of letting customers know you value them.
2. Complaints define what customers want.
Listening carefully to a customer complaint may unveil some good ideas about how to satisfy or delight your customers. Unless they receive a complaint, companies might never hear about a product or service failure and then have an opportunity to repair the damage. But organizations must be willing to listen, and they must have internal systems capable of integrating this type of feedback. A technician I spoke with at Apple Computers told me that Apple loves it when customers tell them there is a software or hardware problem. If what the customer says makes sense, Apple makes the change. However, most customers never go to the Apple webpage to describe their problems. The customers figure out a workaround and think they don’t need to say anything, leaving other customers to go through a laborious process to find that same solution.
3. Thoughtfully addressing complaints is one of the least expensive marketing tools.
Marketing departments’ tactics to establish customer preferences are expensive and generally take time to implement. The type of feedback received can be inaccurate because it’s hypothetical. Marketing research is valuable, but nothing compares to making good on the complaints of actual customers. An example that makes this point occurred in the mid-1980s when Coca-Cola conducted research on its New Coke concept. The new product passed with flying colors in the research and taste tests. But when the New Coke was released, customers felt betrayed. People blasted Coke with complaints, flooding its phone lines and protesting at its Atlanta headquarters. They threatened to never buy Coke again.
4. Loyal customers more often voice complaints.
Complaining customers are more likely to trust that the company will address their complaints appropriately. Consumers ask themselves: “Does this organization have my back? Is it going to take care of me when I have a genuine problem and report it?”
One way that customers test this trust is to experience a company’s behavior when handling a complaint. Companies handling complaints to customers’ satisfaction and those that exceed expectations dramatically increase customers’ trust in them, sparking a surge of loyalty. Customers feel they owe the company something for helping and for how well they were treated.
Moreover, research involving 700 service incidents from the airline, hotel, and restaurant industries found that out of all positive memories of good service, 25 percent started as service-delivery failures. This management lesson shows how, rather than hiding or denying service breakdowns, companies who consider complaints a gift and who treat the complaining customer graciously can instill loyalty and trust.
5. Complaints mean customers are still talking with you.
Businesses offer services and products, and customers purchase them. The relationship is based on mutual exchange. But every relationship faces issues. And the ones that can be salvaged are those in which the parties continue to talk to each other. Customers can choose to complain, or they can walk away and never come back. But it doesn’t end there. People who feel they’ve been wronged will talk to others. Word-of-mouth grievances are a genuine danger to companies’ reputations. When customers complain to a company representative who can address the issue instead, it’s possible to fix — and even improve —the relationship.
The complaint mindset needs to shift. Everyone in an organization that communicates with complaining customers possesses the opportunity to turn a negative situation into a positive experience for the customer.
Janelle Barlow, Ph.D., is an award-winning speaker, trainer, consultant, and author who translates research into practical tools to improve customer service and complaint handling. She works with Customer Service Representatives, managers, and entire companies nationally and internationally to help them recover and retain customer loyalty. She has recently released the third edition of her bestseller (more than 275,000 copies sold to date), A Complaint Is a Gift: How to Learn from Critical Feedback and Recover Customer Loyalty (BK Publishing, Nov.8, 2022). Learn more at AComplaintIsAGift.com.
© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.