When Things Go Wrong – Seeing Complaints as Gifts

You know that unhappy customers tell more people about their purchase experiences than satisfied customers do. And, that it is far more expensive to acquire a new customer than to keep a current one. But it’s also true that handling a customer complaint or problem well can increase the likelihood that they will give you another chance, or even leave more satisfied than if all had gone according to plan. It’s all in how you approach it.

The cost of complaints

The stats on what bad service costs American companies are pretty staggering. In a compilation of consumer research drawn from American Express Customer Service Barometer, Salesforce, Harvard Business Review, Bain & Company and others, Help Scout catalogued how poor service can be kryptonite to growing a business. Consider these examples:

More than half of Americans have scrapped a planned purchase or transaction due to bad service (American Express Customer Service Barometer).
Almost three-quarters of people are likely to switch brands if they find the purchasing process too difficult (Salesforce).
It can be from five to 25 times more expensive to acquire a new customer than keep a current one (Harvard Business Review).

Yet, viewed and handled the right way, complaints can be invaluable drivers of better business performance and improved relationships with customers.

Finding the upside

Whether you’re leading within a company or the founder of your own, knowing how to satisfy the people who buy your product or services is critical to survival. Still, sometimes things will inevitably go wrong. When they do, knowing how to make them right can mean the difference between losing a customer and building loyalty.

Ensuring that customers are heard and valued, and that everything is done that realistically can be to address issues, provides a great opportunity to earn their business anew. Even if you can’t fulfill every desire. From this vantage point, complaints become valuable gems provided in real time without the delay and costs of market research.

To reap the benefits of customer complaints, start with these principles.

Demonstrate that you value the customer’s time. Stop and listen. By sharing their story, customers are telling you important ways you can improve. Use effective listening skills by actively engaging, asking questions to probe deeper and restating their concerns in your own words to clarify understanding. Feeling unappreciated is the top reason customers give for switching away from products and services, according to research by cloud service provider Newvoicemedia.
Get personal. With so much of the purchasing journey often automated, it is that much more impressive when a human being responds to a complaint. When real people with actual names, email addresses and phone numbers respond to online or phone complaints, customers notice and problems actually get resolved. In physical buying situations, strive to have an employee engage with the customer directly to understand the issue fully and address it fairly.
Respond quickly. Harris Interactive reports that 75% of customers believe it takes too long to reach a live agent. Don’t you? Exceed customer expectations with your response time – even to first simply acknowledge the complaint and provide an estimated time to address it more fully.
Search for solutions together. When you ask customers what would meet their needs, you might be surprised at how simple the solution often is. Sometimes, it is a genuine apology and to feel that you have learned from the mistake and taken steps to keep it from happening again. When you engage customers in getting to a solution together, they are more likely to leave satisfied and you are less likely to fall into the trap of seeing them as the problem. Human-to-human interaction is more likely to result in finding common ground.

The payoff

In a study conducted using Twitter complaints received by airlines and wireless carriers, a team of researchers found that prompt, personal customer service literally paid off. Six months following their interactions with the companies, customers who had a positive experience with a customer service representative who addressed their complaints were willing to reward the brand with greater loyalty and to pay a price premium to use their services.

Companies that respond to all complaints, reach out quickly, personalize their response and show empathy can turn a disappointing customer experience into one where customer preference grows and the organization shines.