by Keitha Oliver
Thank
you for your complaint...
Sounds sarcastic
right? Maybe even counter-intuitive? Why would a business encourage customers to complain and even thank them for doing so?
On the surface, customer complaints seem like a hassle – time consuming and
expensive to resolve. Then, there is the ego-bruising aspect of admitting
failure. However, research has shown that effective complaint handling can
actually be a source of differentiation and competitive advantage.
No
news is bad news
Let’s face it –
people love to talk. They talk when things go well, and they talk even more
when things go wrong. In many instances, dissatisfied customers do not complain
directly to the company, they simply stop purchasing altogether. Moreover, they
share their negative experience with others so you not only lose your customer but
also several other potential customers without even knowing it! Don’t wait for
customer complaints to come to you. Actively and consistently engage your
clients to find out what you’re doing right, and what you could be doing
better.
Free
research
Customer complaints
are a veritable goldmine in terms of innovation, process enhancement, improving
marketing communications and more. Complaints signal a gap in your offering
that is important to the customer. What could be better than having your target
market tell you exactly what they do and do not want? 3M, an innovation
juggernaut, has claimed that over 60% of their product improvements are as a
result of customer complaints.
Customer
loyalty & positive word-of-mouth
We all know the old
axiom: “It is 5 times more expensive to win a new customer than to keep an old
one”. A well-handled complaint can prevent an irate customer from defecting and
cause her to become more loyal, often even more so than a customer who never
had a reason to complain. Furthermore, after having her complaint resolved in a
satisfactory manner, the customer is likely to tell as many as 5 other people
about the incident.
Increased
profitability
Higher customer
retention rates lead to fewer lost sales and greater customer lifetime value
through repeat sales. Additionally, earnings also grow through new business
from referrals or positive word of mouth. Finally, effective complaint
management pre-empts the cost of correcting future service failures. British Airways
was able to cut customer attrition in half and triple the ROI in its customer
relations department through complaint resolution.
Help
your customers complain – The P.E.E.K. Principle
Many times customers
do not complain because they feel the effort is not worth the reward, or that
they may not get the desired result. You can make it easy for customers to
complain by using the P.E.E.K. Principle i.e.
Publicize, Empathize, Empower and
Keep in Touch.
§ Publicize your complaint
handling system, both internally and externally. Communicate policies,
delegated limits of authority and escalation routes clearly to all client-facing
staff. Set up and advertise telephone numbers, email and ‘snail mail’ addresses
dedicated to receiving customer complaints.
§ Empathize with the
customer; put yourself in his/her shoes. A complaint is not a personal attack,
but an opportunity for the company to improve and progress. There is no need to
become combative. Instead, welcome the complaint and allow the client to vent. Sometimes
all the client wants is for someone to listen to what he has to say.
§ Empower the first
point of contact to resolve the complaint. The length of time to resolve a
complaint can be an added source of frustration. Give frontline staff the
authority to refund, replace or otherwise settle the customer issue on the
spot, thereby minimizing the wait time.
§ Keep in
touch. Always acknowledge a customer complaint
whether through a telephone call, email or letter. Thank the customer for highlighting
the issue, and advise him of the steps involved and probable time frame for its
resolution. Partner with the customer to come up with a win-win solution.
Think
back to the last time you were dissatisfied with a product or service, what did
you do? I, for one, love to complain - it gives me the opportunity to see how
much (or little) that firm values my business. So the next time you receive
lacklustre service at your favourite utility, or that new pair of shoes doesn’t
fit after all, speak up! Your complaint could be an eye-opener for both you and
the company.
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