Handling Customer Complaints

Handling Customer Complaints

One of the characteristics separating excellent firms from mediocre ones is how they handle, and even encourage, customer complaints.

A customer complaint presents both a danger and an opportunity, depending on how it is handled. Since it is virtually impossible for a firm to remove all defects from its work, and especially in its service delivery processes, handling complaints when they arise provides a competitive differentiation for your firm and enhances customer loyalty and goodwill if they are handled properly.

Furthermore, complaints handled quickly result in higher loyalty; and for that reason alone, one of the highest-value activities a firm can add to its repertoire of policies is an effective customer complaint recovery system.

What is astonishing to realize is that customers who complain can become more loyal than if they had no problem at all—if the complaint is handled quickly and resolved to their satisfaction. Marriott found the following percentages of intent to return when customers had a problem during their stay:

  • No problems during the stay = 89 percent return rate.
  • Had a problem during the stay and it was not corrected to customer’s satisfaction = 69 percent return rate.
  • Had a problem during the stay and it was corrected to customer’s satisfaction, before he or she left the property = 94 percent return rate.

This is why it is so important to resolve all customer complaints quickly, or at least take action to resolve them immediately.

Complaints are not like fine wines; they do not age well. Customers complain because there is a gap between what they expected to happen and what actually happened. Once they experience a problem, their expectation of having it resolved quickly is actually low (which is precisely why most customers do not complain—they think it will do no good), so a complaint is an excellent opportunity to improve their condition and turn the experience from a moment of misery into a moment of magic. You will redirect their focus on the satisfying outcome, rather than the original problem.

The golden rule when it comes to customer complaints: It is not who is right, it is what is right. Carl Sewell, author of Customers For Life: How to Turn That One-Time Buyer into a Lifetime Customer, has this advice:

Everything you need to know about handling mistakes you learned in nursery school: acknowledge your error, fix it immediately, and say you’re sorry. Odds are, your customer, like your mom and dad, will forgive you.

Hal Rosenbluth, CEO of Rosenbluth Travel, returns all commissions earned on any arrangements his company makes incorrectly, a policy almost unheard of in the travel industry. He explains the benefits of this policy in his book, The Customer Comes Second and Other Secrets of Exceptional Service:

It’s better to spend money refunding clients when they are not satisfied than to forfeit money in lost accounts for the same reason.
Many of our service-guarantee refunds have been because of supplier error [airlines, hotels, rental car agencies, etc.], but we returned our commissions to our clients because we hold ourselves responsible for the entire process.

When analyzing customer complaints and defects, ask how, not why. Why questions tend to generate excuses and justifications, while how questions will lead to knowledge to correct the problem. “How can we prevent this from happening again?” is a much better question than “Why did this happen?” Also, follow this five-step recovery process to deal effectively with all customer complaints:

  1. Apologize. Say I am sorry, not we are sorry.
  2. Urgent effort. Fred Smith, founder of FedEx, follows the “Sunset Rule”: “The sun will not set on an unresolved customer or employee problem that is not dealt with in some way.”
  3. Empathy. Show understanding and compassion; fix the customer before fixing the problem.
  4. Compensation. Be generous, show remorse; better yet, ask the customer how he or she would like it to be fixed (usually, the request is less than you would have given up).
  5. Follow-up. Learn how the customer feels about the situation; provide closure.

The Ritz-Carlton gives its team members great latitude in resolving customer complaints, with each one informally authorized to spend $2,000 on solving customer problems. In the Ritz-Carlton Basics, a set of twenty guiding principles every team member is held accountable for, number 13 states: “Never lose a guest. Instant guest pacification is the responsibility of each employee. Whoever receives a complaint will own it, resolve it to the guest’s satisfaction and record it.” This “ownership” of customer complaints it quite effective, and every firm should have this attitude with respect to any customer problem.

Customer complaints can be more valuable than customer compliments because they provide the firm with information on aspects of its service delivery that need to be improved, a second chance to gain the customer’s business, and an opportunity to actually increase the customer’s goodwill and loyalty.

Given these facts, firms should actually provide an incentive for customers to complain, and in my next post I will share one of the most effective strategies to do just that.

Robert FORD

Business Growth Specialist | Business Community Leader| Business Connector

6 年

One of my favourite things to read about, salespeople could not use this enough!

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Basudev Goswami

Director Customer Satisfaction & Quality (Power Product) at Schneider Electric

6 年

One of the best article I read in recent times , normally we also follow same methodology, There is a owner of each issue reported, There are various escalation process to get support from inside for the issue owner. Issue owner normally say to customer- I am sorry to hear that. How can I help you .based on the response , issue owner will use specific process.

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evelyn lim

Positive, Passionate, Purposeful in Marketing, Communication, Branding & Public Relations

6 年

Good five points mentioned. With the onset of social media, any complaint is shared faster than the speed of light. So, always having your atenna up for compliants & constructive criticisms is a must. Leaders (or the respected face of the company) should also be always clued in, working with their PR team to address things quickly (eg., AirAsia & broken bicycle). And don't forget to meant it when you apologise.

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BHAURAO KAKDE

Founder Scubev Technologies. QA & Mfg Excellence Expert. Black Belt Six Sigma. Ex Voltas, Cummins , LG , Atomberg. Consultancy Projects...

6 年

Dear Ron, Nice article mainly sees customer complaints as opportunity to improve the customer satisfaction. There are some complaints for example in hospitality business/ service business can be solved in quick way. As a Quality Assurance professional, working with manufacturing industry since 25 years, worked with various automotive and Consumer Durable Industries and resolved many complex customer complaints. Like to add, In manufacturing/ engineering industry it take more time to resolve customer complaints as many times root causes are related to design. It has go through various stages. Identify correct problem --> analyzing --> Making design change --> design validation --> actual field performance. What I like to highlight here, it is very important to track/ monitor these complaints till resolution or otherwise most of complaints loses its track email to and fro communication and again woke up after getting repeat customer complaints. To overcome such issues, we developed a web based application where important complaints are registered according to severity --> prioritized --> Assigned to solver --> Issue resolution --> Solution implementation --> Customer feedback --> closed if customer is satisfied. Issues are Monitored Till Resolution. This is very useful tool for manufacturing / engineering industry where problem solving cycle is time consuming. Regards Bhaurao Kakde

Sumannta Gupta

GM - Business Operations Pan India

6 年

Dear Ron , It is really a nice write up indeed . However I need to capture few lines in this regard . In my first phase of my career I have spent 18 years with XEROX corporation . Started my career as Customer Support Engineer and left the company as DGM . I am very field oriented person since beginning and what I have experienced and followed ' Customer Complaint is an opportunity ' to delight a customer . Customer complaint becomes damaging only if it is not handled efficiently. Customer knows that if situation comes they have to approach to the supplier through complaint . In my life whenever I used to receive any complaint through our Customer Satisfaction cell , always I used to take it as challenge to delight them and became successful in 99% cases . Trust my word , today I am no more in XEROX but still few of them always keep in touch with me . Basic need of a Customer to resolve the problem within shortest time up to their satisfaction level . Other than organisational process and systems , quality of complaint handling depends on the attitude of the person handling the complaint . Regards Sumanta Gupta India +919830110917 [email protected]

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