Turning 'Bye-Bye' Into 'Buy-Buy'!

We often have situations where our experiences don’t match our expectations.

Everyone has an idea in their mind of what they might expect from a service situation, and if it differs from that expectation in any way, it causes our reticular activating system in our brains to respond.

If it’s better than expected, we are pleasantly surprised and occasionally delighted.

If it’s worse than expected, we often are disappointed, frustrated and annoyed.

What we do about the problem (if we view it that way) can often mean the difference between whether we return or never open the doors of that company again, either in reality or metaphorically.

Interestingly, the way companies handle complaints can mean the difference between success and failure in an increasingly competitive marketplace.

Businesses that turn complaints into opportunities for building closer relationships with customers are the ones that are most likely to survive and prosper.

When customers complain, it’s an opportunity to turn the situation around and actually promote better loyalty scores.

Why is this?

Because most people act in their own self-interest, meaning they are seeing it from their own perspective and it gives you as the business owner or salesperson a chance to see things from that perspective.

What is fascinating about this is that most studies done on this subject shows that turning a negative experience into a positive overall outcome actually increases the chances of that company retaining the loyalty of the complaining customer.

In other words, we can turn the attitude of ‘bye-bye’ into one of ‘buy-buy’!

John Goodman’s company, TARP, did some research on this subject.

He showed that, while customer service is typically a cost centre in most companies, it could be turned into a powerful marketing force to drive sales, repeat business and greater profits.

His research showed that roughly 4% of customers (1 out of 26) who had cause for compliant actually did so.

The other 96% (25 out of 26) stop buying and tell 9 to 10 others within a week about their poor treatment.

If the company is able to satisfactorily solve the problems of the 4% that complain (turn the negative into a positive), they will tell 6 to 7 others within a week that the company solved their problem.

Further research showed the benefits of dealing with complaints in an efficient and timely manner.

In their book, Turned On, Roger Dow and Susan Cook describe research done with Marriott Hotels to identify which guests intended to stay at the Marriott again.

They divided guest stays into 3 groups A, B, and C.

A = Nothing bad happened during their stay.

B = Something bad happened, but Marriott fixed the problem.

C = Something bad happened, but Marriott did not fix the problem.

The percentage of these three groups that intended to return to the Marriott were as follows:

A = 89%

B = 94%

C = 69%

So, essentially, a fixed problem creates a more loyal customer than if the bad situation didn’t occur in the first place.

This means that it is necessary to create a system that encourages complaints if necessary, so you can have the opportunity to turn it round.

Here are some ideas for that:

View complaints as opportunities to counterbalance negatives and build stronger relationships with customers.

Record the complaint so that you have a record f it that can be easily distributed around the organisation

Talk to the appropriate person or department with the authority to fix what is wrong.

Ensure that anything that can be fixed is done so in the shortest possible time

Make sure you deal with the customer correctly and that you have dealt with the complaint effectively

Identify their ‘loyalty pattern’. That is, see whether they come back to you, at what times and what they buy

Keep track of statistics on repeat purchases and referrals stemming from the fixed problem.

Calculate the ROI (return on investment) of the entire process.

If you’re able to do this on a regular basis and create opportunities for complaining customers to be dealt with efficiently, the system will enable you to keep track on the value of putting ideas like this into action and you’ll reduce overall the reasons for complaints as your business improves.

Thanks again

Sean

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