Thursday, 17 June 2010 17:49 youssefg

Share | |

Customer complaints are not such a bad thing

Customer service has been gaining support since the 1960s, and yet you see many businesses fall short of servicing their customers as they should. I had a nice surprise when I met a client last week who was managing a home furnishing business. I asked him about what made his brand successful, without hesitation he started praising the quality of his customer service, then he goes: "Most of my competitors hate to receive complaints, and they usually do their best to avoid any angry customers. Well, here it is different, we are happy to receive complaints, and usually we wait for those times to show why we are the best".

I had to recognize that he knew what he was doing, and it made me happy to have such a client. Managing complaints in the right way is an important success factor that increases customer loyalty and customer acquisition. Bad experiences have devastating effects and can ruin brands. First an angry customer will not come back to do business. Second an angry customer tells twice as many people about bad experience than a happy customer does about good experiences.

According to a tarp report, about 50% to 75% (1) of the time, customers complain to the person on the front line. Challenges arise when a business sells through distributors. Then the complaint is lost and never processed by the company.

Not all customers report service or product failures. The complaint rates are as high as 50-75% in case of monetary losses, and as low as 5 to 30% in case of mistreatment, quality, and incompetence problems. Think of how many customers leave the door and never come back again without giving you the chance to resolve the problem they faced.

The effect of how customer complaints are treated can harm customer loyalty. Depending on whether the problems are minor, 1 to 5$ losses, or major, 100$ losses, the ratio of customer who will come to do business with the company can be as low as 9% in case of major problem that are not reported. This same ratio is raised to 82% if the same major complaint that are resolved quickly.

Lesson learned: Build a strong customer basis that will not run away to the first comer who gives them a better deal. Take every complaint with a smile, show them how good you are, and show them why they should do business with you. Your customers are your ambassadors, what they say about you, is what you are!