“If you don’t take care of your customers someone else will”
This well-known quote certainly rings true in times of economic downturn when it’s a buyer’s market and your customers right to vote with their feet could make a significant difference to your bottom line. If a customer feels aggrieved, they will move on, most likely to your competitor, and it can have a devastating effect on your business.
According to Ruby Newell in her book Understanding Customers, it takes 12 positive service experiences to make up for one negative experience in the mind of your customer. And what if that negative experience is an unresolved issue? When unresolved, a negative experience could turn sour. Research suggests that when a customer complaint is eventually resolved, 70% are satisfied. That means there are still 30% of customers that are dissatisfied with the process. Most likely the resolution didn’t happen quickly or easily enough and this served to erode the trust they had in the business. On the flip side, when a customer complaint is resolved quickly, customer satisfaction increases to 96%.
So in terms of customer retention, it’s crucial that we know how to resolve customer complaints and look after our complaining customers before some else does.
I had an experience once where I voted with my feet, literally, after an unresolved complaint with a shoe shop. And what happened in the end shocked me. I had purchased a pair of shoes only weeks before the top of the shoe starting peeling away. When I returned the shoes to the store they would not budge on a replacement or refund, claiming it was wear and tear. I escalated it to the area manager, even asked to go higher but was informed that the only option was to send the shoes off to the manufacturer for testing. To my utter disbelief, the tests came back confirming normal wear and tear. As a regular and loyal customer, and feeling completely violated and trapped with no other options, I vowed never to return to that shop and I stood by my word – for 4 years!
One day I happened to be walking past, and never one to pass up a shiny SHOE SALE sign, figured a quick look wouldn’t hurt. As I walked through the door, an assistant at the till looked at me, smiled and said hello. I mumbled a hello without eye contact, not wanting to engage. After all, this was the shop that had done wrong by me. The assistant started walking towards me and asked if she could help with anything. I told her that I was just looking, trying as hard as I could to disengage. She kept trying to talk to me, asking me how my day was and eventually I stopped, looked at her and told her my story. After I finished, she looked at me in disbelief and said “I am so sorry you had that experience. I am the owner of this shop. This is a 70 year old family business; my husband’s grandfather started it. We used to own seven stores in Perth and now we are just surviving and struggling to hold onto this last store. I work here because I had to let all my staff go, due to a sharp decline in business”.
I was shocked! Following the shabby treatment I’d received and as there was nothing on their website about who the owner was, I’d naturally assumed this was a large corporate chain run by offshore directors. She shook her head when I told her about my treatment by her area manager and explained that it was one of the reasons they’d had to let her go.
Can you imagine how much business this shoe shop had lost from me as a potential lifetime customer, everyone I had told about my experience and everyone else who had had the same experience, plus their friends?
My story is not alone and highlights the importance of complaint resolution and what can happen if a customer is left dissatisfied. Narrow minded companies see the customer in front of them as a transaction, making the deadly mistake of assuming that people only complain to get something for free. They think that if they give something away, even if they are not to blame, the customer will be getting away with something at their loss. Smart companies on the other hand, see the bigger picture, and realise a small investment now will reap the rewards later with repeat business and word of mouth referrals. They know that the customer is King and can make or break their business.
Reminds me of a story I used to quote way back when I started delivering customer service training. It’s an oldie but a goodie, and you may have heard it before:
“I’m a nice customer. You all know me. I’m the one who never complains, no matter what kind of service I get. I never nag. I never criticize. And I wouldn’t dream of making a scene, as I’ve seen some people do in public places, no matter how bad the service is. I think that is uncalled for. No, I’m the nicecustomer. And I’ll tell you who else I am – I’m the customer who never comes back! And I laugh when I see the vast sums of money being spent by your company to entice me to come into your store, when you could have saved your company that expense by looking after me in the first place. In fact, a nice customer like me, multiplied by others of my kind, can ruin a business. And there are a lot of nice people like me. When we get pushed far enough, we go to another establishment where they appreciate nice people like me.”
To ensure your people are taking care of your valuable customers, here are my top 3 tips to effective complaint resolution:
- Always find a way to resolve a customer complaint, even if you’re not at fault. An aggrieved customer is a threat to your business, and giving them something for their inconvenience, even small, will go a long way towards their perception of you, resulting in greater trust and loyalty.
- If you’re not sure how your customer wants the complaint resolved, ask them. Usually it will not be as massive as you thought and you can always strike a compromise, but the simple act of involving them in the resolution will help them feel valued and make them more cooperative.
- Create a complaint handling process that empowers all your employees with the knowledge and the authority to resolve complaints at the first point of contact. Sure, they may make mistakes, but you’ll be the winner in the long run as the act of quick resolution will increase customer satisfaction and retention.
Ava Lucanus specialises in aligning your customer experience with your brand promise, through corporate communication skills. Don’t wait till you’ve had a complaint. Call Ava today for an obligation free coffee chat in person or by telephone, to discuss how your organisation can become more effective at complaint resolution.