Have you ever noticed how difficult some companies make it to complain? Apparently they don’t want to waste their time handling complaints. However, ignoring or mishandling customers who complain can be the downfall of your company. Pete Blackshaw’s book, “Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000: Running a Business in Today’s Consumer-Driven World” reveals the dangers of underestimating the damage unhappy customers can do to a brand.
Research shows that unsatisfied customers, when satisfied, are ten times more loyal to the company or brand than happy customers. In fact, they often become vocal brand ambassadors for the company. That being the case, a skilled entrepreneur will capitalize on this opportunity by making it easy for customers to complain. They encourage customer feedback by providing toll free telephone and fax numbers, web forms, email and Twitter addresses, and cell phone texting addresses. Each complaint is a marketing opportunity.
With the incredible power of the internet and Social Media, potentially millions of people will know how lousy you treated your customer within minutes. Although in the following case it took longer than a few minutes, it illustrates how customer complaints can go viral spanning the world.
A Taylor guitar belonging to a virtually unknown professional musician, Dave Carroll, was damaged on a United Airlines flight. When Dave complained to the airlines they did nothing to resolve the issue. One excuse after another – one roadblock after another. It became a long drawn out saga with many emails and telephone calls. He became so frustrated and angry at the way he was being treated that he threatened to write three music videos and post them on YouTube if United didn’t take care of the damage they had caused. United’s response was “go for it!” And he did. The results?
Dave’s first YouTube video has had over 8 million views worldwide; his CD sales and musical bookings have soared; he now has a website and a blog; he has an additional website devoted to the customer experience and speaks to various organizations on customer service; and the Taylor Guitar Company’s sales increased so much that they presented Dave with two new Taylor guitars!
What about United Airlines? After the first video, they tried everything they could think of to get Dave to remove the video from YouTube. Instead, Dave added the two additional YouTube videos he had promised United he would do if they did not take care of him. In retrospect, Dave came out pretty well while United Airlines did not. I wonder how much revenue they have lost as a result of this botched customer complaint. The irony is that all of this could have been avoided if United Airlines had been on top of their customer service policies and procedures.
You can view the first video below if you like and you can read the entire story by clicking here.
If you focus only on satisfying customer complaints, you may miss the opportunity to fix the underlying cause of the complaint. Just like a doctor who only treats the symptoms and not the underlying cause of diseases risks losing patients, a business must address the underlying cause of customer complaints or they risk losing current as well as future customers.
According to Stephan Michel, David Bowen, and Robert Johnston in a September 22, 2008 article in the Wall Street Journal (WSJ) titled, “Making the Most Of Customer Complaints”, customer complaints provide opportunities to improve your business.
The article is based on the authors’ years of work in service management, research, and a study they conducted with 60 organizations. Their term for fixing breakdowns in service is “service recovery” and its impact extends well beyond customer satisfaction to repeat business, profits, and growth.
Unfortunately, customer complaints are usually handled by hourly employees who have limited authority to do anything about them. Customers judge companies on how quickly and how well they initially respond to complaints as well as what actions they take to ensure the problem won’t occur in the future. In most organizations, hourly employees seldom have the authority to alter policies and procedures, let alone improve systems or processes.
The authors of the WSJ article see three groups of stakeholders in a business impacting “service recovery”. The stakeholders, who are Managers, Employees, and Customers do all view the issue from a different perspective. Managers can be reluctant to collect and share customer complaint data in spite of the potential benefit to the organization in terms of efficiency and profitability. Employees can view unhappy customers as the enemy. And, customers typically consider failed service as unfair treatment. Only 6% of the 60 organizations the authors studied did well in integrating these perspectives.
My own family’s recent experience with failed service illustrates the potential conflict between these three stakeholders. My step-daughter lives in Western Wisconsin and purchased four chairs from Hom Furniture Stores, a furniture chain in the Upper Midwest. Unfortunately, the local store did not have them in stock so she needed to pick them up from their warehouse which is close by where we live in Minnesota. We were planning on visiting her anyway, so we picked them up and delivered them to her.
After we had returned home to Minnesota, my step-daughter discovered that one of the chairs had a flaw. She contacted Hom Furniture and made arrangements with a customer service representative for us to pick up a replacement at the warehouse location and she would return the damaged one to the local store. However, when we arrived at the warehouse, the cashier told us she knew nothing about the arrangement. Then, she made us wait for close to an hour while she placed numerous calls to her manager, my step-daughter, and the customer service representative at the local store. Then to make a bad situation worse, there was also an issue with the price because Hom said they would give her a credit for the sale price of the chair she was returning but wanted to charge her the higher regular price for the replacement chair.
Now, how do you think my family feels about doing business with this store after they sold flawed merchandise, made no effort to compensate us for the inconvenience they caused us and then, to add insult to injury, wanted to charge us extra to for the replacement? What annoyed us the most was their total lack of concern for how much inconvenience they caused us or why the problem had occurred in the first place.
Although the Hom brand has been diminished in my family’s eyes, none of us are professional musicians. So, we won’t be making any music videos. In fact, to my knowledge, although we complained during the process, no one in my family has even complained to the store after the fact. I have no doubt that we will share our negative experience in conversations whether in person, on the phone, or online, as I have done here.
You too may have unhappy customers who haven’t complained but are having negative conversations about you and/or your business. No matter how good your products and services may be, there are bound to be customers who complain. And, at any given moment, your current and prospective customers may be having online conversations (both positive and negative) about you and your business. Once online and in search engines, these conversations last forever. The good news is you can easily find out what is being said and quickly address complaints or fan the flames of positive reviews using Social Media tools such as LinkedIn groups, FaceBook, and Twitter.
In conclusion, customer complaints are actually golden opportunities to protect and build your brand. Here is my top ten list of how to capitalize on this opportunity:
- Develop policies to ensure customers are treated fairly and with respect
- Make sure employees are trained and rewarded for good customer service
- Monitor online and social media conversations with free tools (i.e. Google Alerts, Giga Alert, TweetBeep, Back Tweet Alerts, etc.) and be prepared to join the conversations while the world watches you solving the problem or thanking a brand ambassador for their kind words
- Give employees as much authority as possible to satisfy customers
- Respond immediately to problems with an apology, ask questions, and listen
- Don’t argue or be defensive
- Deal with the complaint privately, if possible
- Offer compensation for the customer’s inconvenience
- Thank the customer for bringing the problem to your attention
- Learn what needs to be fixed from customer complaints
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Posted by: Mike Clough