Customer Complaints
BY KAREN LELAND
Listen UP!
Every entrepreneur and CEO knows the theory:
Carefully listening and responding to your customers’ complaints builds loyalty and yields valuable information about how service can be improved. Yet, in practice, many companies forget to focus on these
“hidden gems” of feedback and do a poor job of resolving service breakdowns.
CHRIS DENOVE, coauthor of Satisfaction: How Every Great Company Listens to the Voice of the Customer, says one problem is that most people don’t complain directly to the company, but to their social network instead.
“If a customer has had a great experience, they will tell other people about it,” Denove says. “Unfortunately, if they have a bad experience, they are one and a half to two times more likely to talk about that to friends and family.”
Along those lines, Denove says that customers can be divided into three groups:
• APATHETICS: Those who are basically satisfied with a company, but not promoters or fans.
• ADVOCATES: Those who go out of their way to do business with a company and tell others about their positive experience.
• ASSASSINS: Those who go out of their way not to do business with a company and want everyone they know to do the same.
He points out that capturing customer complaints and resolving them quickly and eff ectively helps to convert apathetics into advocates.
KEITH BAILEY, coauthor of Customer Service for Dummies says that in order to make sure complaints are filed, companies should implement a data-based complaint log. The purpose of the log is to record critical information for each problem presented, including the date, customer’s name, nature of the complaint, specific details, customer’s comments, actions taken to resolve the issue and any follow-up activities.
Bailey says that over time, task teams can analyze the complaint logs and determine patterns, trends and root causes of recurring problems.
As both Denove and Bailey point out, once the problem is recognized, resolving it can be even more complex than it sounds.
“First and foremost, customers want the chance to vent their frustrations and receive an apology,” Bailey says. “Customers also expect their problem to be fixed in a timely, reasonable and fair way.”
Beyond these basics, he points out that it’s the interpersonal element of the interaction—Was the company empathetic? Polite? Friendly?—that closes the satisfaction deal.
BUT IT’S these seemingly intangible interpersonal qualities that companies oft en find so hard to demonstrate. Dr. William Withers, a professor of communication arts at Iowa’s Wartburg College, says one reason for this is a lack of adequate customer service training. A recent study completed by Withers revealed that although 78% of companies surveyed said they provide “some” customer service training, 68% said they would provide more, if only they had the means.
Bailey asserts that this kind of thinking is shortsighted. “It costs about five times more to gain a new customer than it does to retain a current one,” he says. “Companies may save some money on the front end by not doing customer service training, but they will lose a lot more on the back end when that customer walks due to poor service.”
Bailey suggests that smaller companies with more limited budgets look at such options as online training to supplement traditional classroom-style education.
In the end, companies that learn to appreciate and deal with customer complaints, rather than avoid them, will be the winners in the service game. They’ll keep their valued customers around long aft er the problem has been resolved.
BACK TO THE FUTURE
As for the future of complaint management, Dr. William Withers warns businesses that the demographic shift in the US will cause a virtual customer service train wreck by 2010. “We’re reaching a critical point demographically, where baby boomers will hold about 65% of the disposable income,” Withers says. “So while boomers will be doing much of the nation’s shopping, Gen-Y workers will make up a substantial proportion of the service sector.” The problem, according to Withers, is that Gen-Y and, to some extent, Gen-X workers have vastly different work habits than their baby boomer customers.
Among those differences, Withers cites the lack of basic interpersonal skills such as eye contact, patience and expression of empathy. He says that without proper training, the younger generations, who grew up on a steady diet of video games and other electronic entertainment, will struggle to make connections with customers and meet their service expectations.