Encourage customer complaints

At Finnies we can advise business owners on many aspects of running and growing a business. Here are some thoughts on turning customer complaints into a positive...

Nobody naturally enjoys listening to their customers complain, but if they are handled in the right way complaints can have a beneficial impact on both the performance and profitability of a business.

It is all a question of attitude - learning to regard complaints as a valuable source of market data and a unique opportunity to strengthen the relationship with the customer.

Complaints can increase customer loyalty

Often it is not the fact that something is actually wrong that annoys as customer, so much as the perception that they are not receiving a sympathetic hearing. A well-handled response can do more than just restore a customer relationship - it can improve it.

Indeed, research suggests that customers who complain and receive satisfaction tend to be more loyal than customers who do not complain at all. For a customer driven business, then, complaints are the highest form of feedback.

Serious damage

A business that lacks an effective complaint mechanism is not only ignoring an important source of information about the marketplace - it could also be allowing potentially destructive perceptions to spread within its customer base.

Very often the most damaging complaints are not brought to the company's attention but are voiced to other customers. Most dissatisfied customers voice their resentment to at least four other actual or potential customers. Without the window into your customers' feelings that an effective complaints mechanism affords, serious damage could be done to your reputation without your even knowing about it.

So rather than hoping your customers do not complain, you might be better off establishing a mechanism that positively encourages them to.

Five-step procedure

Here is five-step procedure to help you make the most of customer complaints:

1. Listen sympathetically to a customer who has a complaint, and make sure there is always someone available to do this.
2. Never be defensive, even if the complaint seems largely unfounded
3. Validate their complaint - show them that you understand their difficulty and empathise with them
4. Spell out what you propose to do to remedy the situation
5. Do it!

Finally, make sure everyone who needs to know is informed of the complaint and the remedy - and that the lesson is taken to heart and integrated into your standard operating procedures for the future.

If you are looking for support and advice from a team of professional accountants and business advisers, contact Finnies.