I don’t know about you but one of my favorite (Ha Ha) tasks as a business owner is handling customer complaints . Of course never having had the problem personally, I can only speak from my clients experiences (Right! The size of my nose at this point is second only to Pinocchio’s). In reality complaints will occur no matter how competent we are in delivering products and services because as the adage goes “You can’t keep all of the people happy all of the time.”
Most business owners run in the opposite direction when they get word of a disgruntled customer. This is a common but counterproductive response to a real problem. What happens when you ignore a customer complaint? Does it go away? It may, but generally so does the customer. Ignoring complaints causes them to fester and does far more damage than if handled head on.
Consider the following:
- A survey found 68 percent of the customers left because of a perceived attitude of indifference toward them by the owner, manager or some other employee. Proper complaint handling can salvage these customers.
- A typical dissatisfied customer will tell eight to ten people about his problem. One in five will tell twenty. Generally it’s the unhappy customers who talk.
- Seven out of ten complaining customers will do business with you again if you resolve the complaint in their favor. On average a customer whose complaint was satisfied will tell five people about the problem and how it was satisfactorily resolved.
- The average business owner spends six times more to attract new customers than it does to keep the old ones. Yet customer loyalty is in most cases worth ten times the price of a single purchase.
As business owners we need a process which enables us to handle customer complaints and keep old customers. I propose the following 6 step approach to handling customer complaints:
Step 1: Confront it. No this doesn’t mean be adversarial. Remember, never burn a bridge. Give the customer an opportunity to spill their guts. A simple open probe like “What seems to be the problem?” generally will cause the customer to vent. Even those of us whose throats tighten, palms sweat and hearts pound at the thought of dealing with an irate customer should be able to get that out. By listening to what the customer has to say, you’ll be armed with the information you need to investigate the complaint and correct it at the source.
Step 2: Knowing that a customer with a complaint is likely to hold back, a follow up question is necessary. After they’ve spilled their guts say something like “In addition to that is there anything else?” In response to your question in Step #1 the customer did the initial purging. However, may not have divulged all. This question following on the heels of “What seems to be the problem?” will give the customer the opportunity to delineate any remaining objections. At this point the situation should be diffused. Now we are able to move forward in a positive sense.
Step 3: Restate the problem. You need an accurate restatement to demonstrate to the customer you’ve listened and understand. To effectively restate you must take detailed notes. Nothing is more annoying to customers than to have to repeat their complaint several times. Reflecting on personal experiences, when did you feel good about the way a complaint of yours was handled? More than likely it was when the listening party could clearly restate the facts. Further, complaint restatement demonstrates understanding. If your restatement is inaccurate because you misunderstood you’ll have a chance to clarify.
Step 4: Propose a solution. You’ve diffused the situation, surfaced all of the objections and communicated you’ve listened and understand the customer. You’re prepared to propose a fix. Any fix offered prior to this point would have been premature. Steps 1-3 should have told you what the customer wants, if not, ask and offer a solution in a positive, constructive fashion.
Step 5: Offer an extra. To remove the last trace of ill will, offer and extra service. The extra doesn’t have to be significant in value. To illustrate, several years ago I contracted to have the interior of our offices painted. The owner, whom I met with several times, was a competent young business person. I encountered a problem because he had packed his bags for Hawaii and left his paint sniffing crew behind to screw up the job. When the owner got back in town, we met, and he began to take me through Steps 1-4 above and offered to paint the hallway to the second level at no extra cost. Now we’re talking about $75 extra, no big deal, but I felt good about it and that’s what matters. By offering an extra the next time the customer buys they will remember your generosity instead of the complaint.
Step 6: Make a follow-up call to ensure satisfaction. When appropriate, call the customer back to guarantee satisfaction. This will do two things. First, it will verify the problem has been taken care of. And second, it will leave a positive final impression about your desire to provide excellent service. Right or wrong, customers will remember their last contact with you most vividly.
Some would argue that what comes with personal success is a level of peace of mind. It has always been a goal of mine to find some level of peace, even if negotiated, as it’s a lot more rewarding than conflict. If we agree that peace of mind in every encounter is a productive way to do business then I suggest the following questions as something to lead us in all of our encounters (business and personal):
- Do I want to be happy or do I want to be right?
- Can I be happy blaming and making another person wrong and myself right?
- Do I want to experience peace or do I want to experience conflict?
In handling customer complaints you may desire to be right, blame the customer and fight back, however, this would be a mistake if the objective is to retain the old customer.
Although it may not be the most enjoyable hat we wear as business owners successful complaint handling has many advantages. First, it points to areas that need improvement. Second, it gives you a second chance to provide service and satisfaction to dissatisfied customers. And third, it provides a wonderful opportunity to strengthen customer relations. How bad can it be?
This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.
