Well no business wants complaints and all businesses should strive to deliver levels of performance and service that satisfy or delight their customers. But sometimes, even the best companies fall short.
Are the customers who complain part of a “vocal minority” who are dissatisfied? Or, are they just the visible “tip of an iceberg” and there are many more who you never hear from. It’s the silent ones who don’t complain that really hurt your business.
But first let’s consider a delighted customer – in this example a supermarket shopper. Their average weekly shop might be £100. They might also buy £25 of petrol a week to get loyalty points and perhaps even buy insurance from the store as well. Over 5 years their supermarket spend could easily exceed £30,000. Alternatively, someone buying a pack of cigarettes and a newspaper from a corner shop every day could spend over £10,000 over 5 years.
The loss of a customers spend could be significant but this is only part of the story. Companies like Tesco & First Direct have high levels of advocacy. So losing a customer means no future referrals. It could be much worse. A customer might move from being a brand advocate to a brand terrorist and tell others about their “unhappy experience”.
So taking the supermarket example above, the loss of the complainant, 2 referrals & 2 other existing shoppers (who stop buying after hearing about the problem), could easily have a total impact of £150,000 over 5 years.
I have had an account with First Direct for over 15 years. About 11 years ago, I asked for an account balance by telephone and their call handler tried to dissuade me from doing this suggesting I could get an account balance by using the ATM. After the call I was very irritated and decided to close my account.
But before I did this, I called the next day to complain and they apologised and said I could call anytime for a balance. A week later I got a call from a First Direct supervisor who apologised again and wanted to know if the issue had been resolved and if I was satisfied. A week later, I received a complimentary bottle of Scotch.
If I hadn’t complained, or if they hadn’t dealt with my complaint satisfactorily they would have lost the value of:-
In the early 90’s when I worked at Asda, I had the pleasure of listening to a presentation by the CEO of Stu Leonard (a US dairy supermarket, located in Connecticut with a reputation for legendary customer service).
He told a story about a customer complaining about the cream not being fresh. Stu told the customer it wasn’t possible, as the cream is made fresh in the dairy next door every morning, kept refrigerated and sold the same day. He went on to say he had never had a complaint before about the cream. The customer insisted the cream was off and reluctantly Stu gave the customer a $1 bill. The customer grabbed the bill and stormed off (without giving Stu the 5 cents change) saying “And I will never come back to this store again!”
Stu went “Wow. I gave the customer his money back but he’s still angry and I have now lost a customer.” This incident led to Stu developing 2 rules that were carved on a huge boulder and placed at the store entrance:
"Our Policy Rule 1: The customer is always right! Rule 2:
If the customer is ever wrong, re-read rule 1"
Eager to learn the lesson, Asda placed similar boulders outside its stores.
The presentation was full of examples of legendary customer service. One of the things that struck me most was almost a passion for encouraging customers to complain or to tell them when they were not happy. They strongly believed that it was only possible to solve a problem (& keep a customer) if you knew about it. All complaints were dealt with the same day and if necessary a new process developed to avoid reoccurrence.
This passion was picked up at Asda and CEO Archie Norman would personally read all customer complaint responses before they went out. Apart from finding out what the hot issues were for customers, if he wasn’t’ happy with your response you could expect a phone call!
Some might say that this strategy will just increase costs. It might, but this doesn’t have to be at the expense of greater profits. Overall, I believe that this strategy will significantly improve the business return on investment by:
It may be unrealistic to expect you to arrive at work tomorrow and shout at the top of your voice “Bring on the complaints!” But hopefully even if it starts as a blind date, in time, getting more customer complaints may develop into a long term passion!
Published 29th May, 2008
Need help to improve your internet marketing? Contact me...