Are you getting enough customer complaints?

That’s right. Are you getting enough customer complaints?

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.

It’s the silent ones who really hurt your business

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.

How much is a happy customer worth?

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.

Brand advocate to brand terrorist

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.

How First Direct stopped me from becoming a potential brand terrorist

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:-

  • 11 + years of my business
  • countless referrals through my advocacy
  • the impact of potential brand terrorism

Rule Number 1: “The customer is always right”

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.

Develop a passion for customer complaints

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!

What can you do to get more complaints (feedback)?

  • If you want to get more sales make it easier for customers to complain or to tell you how to do better?
  • Have highly visible signs or employee badges that encourage customers to “Shout if they are not happy” or to “Tell us if we could do something better”
  • Have suggestion / complaint pads in prominent positions (even web sites)
  • Incentivise / reward customers for great ideas / complaints
  • Encourage the customer facing staff to ask “Can we do anything better? Are you coming back?”
  • Have a simple complaints policy and offer a strong guarantee
  • Disagree with the customer at your peril
  • Apologise and be eager to find out “How can we do better?”
  • Compensate customers for their inconvenience - try and find something that may be low cost for you but have great value to the customer
  • Is it worth losing £150,000 over 5 years for a 50p pot of cream?
  • Make sure all staff are treated well, motivated and fully trained to handle customer complaints in a positive way
  • Deal with all complaints the same day
  • Have an effective monitoring system that highlights trends to try and avoid future problems before they occur
  • Follow Stu & Archie’s example and make sure that complaints are “seen and owned” by the MD / CEO

What about return on investment?

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:

  • highlighting problem areas and reducing associated costs and causes of dissatisfaction
  • identifying areas of improvement in product, services and satisfaction that lead to: more customers; coming more frequently; for longer (less attrition); spending more; and more referrals

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!

 


Tags: Grow customer lifetime value ROI

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