Complaining has never had a positive meaning.  It comes from the Latin verb plangere which means “to hit”.  Today it means the utterance of pain, displeasure, annoyance and in legal terms, it is a formal charge or accusation.  No wonder nobody likes receiving complaints.  On the other hand though, complaints are the most direct way customers can tell organisations that their expectations have not been met.  They are an opportunity to learn about the ever rising expectations and needs of customers that might otherwise go unknown.  They are a source of marketing information.  That is why complaints from customers should be seen as gifts.  Think about it:  it is much easier for a customer to walk away and use other suppliers rather than complain and risk being treated rudely or not believed.  When customers walk away without saying anything, a company has virtually no direct opportunity to win back their good will and future business.

Let’s have a look at four basic points regarding complaint handling:

1. Customers rarely complain
In fact, only 4% of the unhappy customers will tell the organisation.  The other 96% will walk away spreading the negative word of mouth and change supplier.   People do not complain for a variety of reasons:  the perception that nothing would happen, fear, uncertainty as to where to go and complain, it’s confrontational etc

Sometimes I hear people say to me that they do not get a lot of complaints from their customers and they are therefore satisfied with the service experience provided by the organisation.  On the contrary, “One of the surest signs of a bad or declining relationship with a customer is the absence of complaints” Ted Levitt (HBR).

A very common reason for losing customers is the absence of complaints.

Bain & Co have said that “if you reduce customer defections by as little as 5 points-from say 15% to 10% per year-can double your profits”.

2. Most staff are worse at complaint handling than their managers realise
a. Apology. 
b. Rejection.
c. “Passed on”.
d. Beating about the bush.
e. Customer Interview.

Be aware that one or more of the above reactions to complaints might happen and that the impact created might be negative.  Research tells us that more than half of all the efforts to respond to customer complaints reinforce negative reactions.  

3. Reciprocity: using psychology to sell more when customers complain
Generally, human beings like to return the favour when something good is done for them.  Therefore, your customers can return the favour of service recovery by coming back thus creating loyalty.  As Jagdip Singh (Case Western Reserve University) put it: “The effective encouragement and facilitation of complaints…actually helps increase brand loyalty…”

Loyal relationships can translate into cost savings for your organisation.  Consider the cost of serving a long standing customer against the cost of courting  a new one. Across a wide range of businesses, customers generate increasing profits each year they stay with a company.  That’s because return customers tend to buy more from a company over time.  As they do, your operating costs to serve them decline.  In addition, return customers refer others to your company.  They will also often pay a premium to continue to do business with you rather than switch to a competitor with whom they are neither familiar nor comfortable.

4. Shifting our paradigm about complaints
What are the Golden Rules for handling complaints?  Here are some tips:
a. Say “Thank you”
b. Explain why you appreciate the complaint
c. Apologise for the mistake
d. Promise to do something about it
e. Ask for necessary information
f. Correct the mistake-promptly
g. Check customer satisfaction
h. Prevent future mistakes

If no one complains, there is little incentive for organisations to change their practices, products, prices, services, approaches of systems.  For businesses that need to be responsive to quickly changing market conditions, listening and rapidly responding to complaints helps the organisation stay in touch with customer expectations.  It is vital for everybody in the organisation to encourage complaints, accept them as gifts handle and manage them effectively thus creating loyalty and keeping up with the ever rising expectations of the customers.

For more information please contact me at: christina@peterandreou.com.