Customer Complaints: How to Handle Them and Keep Customers Happy

"The girl was rude to me."

"The delivery promised for Tuesday didn't come until Thursday. What's going on over there?"

Does this sound familiar to you? Do you hear this every other day, or every day? Customer complaints. Perhaps you grew sick of them long ago, and stopped listening. Better change your habits. Complaints are valuable. They come from customers who are trying to help you with your business.

Chicago retailer Marshall Fields once said, "Those who buy, support me. Those who come to flatter, please me. Those who complain teach me how I may please others so they will buy. The only ones that hurt me are those who are displeased but do not complain. They refuse me permission to correct my errors and thus improve my service."

Studies conducted by universities, industries and government have shown that customers whose complaints have been resolved will bring in more revenue than they ever cost. A satisfied customer returns and buys more, and refers more new customers than one whose complaint went unresolved.

A study by the Technical Assistance Research Programs Institute pinpoints three findings about customer complaints:

"1) The average customer with an unresolved complaint will tell nine to 10 people; 13 percent tell more than 20 people.
"2) Up to 70 percent of complainers will return to your business if the complaint is resolved. Up to 95 percent return if the problem is resolved quickly.
"3) For every complaint received, the average company has 26 unhappy customers it never hears from; six of these customers have problems that are considered serious.

Consider this: For every customer who complains, 26 remain silent. Five complaints a week means there are 130 dissatisfied, disgruntled ex-customers out there that you never hear from.

What if no one's complaining, is it then time to relax? Not according to Jeanne Rinaldo, VP of relationship management at Integrated Loan Services, a member of the Fisery Lending Solutions Group of Connecticut. "In my experience," she says, "I've found it's foolish to assume that silence from your customers is a good thing. It's the quiet clients who leave. They're the ones who don't make a fuss about problems - they let their complaints build up to the point that they think it's easier to leave than attempt to fix all that's wrong."

Many people don't complain, they don't believe in it, they hate to listen to others complaining, and they detest listening to themselves. When the waitress comes to their table and asks, "Is everything all right?" they smile and say "Fine, fine." But next time, they go to another restaurant.

"I call it the 'accumulation of silences,'" Rinaldo says. "This comes from all the times that a client experiences a problem and chooses not to say anything about it. Once those silences build up, anyone who asks an innocent question like 'How's it going?' is likely to unleash a floodgate of complaints that no one can fix because the situation's gone too far. "

If your business receives few complaints, now is the time to do something about it. You may think your customers are totally satisfied if they don't complain, but the opposite may actually be true. Customers may refrain from complaining because:

o They simply dread confrontation and avoid it whenever possible. They assume, because it has happened to them before, that it will result in an argument and nothing being done.

o They are procrastinators, who allow problems to accumulate until they become angry and decide to do something about it. That "something" may be unloading on a competitor, another of your customers or worse, a potential customer. Get to them first, before the flood comes.

o They believe that this is an ongoing problem, that you have received many complaints about it and have done nothing, so what's the use?

o They are busy people and thus seek the easy way out: another vendor.

Complaints may come to you in the form of a letter, phone call or email, but most of the time, customers gripe to the staff. "I've waited here too long." "You are too slow." "Can I get some help here?" Since staff receives most of the heat, a manager should make sure they are trained to cope with the onslaught, and encouraged to follow these simple rules:

Make them a priority: Complaints are so important to your business that customers should be encouraged to complain. Many people will not, instead they will simply go elsewhere, and your sales may decrease, you may even be forced to close, without ever knowing why. Invite customer complaints whenever you can.

Plan for Them: Anticipate what's coming, and be ready when it does.

Be professional: A positive attitude is called for here. Instead of worrying that you might lose this order, concentrate on preserving your relationship with this customer. Speak in terms of what can be done, instead of what you cannot do for them. If you believe the customer's satisfaction is your satisfaction (and it is) you will regard the problem as "ours" instead of "yours," and that will, or should, guide your conversation.

Take responsibility: If you don't use comment forms or cards with your toll-free number and name on them, start now. Make sure that you at least know about all complaints and track them yourself. Ideally, all complaints should come to you. Put yourself in the customer's place: if you were making a complaint, who would you want to talk to?

Assure the complaining customer that they have reached the right person, that the "buck stops here," and that their problem will be investigated until resolved to their satisfaction. Don't blame customer service or shipping or anyone else and don't tell "little white lies" in an effort to placate the customer. NEVER promise what you know you can't deliver - that's the sure way to fiscal suicide.

Offer a solution: Make the customer a partner in this process. Suggest a solution. If the customer doesn't like that one, offer another. Ask questions until you have discovered the solution that best fits the customer's unique needs. Set a timeline, and if problems crop up that will delay the solution, let the customer know.

Compensate: For their inconvenience, customers with legitimate complaints should be compensated for their inconvenience. Give them a discount on their next order, a small gift, or a cash award, and be sure to thank them for helping your business improve.

Fix What's Wrong: Complaints can reveal important weaknesses in your procedures. Follow up - get it fixed - so the same problem doesn't keep reoccurring in the future.

"But I don't have time for all that," you might protest. Wrong. You do have time, you're just using it for something else. Something not nearly as necessary, or as important as keeping your customer happy with your performance. Find these things and weed them out. There's your time!