Customer feedback is increasingly important for both start-ups and established companies. But what if instead of showering you with praise, your customers hail you with complaints? Many companies are still unsure about how to deal with negative feedback. But they show more concern than there need be. Sure, a complaint email is alarming. That is obvious. Nevertheless, a customer’s reaction shows interest in the company and its business. In the worst case, a dissatisfied customer turns away completely without informing the company of his criticisms. In the best case, a complaint can become a catalyst for relationships and deepen and strengthen the relationship between the two.
A disappointed customer is emotionally charged and wants to let off steam, no matter which way. Their emotions make sparks. A smoldering fire can quickly become a wildfire. Companies that do not pay attention to the needs of their customers are thus faced with the problem of not being able to keep existing customers. This not only costs time but also valuable resources. Anxiety-free and empathetic listening is one way to deal with negative feedback.
What are Customer Complaints?
Complaints are usually caused by one or more errors in the company – regardless of whether they actually exist or arise only from individual perception. A complaint expresses dissatisfaction with a customer, supplier, or business partner. The individual expectations for a product or performance of the company have not been met. You are disappointed. So it is no wonder that for many companies, the word “complaint” often has a bitter taste. But complaints also have the potential of the valuable messages they carry in them.
A customer usually invests valuable time in his or her feedback. Strategic complaint management is thus an additional service that the company can provide to make it as pleasant as possible for the customer. Similar to an entrepreneur, the customer weighs up the effort and benefit of his action. If he considers the usefulness of his complaint to be higher than the time and costs to be spent on it, he decides to appeal. This can be in the form of an e-mail, a call, or in person. In most cases, the complainant’s feedback has a specific objective. He wants the company to
- correct the error
- take a decision to improve
- reimburse expenses and compensate damages
- apologize for inappropriate behavior
This gives companies the opportunity to revise their products, services, and processes in such a way that not only the current customer but also future consumers are satisfied.
In general, the following applies: It is more cost-effective for companies to retain existing customers than to find new ones. Forward-looking companies are therefore re-prioritizing and investing in retaining their customers who complain. At the same time, they are aware that companies that handle their customers’ complaints competently, quickly and in a friendly way usually gain a loyalty advantage. In doing so, they are laying the foundations for a large number of otherwise-complaining customers that will continue to order from them in the future.
When Expectations are not met: The Most Common Causes of Customer Complaints
Customers always have certain expectations of a company, their service, or in how they help – be it professional advice, individually designed services, or low waiting times. Often, the experience they already had with the company and its services or the current needs of the customer determine their expectations. Furthermore, testimonials from acquaintances and friends as well as the communication culture of the company are important factors for the detailed expectations a customer develops.
Customers often feel disappointed when:
- they call and have to wait a long time “on hold” in the queue
- the ordered product or service is defective
- their desired product is sold out after a short time
- the product has been described differently than the customer perceives, in reality,
- an incorrect product or service has been delivered
- delivery or performance is delayed
- employees of the company are unfriendly or simply “process” the customer
Watch out! Companies have an impact on their customers’ expectations. They move on thin ice when they promise things in their marketing activities that they may not be able to keep. Companies that throw superlatives around should also be able to keep these promises. Certainly, such claims as “best prices,” “no waiting times” or “the biggest choice” generate attention. At the same time, a company sets the bar for its performance accordingly. If the customer’s expectations of the performance experienced are disappointed, dissatisfaction arises with him.
Eight Tips and Tricks to turn Customer Complaints into Revenue
Don’t be afraid of customer complaints; companies that have been able to successfully help customers with a complaint experience a positive impact. Usually, these customers then recommend the company to friends and family rather than customers who were satisfied in advance. Conversely, a customer whose complaint was not resolved can cost many more customers, or rather, potential customers. But customer complaints need not spell out a company’s demise. Rather, they make the company’s mistake visible to the public – but it is not this alone that discourages companies from responding constructively to complaints. It has more to do with the negative image that companies associate with having their mistakes made visible.
There follows a number of tips for successful complaint management. This allows companies to turn the unwanted misstep into a successful milestone while increasing their revenue:
1. Listening – paying undivided attention to the customer
Close your ears and power on through regardless? The angle of view you take on a complaint determines the course of the further customer relationship. Companies that listen to the opinions of their customers with open ears and eyes instead of putting on blinkers can retain customers long-term. Effective complaint management is essential. The complaint conversation is, so to speak, the invitation to the first date – from which a long-term faithful partnership can develop. In exchange, companies get direct contact with the customer, which is otherwise often difficult to manufacture.
It is only through their willingness to communicate that companies can erase initial doubts about their competence. Professional communication is reflected through continuous contact with the customer. Companies may maintain this contact through interim reports in the form of update emails or newsletters, appointment suggestions, or information about additional services that cost nothing.
“Listening is an active act of creation.”
– Andreas Tenzer, German philosopher and educator.
The rules for the first date also apply to the complaint conversation. Because first and foremost it is about being seen. For the customer, this means that he wants to be perceived with his request. A quiet atmosphere without interruptions relaxes and creates confidence. By no means should the customer feel inhibited or pressured. Companies that take time for their customers instead of relying on speed dating win additional loyalty points. A personal address shows appreciation and interest in the other person. Because nothing is more embarrassing than confusing names on the first date or feeding the other person with simple, empty phrases. Listening and empathy is the magic formula.
“As long as you are talking, you don’t learn anything.”
– Marie Freifrau von Ebner-Eschenbach (1830-1916) Austrian aphorist, narrator, novelist, writer
Listening means taking part, also in a literal sense: I accept the parts you give me. Participating requires real interest and a heart that turns to. Listening has long since become an important professional key qualification. Because employees who do not listen properly to their customers risk not only misunderstandings but also time, money, and a previously good relationship.
It is not only a question of what is said but also of how something is said. Because only those who read between the lines can correctly assess what has been said. Often the intention of the customer can be derived from body language, gestures, facial expressions, or tone. When employees pay attention to these customer signals, communication is often much easier and more fluid. Behind this lies the psychological phenomenon that interlocutors who hold a similar opinion take a similar posture. The more passive the posture, the more the potential for aggressive action decreases.
2. Speed – don’t let the customer wait
Thanks to the digital age, there are now marketing channels with unprecedented reach: Facebook, Twitter and and the like spread news in real-time, both positive and negative. Companies that respond particularly quickly to complaints positively impress their customers – companies should respond to complaints within 24 hours of receipt. Often it suffices to point out that the company will take care of the problem and contact the customer. On the Internet, speed means competence. If a company responds to a customer complaint faster than expected, complaint satisfaction arises.
3. Solution-oriented – involving the customer
Why not ask the customer for advice? It is highly recommended to ask the customer for a solution. Many customers have thought hard and developed a clear idea of what compensation might look best.
4. Exceeding expectations – surprising customers
Many customers who complain only expect their problems to be solved. Companies that want to be ahead of their competitors not only solve the problem but also surprise their customers and offer them an additional advantage. This can be a giveaway or a voucher for the next purchase. What counts is the ideal factor. Small gifts are symbols of reconciliation and subtly show the customer that the company takes their complaint seriously.
5. Reworking processes – customer complaints provide insights
Complaints provide companies with important insights into their processes and services – this is because customer feedback helps to identify your own weaknesses in the company. If certain complaints accumulate, a pattern in the company seems to be hidden behind it. At this point, companies have the opportunity to use complaints as an opportunity. The company can evaluate where in the organization the problem occurred and find solutions to fix it and improve operations. This prevents similar complaints in the future. The improved processes can also reduce the costs incurred in running the company.
6. Communicate success – publish customer feedback
A customer whose complaint has not only been successfully resolved but has also contributed to the process improvement in the company should be encouraged to report it. Companies that give their customers the incentive to report on the positive experience among acquaintances may gain new customers. Recommendation marketing is the most effective form of revenue growth. Clever companies take advantage of this opportunity and publish the customer’s opinion, for example, on the company’s website, and on social forums.
7. Fix deadlocked situations
An additional person can often relax deadlocked situations. Often this is an employee of higher rank who resumes the thread of conversation and can create a new start. A neutral person brings with him the chance to re-prepare the course of the conversation so far and to summarize it on a factual level. In this way, the concern of the complaint is once again clearly visible and emotionally free of value. A third person is often perceived as a neutral entity that weighs the arguments of both sides and can work out a workable solution to the problem. The addition of an executive can thus give the customer the feeling of being taken seriously with his complaint.
8. Admit mistakes and apologize
Many companies are hesitant when it comes to admitting a mistake, but this is exactly what scores points with the customer. Many customers are just waiting for an apology and recognition of their complaints.
An apology is worth gold. That’s according to a study by The Nottingham School of Economics. As a result, customers are more willing to forgive a company for making a mistake if it apologizes than if it offers financial compensation. According to the study, almost half of customers withdrew their negative judgment about the company. On the other hand, only 23 percent of customers did so after financial compensation.
Identify Causes of Customer Complaints with the Net Promoter Score® (NPS®)
Companies that want to retain their customers should leave their comfort zone and actively demand customer feedback. Those who hide lose valuable information. You don’t have to suffer a hailstorm of complaints to realize that a company’s customers are dissatisfied. Customer satisfaction and loyalty are measurable. The Net Promoter Score (NPS) i is an important metric for this. It describes how satisfied the customer really is with the company or product.
To determine the NPS, the customer is asked to indicate in a one- to two-minute survey how likely they would recommend the company or brand. A value of ten points is very likely. The respondent awards zero points if he would not recommend the company or his business at all. Afterward, the participant has the opportunity to justify his answer.
Depending on the rating, respondents can be divided into three groups:
The detractors (values from 0 to 6) are critical of the company or brand. They tend to negatively affect existing or new customers and would rather discourage potential new customers from relying on the company. They are the potential complainants with whom it is worth getting in touch.
- Indifferent customers
Indifferent customers (values from 7 to 8) are rather indifferent to the company and without internal participation. Due to their lack of conviction, they have no motivation to attract new customers.
Promoters (values from 9 to 10) are the proponents of a company. With them, it not only crackled but also sparked. You decided on a long-term relationship after your first date with the company or its product. Due to their loyalty and commitment, they are ideal advocates for the company and are ideally suited to attract new customers.
Following the survey, the percentage of detractors, indifferent customers, and promoters is calculated. The NPS® is obtained by deducting the percentage of detractors from the proportion of promoters. The score can be between -100 and +100. The higher the value, the higher the customer satisfaction. For many companies, the NPS® is an important tool to track down blind spots and customer requests in time before a relationship crisis occurs.
Customer complaints are no reason to put your head in the sand. Companies that have recognized this can gain valuable information from their customers’ feedback and thus increase their revenue. With fast, sincere, and solution-oriented communication on an equal footing, they can already eliminate the customer’s first doubts and help establish long-term customer care.
Tags: Customer Experience