By Dan Clay
One of our biggest responsibilities in customer service is resolving customer complaints. Many complaints are constructive customer voice, and some are more ‘noise’ than representative challenge. But in either case, it’s our job to react and it’s our challenge to recover that customer’s loyalty.
The stakes are high: escalated complaints cost a lot (in terms of staff time and customer compensation) and the rise of social media means these complaints can quickly reach the masses. Thankfully, there are simple steps you can take to get ahead of complaints and save money resolving them. To help here, I thought I’d tackle the two most common questions CCC gets about complaints:
- How do you define a “complaint”?
- What’s the best way to respond to a complaint?
How do you define a “complaint”? I feel about “complaint” definitions the way that a football scout feels about linemen recruits or Murphy Brown feels about shoulder pads – broader is better. You should expand the definition of “complaint” to broadly incorporate even customers who are potentially dissatisfied. To explain, a complaining customer may have already passed the proverbial point of no return, and it is costly and difficult to recover that customer’s loyalty. Progressive companies get ahead of the actual disloyalty by defining complaints as statements that indicate a customer is “at risk” of defection.
A great example of this comes from an internet service provider that proactively reaches out to customers who use “trigger words” in post-call survey verbatim which indicate dissatisfaction (such as “frustrated” or “unresolved”). It’s a great example of a company expanding their definition of “complaint” to capture customers early—when it’s more likely to recover their satisfaction. By doing so, this ISP reduces customer churn by 33%. (An interesting lesson learned: they found that reaching out to customers who had logged an official complaint was actually counterproductive, and the key was capturing customers before the complaint.) CCC members can learn more here: Using Customer Verbatim to Recover At-Risk Customers.
How do you respond to complaints? Typically, complaint resolution processes involve costly remuneration processes. Thankfully, CCC research suggests that dissatisfied customers are less Cuba Gooding and more gracious grandson – for them, it’s the thought that counts. It is the gesture of a company response rather than the size of remuneration that recovers customers. As an interesting anecdote, I spoke with one Canadian financial services company that cut their “goodwill fund” used to salvage complaining customers in half and saw no impact on customer loyalty or likelihood to defect.
So, in short, you should expand what counts as a ‘complaint’ and reduce how much you spend to respond to that complaint. Reach more, capture early, but give less. Does this sound like a viable strategy in your environment?
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on April 29, 2010
Respond
Customers consistent and absolute requirements of us when they give us a complaint are:
1. Say sorry. Recognise we have disadvantaged them and this is best delivered with a straight forward and sincere apology.
2. Take ownership for resolution, set the expectation of what we will do (create the promise) and then deliver on this.
3. Don’t offer money/goods in kind……what customers want is us to invest our funds in getting it right first time. The more money we give away the less we have to invest in doing it right first time, is the logic our customers apply. Yes there are a few who will chase for “compensation” but in our experience these are a small % of the total. As long as you go that extra mile to demonstrate you really understand that you got it wrong, you’ll classically turn them from critics to apostles.
on April 29, 2010
Respond
This looks B2C oriented. Is there a belief that this holds true in a B2B environment?
on May 3, 2010
Respond
Donna – great question. While the specific examples are B2C, I certainly think the key conclusion is equally relevant for B2Bs: (1) reach customers who are trending toward disloyalty before they explictly complain (and, if the customer has an unresolved issue, follow the first and second step that Phil posted above) and (2) limit what you give, because it’s the thought that counts (and remind the customer that you’ll work to get this right the first time in the future, as Phil mentions in number three above). Certainly, in a B2B environment, some orders or issues will be mission-critical (and delayed resolution might mean the customer can’t conduct business), but I’ve spoken with several B2B members who actively get ahead of complaints about, for example, a late order. They’ll proactively contact customers, apologize, and then find out what elements of an order are truly critical and expedite just those parts, thereby reducing the amount they spend on overnight shipping and account credits. If these companies waited until after customers complained about the late order, the customer probably would be less willing to compromise on what gets expedited.
Many B2B members wonder how important it is to recover the loyalty of their individual contacts, given that oftentimes these contacts are far removed from the financial decision-maker at the customer organization. Interestingly, CCC research finds that the biggest driver of B2B customer repurchase and share of wallet growth is internal word-of-mouth about the service experience—in other words, the word-of-mouth that service’s day-to-day contacts spread to that customer’s financial decision-maker. Staff word-of-mouth influences loyalty more than product satisfaction, company reputation, or any other non-service element. So it’s absolutely critical that we get ahead of any dissatisfaction before it ‘trickles up’ to the financial decision-maker.
Does this answer your question, Donna. I’d also throw it out to other readers – how do you best respond to (or get ahead of) complaints in a B2B environment?