How Customer Complaints Can Improve Customer Service

All real relationships come with positives and negatives. Customer relationships are no different, and customer complaints can be used to better your business. If you want an interactive relationship with your customers, you've got to be willing to hear the good, the bad and the ugly from your customers. Did I say 'willing to'? I should say, you must actively seek out, solicit, invite your customers to provide feedback!

And let's think about what the most useful feedback is. Positive customer feedback is always good for the morale; it helps keep you going and let's you know the type of things your company should continue doing. It's certainly a 'nice-to-have.' Negative customer feedback, i.e., customer complaints, are the 'must haves' ' the real gift. They let you know specifically what went wrong, what made a customer upset, and where there are opportunities to make your products, services, or customer service better.

Most small businesses do not have the resources to have a 'Mystery Shopper' or secret agent who can provide you objective, direct feedback on the businesses and customer service. Surveys can help, but many times respondents to surveys do not have specific, time-sensitive examples of things your company could or should fix.

But effectively addressing customer complaints can lead to significant improvements in your bottom line, especially given that it costs on average five times as much to acquire a new customer as it does to retain an existing customer. Even small changes in customer service can improve retention, and make a big difference.

In our multi-channel world, customer complaints can come from a number of different places and your complaint resolution process should be developed accordingly. Below, I'll offer some advice on how to address complaints coming from the three major sources.

Complaints coming direct to you or an individual representative of your company ' This could be face-to-face, over the phone or through an email. The point is it is a private conversation and you'll have more latitude on how to handle it.

1. Apologize as appropriate (acknowledge the individual's experience but don't go overboard, especially if you're not at fault).
2. Offer to make things right, and even offer small tokens of appreciation for the customer's business. You can even ask the customer what he or she believes is fair compensation. Many times, customers don't want a huge reward for their pain and suffering, they just want their problem solved by a kind, empathetic, empowered company representative. Offering just coupon of 20% off or a free service add-on may do the trick. If the complaint is more serious (and valid), you may consider additional measures.
3. Document your complaints (as well as your compliments) and look for overall trends to help guide your improvements in your products and services. Also watch out for chronic complainers or individuals who have had multiple problems that may genuinely require some special attention. You can use a more sophisticated call center management solution or you can even capture this information in a spreadsheet. The key is that you capture consistent categories of information in a searchable database that will allow you to easily view and analyze customer feedback.

Complaints coming direct to your company ' These could be complaints on your company's forum/blog/online community. These are directed to your company in general and are able to be viewed by others. These types of complaints need to be handled quickly.

1. First, try to get the customer to contact you directly to turn this into a private conversation. Then follow the advice in the section above.
2. If this doesn't work, acknowledge what the customer experienced (or at least validate their feelings about the experience) and see if you can publicly offer an acceptable resolution. Do not apologize profusely or give away an overly generous consolation gift in response. You do not want to encourage your customers to exaggerate their complaints in hopes of a similar payoff. Think of this as Crisis Management 101 ' immediately diffuse the situation, do not let it escalate or fester. Provide a quick, decisive resolution that will appease the customer without overly rewarding them.
3. Again, document and learn from all customer feedback.

Complaints on other sites ' We all know with limited resources, it will be impossible for small businesses to monitor every social and community site where a customer could potentially complain about your company. However, you should keep in mind a handful of online communities that your customers primarily visit.

1. Keep a close tab on the conversations on these identified sites, not only to watch for complaints, but also to learn from forums of your customers talking about their needs and pain points.
2. Address public complaints as instructed the section above. Remember if you get a serious complaint, you should jump in immediately to diffuse the situation with the facts or the corrective actions your company intends to take to resolve this.
3. Once you've directly addressed the issue, try to redirect a negative conversation to something positive ' perhaps provide some valuable advice or talk about some new enhancements or features that will be coming soon.
4. If the complaints are not severe, you may choose to let the community continue the discussion so you can learn more and save your interventions for when you really need them.
5. Document and learn. Document and learn. Document and learn.

The bottom line is, there needs to be a mindset shift about complaints. When a customer complains, they are telling you what went wrong. They are the voice of all the people who did not take the time and energy out of their day to give you valuable information. This complainer is not only giving you opportunity to save their customer relationship, but they are also giving you the 'gift' of knowledge that could save you from losing other valuable customers that may have the same issue.

What Next?

For more on how to build relationships and communicate with customers, watch this free recorded webinar hosted by Melinda Emerson, TheSmallBizLady.