Handling Customer Complaints is Critical for Business Success

Handling customer complaints is a critical factor determining the long-term success of your business.  And handling customer complaints quickly is more important now than ever before because customer complaints spread so quickly though social networks.

You work hard to attract customers — keep ‘em

When customers complain about your business, you have a small window to fix the problem or loose them forever.  Estimates suggest it costs between 4 and 6 times more to attract new customers than to keep existing customers.  Others cite figures as high as 10 times the costs of keeping an existing customer is closer to the actual cost of replacing that customer.  So establishing procedures to handle customer complaints should have a high priority and employees should commit themselves to implementing these procedures on a consistent basis.

If you want further evidence on how important it is to handle customer complaints, look at this from Gallup on the Constant Customer:

Today, the search for the ties that bind customers to brands has taken on fresh urgency. The equity markets are volatile and venture investors are chastened, so loyal customers represent a company’s best prospects for pumping capital into a business. Unlike stock appreciation, which can fluctuate wildly over the short and medium term, loyal customers can be counted on to build a solid base of revenues as well as to expand profits

Customer Complaints Damage Your Brand

When customers complain about you, those complaints can end up anywhere and stay online forever.  Sure, you can hire a reputation management firm or try to fix the problem in-house, but you’ll never get rid of the customer complain — all you can do is hope to dilute the effect of the customer complaint.

Not only will customer complaints filter to the top when customers search for information about your products and services, when customers complain in social media it forms a bad image of your product for everyone who reads the customer complaints.  You never enter their consideration set — the group of brands consumers view as possible solutions to their problems.  Instead, you end up in their inept set — those products considered to be shoddy or otherwise unsuitable alternatives.

Whatever image consumers form of your brand is likely difficult to change — even if that image is inaccurate.

The Best Solution is to Avoid Customer Complaints

Obviously, the best solution is to avoid customer complaints.  A service audit and developing service standards goes a long way toward eliminating customer complaints.

Sometimes, you can avoid a customer complaint.  In that situation, its important to handle the customer complaint as quickly as possible.  This means scanning your social media to uncover customer complaints and making efforts to solve problems quickly.  Using this advice, a student complained on the firm’s Facebook Fan Page.  Her complaint resulted in a call from corporate with an offer to solve her problem.  Instead of spreading her complaint, she posted an update praising the company for its prompt solution.

We had a similar situation last night with Cox Communication.  We attempted to switch from Verizon (where I’ve had numerous problems — but that’s another story for another time).  I wanted to switch and, seeing a booth for Cox Communication at Celebrate Fairfax, we stopped in.  Unfortunately, they had some problems with their phone center and 45 minutes went by.  We didn’t want to miss the Bangles, so we started walking out.  The sales person asked if she could walk with us and complete the transaction.  Not only did she make sure we got to the main stage in time for the performance, she invited us to enjoy the show from the Cox Communication booth overlooking the stage. We had great seats and we got a gourmet meal and bar to enjoy while we watched.

When I thanked the Cox Communication’s management for hosting us, they simply said they were happy to have us as customers.

Today, instead of Tweeting complaints about Cox Communication, I Tweeted a thanks for taking great care of us last night.  Instead of sharing my frustration on Facebook, I posted pictures from the Cox Communication VIP tent.  What a great experience and everyone wins.

Too often, businesses use box seats at sporting events and concerts or other VIP opportunities to host company management or managers from other firms.  It’s important to remember that your customers are your most important asset and, while employees should be invited to keep moral high, inviting customers pays huge dividends, too.

If I ran Cox Communications, I would use the power of social media to increase customer loyalty through events such as their VIP booth at Celebrate Fairfax.  I would host a contest on my Facebook Fan Page so that everyone who likes Cox was entered for a chance to watch the Bangles from the VIP tent.  I would post pictures from the event on the Fan Page.  I would invite other customers to post their own pictures from the event.