5 Ways Customers Can Sink Your Business

customers

A few years ago, a disgruntled customer took hostages at the Discovery Channel creating a crisis that ended in his death and created chaos for a Washington, DC suburb. All the media attention probably didn’t do the station’s marketing strategy much good either. Such an event leads other consumers to wonder what the station did to cause someone to be so passionate about the firm that they were willing to kill and die for their beliefs. This doesn’t make either viewers or advertisers very comfortable and it’s just one way customers can sink your business. Albeit, a pretty extreme way customers can sink your business.

customers can sink your businessCertainly, not all customers go to such extremes to voice their dissatisfaction, but there are a number of strategies they might employ that cost you time, money, customers, or other valuable components necessary for your business to be successful. And most of the ways customers can sink your business are perfectly legal, so you have little recourse against the customers or their tactics that damage your reputation or gum up the works for your business.

The only way to stop such actions, call them acts of terrorism or simple retaliation, is to ensure customers are satisfied with your products and services, handle customer complaints quickly and effectively, and modify processes to reduce the number of complaints against your business in the future. Very few service failures have a higher “piss off” quotient than when a customer encounters the same problem that caused their initial complaint.



A word about the “piss-off” quotient

Over my 20+ years as a marketing professor, I’ve developed a term I call the “piss-off quotient” to highlight the importance I attribute to customer dissatisfaction. Marketing textbooks stress customer satisfaction, and this is an important outcome of a successful marketing strategy. But, satisfied customers don’t necessarily recommend your business to others, nor do they always return to patronize your business again.

Meanwhile, dissatisfied customers are likely to create a series of problems for your business, and pissed-off customers may ultimately sink your business. Pissed-off customers not only complain, taking up your valuable time and resources to address their concerns, they tell anyone who will listen about their poor experience. This is why negative word of mouth travels 5 times faster (and farther) than positive word of mouth.in the news: marketing strategy

So, let’s take a look at what pissed-off customers do to cost you.

How customers can sink your business

1. Change vendors

Dissatisfied customers change vendors — they don’t frequent your service or buy your product anymore but support your competitors with their dollars. Obviously, this reduces your profits and, if enough customers decide they don’t like your business, your business fails. While this may sound bad for your business, quietly taking their business elsewhere is probably the LEAST devastating thing disgruntled customers can do.



2. Complain/ receive satisfaction

If you’re lucky, customers complain to you and give you a chance to fix the problem. When a customer complains, it gives you a second chance to get it right and may redeem you in the customer’s eyes. Fast recovery from failure and constant communication are the keys to success here, so ignoring complaints just makes things worse.

employee burnout

I often use the case study of Club Med in presenting this concept to students. In this case, Club Med faces a plane full of unhappy customers because the plane was delayed (cutting into vacation time), didn’t load sufficient meals to satisfy demand (leaving lots of hungry passengers), and there were a bunch of lawyers on the plane. Even before the plane landed, Club Med officials were warned that disgruntled passengers were joining a class-action lawsuit potentially being filed by the lawyers on board. Club Med warded off a lawsuit by meeting the plane and providing extra attention to the passengers, including a banquet, a mariachi band, and limos to the property rather than the bus paid for as part of the package. Club Med did this despite the fact the plane didn’t belong to the organization but was the property of and operated by an independent firm. Because of Club Med’s quick action, many of the unhappy passengers left at the end of the week feeling they had the best vacation of their lives.

3. Complain/ no satisfaction

When customers complain and don’t feel they’re getting satisfaction from the company, they become pissed off and their complaints likely escalate. This has 2 negative effects on your business — on your other customers and employees.

The effect of a complaining customer on other customers can be very serious. First, customers may see the confrontation between the disgruntled customer and your employees or overhear strong words between them. Even second-hand, complaining leads otherwise satisfied customers to be more critical of their own experiences with your firm. This is particularly common in service venues where complaints happen in the clear view of others. For instance, when you overhear a guest complaining about a bad meal or that their hotel room isn’t cleaned properly, you have a tendency to re-evaluate your own attitudes toward the company.



The second effect is that employees can’t serve new customers because they’re handling complaints from existing customers. This increases the likelihood that discontent will spread as new customers are delayed while the employee attempts to diffuse the complaint. I once sat on hold for a long time to order a hotel van to pick me up at the airport. When I arrived, I found the only clerk on duty arguing with a guest over their bill, which is why he put me on hold in the first place. I was already unhappy that I’d been forced to pay for a taxi when I couldn’t get through to the clerk, now I was doubly unhappy as I couldn’t check in until the unhappy guest was handled.

Complaining customers also have a negative effect on employees. NO ONE likes to be yelled at, especially if they didn’t cause your dissatisfaction in the first place. Employees who routinely get yelled at are less productive, unhappy with their jobs, more likely to call in sick, and more likely to quit. So, keeping complaints from happening or handling them quickly also saves on the wear and tear experienced by your employees.

handle customer complaints

4. Negative word of mouth

Unhappy customers tend to tell everyone they are unhappy with a product or service. Dissatisfied customers remember product failures for a long time, so their discontent festers and they share the story of their dissatisfaction for years to come.

While negative word of mouth is bad enough, pissed-off customers may actively try to sink your operation. They may host websites or blogs to collect negative word of mouth and fuel discontent with your firm. Pissed-off customers might post their discontent to their social networks, which amplifies the message about their experience. Piss off influential customers and, with their extensive social reach, they can easily have a serious effect on your bottom line.

5. Customer retaliation

Customers have LOTS of ways to retaliate against your firm — all perfectly legal.

Do you really think all those burst catsup packets you see on McDonald’s floors were an accident?

Unhappy customers might fail to bus their tables at your fast food restaurant, throw all the toilet paper on the floor of your restrooms and lock stall doors, pay for items in the express lane with pennies, slow loading of your aircraft by standing in the aisles rather than putting carry-on luggage quickly into overhead bins … With a little creativity and American ingenuity, I’m sure your customers could think of hundreds of ways to retaliate against your company if you piss them off.

And, there’s nothing you can legally do about any of this. Yet, each retaliatory action costs you money, frustrates other customers, and leads to unhappy employees.



Fixing the problem — generate fewer pissed-off customers

If you don’t want to have customers sink your business, you must be proactive to avoid complaints and to handle the ones that do arise quickly.

Since service businesses are particularly susceptible to failure, it’s important to conduct periodic service audits to identify areas of potential failure. Once you know where your business is vulnerable, you can change processes to reduce the likelihood of failure. You should also develop contingency plans so that when a failure occurs that’s beyond your control, you can quickly mobilize to reduce the impact of the failure on customers.

For instance, an airline can’t do anything about bad weather. However, simply throwing up your hands when bad weather rolls in, causing flight cancelations, doesn’t cut it with customers. Instead, develop plans to handle this situation since weather problems arise frequently. Communication is key. As soon as you foresee bad weather impacting operations, communicate with passengers. That way they can remain in a more comfortable place until operations resume. At the airport, mobilize more staff to rebook travelers to get them on their way quickly. Share information with passengers frequently. I once sat at the airport for 8 hours waiting for my flight. We didn’t have any idea why our flight was delayed and others were taking off around us nor did we have any estimate of how long the delay would last. Very high piss-off quotient.

Here are some other tactics for diffusing complaint situations:

  • Encourage feedback from customers, listen to it, acknowledge it, and fix the problem. If a customer experiences a problem, it’s likely to reoccur. View customer complaints as valuable feedback to help you improve your performance.
  • The faster you handle a complaint, the less damage it causes.
  • Train front-line employees on how to respond to customers who have complaints. They should attempt to make customers whole when they are less than happy with the service.
  • Empower employees to fix problems. For instance, a hotel might keep gift baskets available. When a guest complains, fix the problem and offer them a basket as compensation. In many hotels, guests don’t pay for their rooms because they’re traveling for work so comping their room doesn’t create any compensation for them.
  • Under promise and over-deliver. Many service failures really come when customers have unrealistic expectations.
  • Most problems are process problems, so when complaints arise, search for causes and change your processes.
  • Don’t ignore drops in revenues. Rather than more advertising, the solution may be to create more satisfaction among your customers, handle complaints quickly, and reduce the likelihood of future complaints.

Conclusion

Customers have the ability to sink your business, potentially even causing it to fail. By avoiding customer complaints by instituting the right processes, handling customer complaints quickly and efficiently, and maintaining communication channels, you can avoid the most damaging effects from customers.

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