Explanation of Dealing with Customer Complaints by Ron Kurtus - Improve Your Business with Total Quality Management (TQM). Key words: product, service, satisfaction, repeat business, referrals, lawsuits, Ron Kurtus, School for Champions. Copyright © Restrictions
Dealing with Customer Complaints
by Ron Kurtus (revised 6 June 2007)
When a customer contacts your company to complain about a product or service received, it can be a blessing in disguise. For every person who complains, there can be hundreds who do not bother to complain but who also spread negative comments about your company.
In situations where customer complaints occur, the complaint must be dealt with immediately and the cause of the complaint rectified. Some companies are not concerned with quality and often ignore complaints or deal with them dishonestly. Seeking customer satisfaction benefits a company in the long run.
Questions you may have include:
- How should a business deal with a customer complaint?
- How do non-quality companies deal with complaints?
- What are the benefits of satisfying complaints?
This lesson will answer those questions.
Dealing with complaints
When the customer pays for a product or service, it is assumed that the product will work correctly or that the service received is as promised. Ideally, the customer will be satisfied, and there will be no complaints.
If there is a problem and the customer complains about it, your company should quickly answer the complaint and solve the customer's problem. This is often done through your company's customer service activity. But also, you need to follow up and improve your business processes to rectify the problem.
Solve the problem
You need to immediately answer the complaint and solve the problem. It may be to give money back, exchange a product or do some repair.
To make sure the customer is completely satisfied, some companies will provide some special service or a reduced price on another product. This is done to assure the customer will come back for more business. Many retail stores have a generous return policy to satisfy dissatisfied customers.
Unfortunately, there are dishonest customers who will make false claims to get some bonus. Some people will use a product or piece of clothing and then return it, saying they weren't satisfied.
High-end women's clothing stores often will have expensive gowns returned after some important event. The clothes have obviously been worn, but the customer says she is not satisfied or has changed her mind. Usually, the store will refund the money.
Since it is often difficult to tell if the complaint is valid or not, the company will follow the adage, "The customer is always right." But since some dishonest people repeat their crimes, a better adage is, "The customer is always right... once."
Price in customer service
When a company sells a product or a provides a service, part of the pricing should include the cost of servicing a certain percentage of defective products or complaints.
The second thing a company should do upon receiving a complaint is to seek to rectify the problem.
Although a company hopes not to get complaints, they often can be blessing in disguise. Sometimes problems can be caught and fixed before they cause serious negative feedback or even legal problems.
It is in the company's best interest to solve any problems and try to make sure that they don't happen again. It is foolish for a company not to use customer complaints to initiate a corrective action.
Not dealing with complaints
Businesses that don't bother about satisfying their customers usually get more customer complaints. Answering them can, of course, cost the company money. Some companies will try to mollify angry customers but many don't even bother.
Making money off complaints
One software company holds weekly staff meetings to build morale and allow for status reports from each department. One part of their meetings is the report on how many customer problems they rectified the past week. If the number increased, the group was given praise.
When asked why they praise increased problem calls, as opposed to working to fix those problems in the software or documentation, the owner said that they charge for each call, so it is a way to increase their income.
In other words, instead of making the customer completely satisfied with the product, they preferred some dissatisfaction, so they could fix the problem and make extra money from it.
This software package was a high-ticket, expensive application that was mainly sold to small companies. They also charged $50 for a user manual for the software.
Since the customers made a substantial investment in the software, they wanted to continue using it. But I wonder how much ill-will was created, even if the application usually performed well.
Complaints that fall on deaf ears
Have you ever experienced poor service or purchased a defective product and complained about it, only to have your complaints fall on deaf ears? Many companies that have plenty of business feel they dont need to bother with complainers.
These businesses become very independent, especially if they have a product or service in demand. Some continue to succeed, even though they ignore customer complaints, but many will pay the price of lost business and degraded reputation in the long run.
Apology mollifies customer
A company that responds and apologizes mollifies the complaining customer. But some of these companies never rectify the problem, like the hotel in the above story. The act of responding to the customer and apologizing is good business. Not fixing the problem is risky, though, and may backfire on the company.
Could be sued
The bug letter story originated some 30 years ago. In todays litigation crazed society, the hotel would have been sued for millions. Perhaps that is not so bad, if it is a case of ignoring problems. But if it was an honest mistake, such litigation can be destructive to the business as well as to society. We all pay more for things, because businesses must insure themselves against nuisance lawsuits.
Benefits of satisfying customer complaints
There are numerous benefits for a company to properly deal with customer complaints.
First of all, it will help to satisfy the customer, so you will get repeat business or referrals. In fact, in some cases, effectively dealing with a customer complaint can lead to a more loyal customer than others who may not complain or have problems.
Can rectify problems
Another benefit of dealing with complaints is that you can see weaknesses in your process or products that can be rectified. This will prevent possible future complaints or problems down the line. It is an effective form of customer feedback, although one you hope to eliminate.
Major concern about complaints
For every formal complaint you receive, there may be 10 other customers who were dissatisfied and who felt like complaining, but who never did. Instead, they change brands and tell their friends of the dissatisfaction. It is said that an unhappy customer will tell 13 people about his or her dissatisfaction1. That is not the type of word-of-mouth advertising you want.
The company goal should be to get no complaints at all.
Quickly and properly solving customer complaints can help your business grow and prosper. Ignoring complaints or dealing with them in a dishonest manner can result in loss of business or even lawsuits.
Provide the best service you can
Resources and references
The following resources provide information on this subject:
In 1974 the White House's Office of Consumer Affairs commissioned a report called the TARP study which included these statistics on customer complaints.The company doing this study—Tarp—has published other reports on customer satisfaction issues for both the Government and industry.
The "13 people" statistic is cited in a number of books on Total Quality Management, based on the original Tarp study.
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