If Complaints Are Gifts, Why Do So Few Companies Accept Them Graciously?

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The concept of “a complaint is a gift” is based on the rationale that when customers complain they are giving the company a second chance to recover the service or product failure; the customer is telling them what is wrong in the hope that the problem will be fixed and they can remain happy customers.

The great thing about complaints is they are a barometer of how a company is doing in the eyes of the customer, a rich source of information and to find out what’s broken and what needs to be fixed. An easy concept to understand but one that rarely seems to be evident in today’s market place.

As consumers, we have all encountered the frustration of complaining. Pretty much every time I’ve complained to a company I’m annoyed of having to explain the problem to half a dozen people – every time I’ve called back to check on the status I’ve had to explain the problem all over again. I continually wonder why it’s up to me to call in to get an update in the first place; surely if they valued my business they should be following up with me!

In the end it isn’t so much the original issue that is the problem, we can all accept that things go wrong from time-to-time, but how I am dealt with is what really riles me.

We enter into these interactions hoping the company will sort out and solve the problem. But what generally happens is we have to fight tooth and nail to get the problem resolved, when all we really want is someone to listen, take responsibility for the issue and, just as importantly, make sure it doesn’t happen again.

What I think organizations don’t necessarily understand is the damage being done by simply not dealing with complaints properly. Companies seem to be so focused on solving the complaint with minimal effort that little attention is given to understanding whether the customer was happy with the way their complaint was handled and how this could impact the future of that customer relationship.

There are many references in the market and industry studies that demonstrate the impact customer service has on customer behavior. As an example, a company with 500,000 customers that gives poor customer service, making no effort at customer retention, will have to find a new customer every two minutes of every day of every year just to stand still.*

A frightening statistic and an even more frightening prospect.

So it seems to me that companies need to stop thinking about complaints as a nuisance and a drain on resources and instead view them as an opportunity to take control and manage their relationships with the precious resource — their customer base. The other option of course is that the customer takes their hard earned dollars to the competition!

Complaints really are a gift and it’s about time that companies started accepting them!

*Based on the findings of Stauss and Seidel, Complaint Management: The Heart of CRM

Richard Morrison
CDC Respond
Richard Morrison, Respond general manager, CDC, has more than 25 years of experience with enterprise software companies, focusing on sales and channel development. He has also held senior management positions in strategic business development and sales for a number of international software companies, including AIT and IMA.

6 COMMENTS

  1. Great point about “complaints are a barometer of how a company is doing in the eyes of the customer, a rich source of information and find out what’s broken and what needs to be fixed”. What seems to be missing in many companies is a well-managed process for embracing customer complaints. RMA (returned materials authorization) is typically well thought out and managed, but somehow non-tangible complaints aren’t. One of my favorite quotes is “Good news is no news, No news is bad news, Bad news is good news” (Jim Morgan, Chairman of Applied Materials). Complaints would be a great thing for brand managers to step forward and own, as early indicators of delivering the brand promise.

    Lynn Hunsaker, http://www.ClearAction.biz, mentors executives for superior customer profitability by preventing customer hassles and churn.

  2. Richard

    Great post.

    A complaint really is a gift. It:

    1. Gives you a chance to recover a potentially lost customer, along the lines of ‘if you can’t get it right first time, get it righter the second time’
    2. Gives you the chance to find out what isn’t working in the customer experience, from the customer’s perspective.
    3. Gives you the chance to fix the problem at its source, so that it doesn’t trouble customers again.

    As Bernhard Schindlholzer in an earlier post about ‘The Service Recovery Paradox’ suggested, well recovered complaints can in some circumstances lead to increased customer satisfaction, increased customer loyalty and by implication, increased customer profitability.

    And fixing broken processes that generate complaints leads to reduced operational costs as the ‘cost of quality’ associated with both the broken process and with complaint handling is reduced.

    A complaint really is a gift. But it has to be handled intelligently if you are to gain any value from it.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Further Reading:

    Bernhard Schindlholzer
    The Service Recovery Paradox: Increased Loyalty Through Effective Service Recovery
    http://www.customerthink.com/blog/service_recovery_paradox

  3. Good point and great quote. The quote you referenced by Jim Morgan, Chairman of Applied Materials, obviously is a person who “gets” the profound impact customer feedback can have on a company’s reputation and bottom line as do you. I personally can identify with his quote as others may too. Fortunately some customer focused companies have jumped on board right away to make changes and process improvements to protect their client base. Those that lag behind may find they have waited too long and are at risk of losing some of their loyal customers base to their competitors.
    Rich Morrison

  4. Richard…. I can certainly agree with some of what you write. I’ve been involved in complaints management and research for many years and I have absolutely no doubt that companies ‘get it’. They DO understand intuitively how important it is to deal effectively with customer complaints. After all, companies are composed of people many of whom will themselves have complained in the past and know how bad it can be to be handled poorly at that very sensitive time.

    Best practice complaints handling, as defined in the international standard ISO 10002, requires companies to follow up after a complaint has been handled to find out what impact the episode has had on the customer’s justice perceptions, buying intent and word-of-mouth intent. This is the test that most companies fail. In my work I often encounter companies that act with good will when they receive a complaint. They mean to handle it well, but because they don’t survey complainants after the file is closed, they have no idea whether they do. Indeed some make such a hash of it that the customer is even more disenchanted.

    Readers who want a solution to this problem might like to look at the solution available at the link below. The survey tool is a fully-outsourced, technology-enabled way of finding out what customers really feel about their complaint experience.

    http://www.listeningpost.com.au/Default.aspx?tabid=60

    Francis Buttle, PhD
    The Customer Champion

  5. Good point and great quote. The quote you referenced by Jim Morgan, Chairman of Applied Materials, obviously is a person who “gets” the profound impact customer feedback can have on a company’s reputation and bottom line as do you. I personally can identify with his quote as others may too. Fortunately some customer focused companies have jumped on board right away to make changes and process improvements to protect their client base. vrouw zoekt man

  6. Quite true, consumer complaint are gifts for the companies, but most of them don’t see it that way.

    Companies don’t give complaints a first priority to solve, sometimes not even the last. The customer is ignored till he gets frustrated and leaves for the competitor.

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