Customer Complaints: The Valuable Gift of Getting the Whole Picture


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Along with performance and loyalty metrics gathered through research, complaints are one of the best sources of customer data a supplier can have, yet most companies are getting half, or less, of the complaint picture. Their portion of the enchilada are the complaints customers post via telephone, mail, fax, and Internet. Suppliers need to have the whole picture, available through good research and analysis.

Nothing can be as effective as complaints at either sinking a sales, marketing, customer loyalty or service program or giving it new life. Complaints can be a positive or negative influence on customer’s word of mouth, as well as intention to remain loyal or to defect.

At a time when product and service loyalty continues to decline, consumer advocacy groups report that more than 50 percent of the buying public have problems or complaints with the products and services they purchase. Yet, it has been estimated that only about 2 to 10 percent of customers actually air their grievances to the supplier. Some industries experience notably high levels of customer complaint silence: financial services, food and beverages, pharmaceuticals, and high-tech. It’s been well documented why their customers won’t complain:

– They’re busy, and they can’t or don’t want to take the time
– The consider the complaint interaction a hassle and an annoyance
– They see no direct value or benefit to them in making the complaint
– They don’t think the supplier will do anything about the complaint
– They can get what they want from an alternate supplier, so they switch

Research by one company has found that over 40% of the companies in their business-to-business database who had a problem or complaint never informed the supplier about it. Their reasons for not expressing their complaints were remarkably similar to those given by consumers. We’ve seen other studies suggesting that, depending on the industry, unexpressed b-to-b complaints may range as high as 80% to 90%, so this is hardly an exclusive b-to-c issue.

Even though the rate of expressed complaints is higher in the business-to-business world, the lost revenue potential of unexpressed complaints is significantly greater there because of the lifetime value of each customer.

In the 1990’s, Banc One conducted a study of the loyalty leveraging effect of expressed and unexpressed complaints on its retail business customers. The bank found that about half of these customers had service complaints. Of those with a complaint, only about half had actually expressed them to bank employees. In other words, fully one-quarter of the complaint picture was missing. Further, those who had not expressed their complaints were far less likely to continue their relationship with the bank than those who had registered a complaint and had it positively resolved.

When customers do complain – through customer service operations like the Campbell Soup Company’s Consumer Response and Information Center (which takes more than 300,000 calls a year), or the General Electric Answer Center, which is open all day, every day, or by other means such as e-mail, faxes, or letters, or outbound customer complaint solicitation – as noted above, how the complaints are received and acted upon makes all the difference in their effect on customer perceptions and behavior.

The potential for complaints to negatively impact customers’ future purchase intent and recommendation should never be overlooked. In loyalty research for a b2b client, a major manufacturer of paper and related products, it was determined that close to 40% of their high volume accounts had serious performance complaints. These complaining customers were fifteen percent less likely to be positive about continuing to purchase from the client than those without a complaint. Other studies show similar negative loyalty effects of complaints.

Customers experiencing inefficient or insufficient resolution to complaints are not only less likely to repurchase or recommend from that supplier, they will spread their negativism – telling anywhere from two to twenty people about their experience in direct word-of-mouth, and significantly more via mobile devices and the Internet. And, as we’ve learned, the ‘long tail’ represented by negative online postings means that consumers will see opinions of ‘badvocates’ or a a considerable period of time.

With numbers and results like these, it’s little wonder that, left poorly handled or totally unresolved, complaining customers can sabotage even the most carefully crafted marketing or customer loyalty program. The incidence of poor customer service demonstrated by many e-commerce web sites has been actively reported in the media. Patrons will even set up their own web sites so other upset and former customers have a forum for their negative experiences.

So, having seen how complaints can hurt, how can complaints complement, and even enhance, a company’s customer loyalty, customer service, or customer experience management program? There are three ways:

– First, encourage customers to contact the company with questions, comments, problems, or complaints; and, make this as easy as possible.

– Second, identify the root causes of all complaints, registered and unregistered, so that their sources can be addressed and corrected.

– Third, enhance the effectiveness of problem and complaint resolution processes so that customers are provided sufficient contact venues.

There is a fourth method to consider when approaching complaint generation and management. And it may be the simplest, and most effective of all. Over the years, we’ve found that most companies, in their customer value/performance (transactional and relationship) research, fail to ask about complaints, either those that have been registered or those that haven’t. We strongly advocate doing this. Complaints, after all, are a different category of involvement with a supplier than just low performance ratings. They’re stronger. They’re certainly more consequential. If we can identify those complaints that have been registered and how they have/haven’t been resolved, and those complaints that haven’t been registered (and the reasons for non-registration), this represents a complete inventory and landscape of customer complaints. It sheds new light on the complaint process. Their specific potential effect on customer loyalty can then be modeled for prioritized action.

The lesson here, as has been proven again and again, is that when customers are encouraged to dialogue with suppliers if there are performance delivery problems or concerns, that opportunity for enhanced value provision actually creates stronger, more bonded and productive relationships between them.

Having a comprehensive database of the registered and unregistered complaints gives a supplier the entire spectrum of customer negativity, enabling corrective action to be much more focused and relevant. When this is combined with customer profile and contact data, and assessments of key elements of performance delivery, and metrics about intended behavior (advocacy level, brand bonding, likelihood of future purchase, likelihood to recommend, etc.) through targeted loyalty and winback research, companies can be far more effective in optimizing customer loyalty behavior. That’s the clarity represented by the whole picture.

As Janelle Barlow famously wrote almost twenty years ago, a complaint is a gift. So, an unregistered complaint is an unopened gift. Is it a gold watch or a holiday fruitcake?

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.


  1. Michael,

    You’ve laid out a clear process for any company to mine the value of customer complaints, and I doubt that any business leader would object to anything you’ve stated.

    But why is it that so few companies seem to do any of this on a consistent basis?

    Like any other initiative that requires resources and investment, if the right people at the right level haven’t been shown the ROI, it’s not going to receive the level of funding it needs to be successful.

    Jim Watson
    Portland, Maine

  2. Jim –

    Thanks for your comment and for attaching your own blog on the subject from last October.

    Your question is an excellent one. In the real world of b2c and b2c enterprise operations, few companies demonstrate true customer-centricity, what I term an inside-out customer advocacy focus. This governs sales transactions, customer support processes, and VOC information development and flow as well.

    Most organizations are reactive when it comes to complaints. At the end of the day, my perspective on ‘listening’ is that it requires more than just monitoring. It requires proactive solicitation of the complaints that are hiding under mushrooms. Even mining text content for complaints, though it’s advanced and represents a broader spectrum of negative customer feeling than just the problems that are registered, isn’t enough. Customer-centric organizations understand that, beyond just listening, they have to regularly ask for unexpressed complaints among representative samples of customers, especially those with recent purchase and/or service transactions.


  3. Thanks Michael – your point is well made/well taken – “Don’t limit the complaints that you process to those complaints that are visible. It’s often the complaints beneath the surface that can offer the greatest insight. So, seek out and process those complaints too!”


  4. In answer to this question, one of the mini-blog tweets, I’d say yes, the same line of thinking applies. The challenge is that, in some contrast to the world of mainstream b2b and b2c companies, most colleges and universities continue to be extremely autocratic and dismissive where student complaints are concerned.

  5. …also solicit perceived customer complaints from employees.

    In responding to an observation about this post on one of my LinkedIn groups, I also offered the following opinion regarding employees, especially those that are customer-facing. This is based on years of employee and customer matching research results:

    One of the sources of disconnect between expressed complaints and the full reservoir of actual complaints is the perspectives of employees, particularly customer-facing employees. Customer service often misperceives which elements of performance complaint need the most attention, and the net result is what W. Edwards Deming called ‘chasing false rabbits’, i.e. correcting less consequential processes. A useful approach for addressing this is what we identify as ‘mirroring research’, basically asking employees to state how they think customers will rate elements of experience performance and also identification of areas of complaint. The distance between employee perception and customer reality is often significant, even startling.

    Here is a CustomerThink article which addresses this:


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