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Only One in 50 Customers Complain; Pay Attention to Keep the Other 49

Complaints are valuable tools in pinpointing service problems — and growing your business.

No customer complaints? Don't pat yourself on the back. They're out there; you're just not hearing them — which means a lost opportunity.

Every company has dissatisfied customers. The key is learning where service problems exist and solving them before customers go elsewhere. Smart companies encourage complaints because they act as mini surveys, pinpointing where service must be improved.

According to an A.C. Nielsen Co. survey, only one in 50 dissatisfied customers will complain. Taking that complaint seriously and resolving the problem can help retain the other 49 customers who don't take time out to grouse. In fact, customers who do lodge a grievance care more about the company and want to keep patronizing it, but are upset about the way a particular issue was handled.

Companies should solicit complaints, smooth the way for complainers and even reward customers for complaining. Rest assured that dissatisfied customers are going to strike back eventually. The company that is aware of complaints will be equipped to take action to prevent the consequences.

When complaints are resolved, between 54% and 70% of customers will do business with the company again, according to one study. And 95% of customers say they will return if they believe their complaint was handled quickly. Customer service is less expensive than customer retention; many companies put enormous sums into attracting customers but little into retaining them or resolving problems that arise.

Sixty-five percent of a company's business comes from current customers. That means the order of the day for any company is winning satisfaction from its current customers. That can be tough if salespeople aren't trained to respond correctly. The natural response is to become defensive or take the anger personally and turn off the complainer.

Granted, dealing with complaining customers is no easy task. But if you can learn to diffuse difficult situations, you not only will satisfy the customer, you will find that your job becomes much more enjoyable. What's more, you can nip unseen service problems in the bud before customers abandon your business. As a result, your business will continue to grow.

Writer: Craig A. Shutt interviewed John Tschohl, president of the Minneapolis-based Service Quality Institute.

This article was originally published in the May 2000 issue of The Edward Lowe Report.

Topic: Defining and Serving a Market
Subtopic: Customer feedback

Getting More Mileage Out of Grievances

Listen carefully to the customer. Don't try to explain or defend the situation while they're unloading their experience.
Put yourself in the customer's place. Remember that a complaint is a request for help, not a reflection on you personally.
Make it clear that helping the customer is your top priority. Solve the problem or take them to someone who can.
Acknowledge that a mistake occurred and take responsibility by apologizing for the error.
Ask the customer what should be done to rectify the problem (often, what a customer wants is less than the company anticipates it will have to do). If their suggestion can't be met, suggest alternatives.
When possible, follow up with a phone call or letter of thanks and apology. Be sure to file the customer's letter or make a report, so that any patterns or trends can be reviewed, repaired and prevented over time.

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