Complaint handling – Five tips to establishing loyalty

There are several ways to handle complaints from customers. In a lot of companies, complaint handling is about how to make the customer stop calling. Other companies forget all about costs in order to please the customers. The question is how to find the right balance? This article provides you with tips to benefit both priorities. Complaint handling is a process that goes across the entire organisation and affects everyone. Therefore it is essential to handle the complaint the right way and make sure that everyone in the organisation has the right training and mindset. But first, we will review why this subject must be taken seriously.

Why is complaint handling so important?   

What determines a good and a bad experience for the customer during a complaint handling process depends on how the organisation manages to handle and solve the problem. An effective process is therefore crucial. Not only to provide a great customer experience but also to find a solution before the problem gets worse. It is therefore important to find the right balance between customer loyalty, cost and the learning process during the complaint handling process.

Studies from the Jim Moran Institute and Lee Resource show that if a complaint is resolved in the customers’ favour they will do business with you again 70% of the time. Furthermore, up to 95% of the customers will give you a second chance if the complaint is handled successfully and in a timely manner.

“Treat every customer as if they have 10.000 Twitter followers” – Myers Barnes

It costs at least five times more to acquire a new customer than to maintain an exciting one. Maintaining a customer should therefore always be a top priority – both in terms of costs, but also in terms of the fact that customers with a bad experience on average say this to eight other people. An “easy” solution is to give the customer a refund, a new product, or a free service – however, you will get far further if you include psychological thinking and conversation first.

Success criteria for establishing loyalty when handling complaints

Below we take a look at five essential tips to establish loyalty to the customer during a complaint handling process:

1. Make sure your customer service reps have the right attitude

Always start with the view that the customer has a valid point – and he is not trying to fool you. See the complaint as a potential improvement opportunity and thank the customer for complaining. The customer is prepared to spend his time and money to help you to solve a problem.

Put yourself in the place of the customer when dealing with a complaint. This will give you the advantage in understanding the customers’ situation and enable you to find a solution quicker.

Remember to put yourself as a good example for your colleagues – they see what you do! So make sure you are setting the right example and prioritize the complaint. Good and effective complaint handling pays off.

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2. Understand the problem before trying to solve it

Get all the facts first – letting the customer give you all of the information helps you fully understand the situation and the problem.

Remember that there are different types of customers. You and the customer do not necessarily understand the problem the same way. To gain an effective complaint handling process and achieve a loyal relationship it is essential to see the complaint from a customer’s point of view and listen and treat them individually with great situational awareness.

3. Be informal and result-oriented

Customers want to be treated with respect – but remember: don’t treat them like royalty – if you do then the interaction will not feel genuine. Studies show that personalized communication is the most powerful tool when interacting with anyone, but especially with your customers. You get a long way with a little familiarity to get the customer on your side.

Focus on correcting the mistake. It is often seen that companies give the customer compensation instead of solving the actual problem. This can lead to more complaints about the same thing in the future because the problem never gets fixed. Get a satisfied customer by apologizing for the mistake, solving the problem in a timely manner and getting a confirmation that the solution has been satisfactory.

4. Learn from every complaint

Learn from every complaint – and solve the problem. The customer’s complaint will tell you about what went wrong, but not how to solve the problem that caused it. Let the customer know that you take care of the problem and that you will find a solution.

“Customer feedback is great for telling you what you did wrong. It’s terrible at telling you what you should do next” – Phil Libin, CEO, Evernote

Locate the activity in a process where the error occurred and minimize the reason for further deviations. This requires you to have a continuous improvement culture. Do you follow up on customer (and colleagues) satisfaction regularly? Is the quality of goods and services checked for mistakes?

Also, remember to listen to your colleagues, they are often closer to the customer than you are. Make sure their complaints also are handled. Ask for their views regularly and make adjustments if it is sensible and relevant.

5. Use a common process for complaint handling

The right approach to handle complaints is important to ensure a quick, effective, and result-oriented process. Use a common process to handle complaints that is up-to-date and relevant. This ensures that everyone knows who does what when a complaint needs to be handled.

And remember to treat your customer service team well – they need to put up with a lot.

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