MANAGEMENT STRATEGIES Sep 30, 2024
Your customers’ complaints could be the goldmine you’re overlooking.
“We want zero complaints,” says every company in the world. But what if complaints are the secret competitive advantage your business needs?
“Complaints offer an intimate way of understanding your business through the eyes of your customers,” Dr. Janelle Barlow, President of All Out Performance and author of A Complaint is a Gift, said during her talk, Turning Critics into Advocates hosted by Management Strategies on September 23, 2024, at Discovery Primea, Makati.
The event explored a radical idea: complaints can be your greatest source of insight and revenue, if only companies dared to listen.
And listen they did. Senior management who attended the event came from private foundations, telecommunications, finance, real estate and hospitality industries.
Silence is worse
If complaints aren’t bad news for companies, why don’t more customers speak up?
Many don’t think anything will get done, or the situation could worsen further. Dr. Barlow shared an anecdote about people being afraid to complain to their doctors, worrying that voicing their concerns might lead to worse treatment.
The same logic applies in business: silence from customers can be far more dangerous than complaints. These are the customers who simply walk away–the 50% you’ll never see again.
But, here’s the twist: 60-70% of customers who have their complaints resolved satisfactorily go on to buy five times more than they initially would have.
“If you solve their concerns instead of over-apologizing, they’ll actually come back to repurchase five times more,” Dr. Barlow said. “This is the power of complaint handling in the language of revenue and results.”
Everyone owns the complaint
Only 1 in 10,000 written complaints ever make their way to senior management. In the US, companies are losing 1 trillion dollars due to poor complaint handling.
Dr. Barlow emphasized the need to break down silos. Businesses must instead foster a culture where everyone feels responsible for addressing customer concerns.
Too often, companies are laser-focused on acquiring new customers, missing the retention goldmine.
Retaining existing customers is significantly cheaper than attracting new ones. And the rewards are exponential. A small increase in retention can lead to a dramatic uptick in profits.
“Most companies spend half of their revenue attracting new customers,” Dr. Barlow revealed. “But retaining even just 5% of your customers can lead to up to 95% profit increase.”
Turning critics into advocates
So what can businesses do in face of complaints? Dr. Barlow suggests three power tools that will turn even the worst critics into staunch advocates.
First, widen your customers’ tolerance zone. “When customers feel understood and valued, they are far more forgiving,” Dr. Barlow explained. A little friendliness and empathy go a long way in easing tensions and getting customers on your side. Instead of reacting defensively, aim to create an environment where your customers feel heard.
Next, speed. “Above all, what customers want from service is responsiveness,” Dr. Barlow emphasized. Quick resolutions show that you value their time and concerns. When you act swiftly, you not only diffuse anger but also demonstrate your company’s commitment to resolving problems.
Big data can speed up resolution. “Access to every data point can address the root cause of customer complaints and understand them beyond face value.”
Finally, fairness is more important than you realize. Customers aren’t just looking for their problem to be solved—they want it handled fairly. When your solution feels balanced and just, customers are more likely to leave with a positive impression, even if things didn’t start off smoothly.
Behind every complaint is a gift. The question is: Are you ready to unwrap it?
Contact
Monette Quiogue mgtstratseeding@gmail.com