Using Complaints To Drive Customer Experience

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Using Complaints To Drive Customer Experience

Using Complaints To Drive Customer Experience

It may seem counterintuitive, but unhappy consumers could be key to improving customer satisfaction and retention rates.

Complaint management was long seen as a necessary evil, an after-sales cost center service that was begrudgingly provided. From the outside, it is understandable why companies would have little enthusiasm spending precious resources on unhappy customers. They are far more likely to switch to a competitor, are harder to win back, and often tell between 9-15 people about their negative experience.

By casting complaints in a different light, however, we can understand that when customers complain, they show us that they care. They also give us an opportunity to exceed expectations, identify gaps in the customer experience, and improve products and services. 

In this blog, we’ll take a closer look at why complaints management matters, how companies can effectively manage complaints, and how they can benefit from complaints.

The Next Generation of Customer Complaints

In the past, customer complaints were isolated conversations that took place between consumers and companies. Now, social media and review sites such as Yelp, Amazon, Google My Business and TripAdvisor all provide a very public forum where any disgruntled customer is free to tell anyone who is interested all about their experience.

And people are interested. 96% of consumers will specifically seek out negative reviews to inform their choices, and 49% consider consumer reviews to be as trustworthy as recommendations from friends and family.

Percentage of customers who seek out negative online reviews during the purchase process

While this has made the purchasing process more transparent for the customer, and democratized reviews, it has made public relations and reputation management a far more complex and sprawling undertaking for brands. At the same time, it has made it more important.

Why Complaints Management Matters

In the cold harsh light of public scrutiny, monitoring, responding, and taking action on complaints has become crucial to customer experience (CX) strategy. 

Only 1 in every 26 unhappy customers go to the trouble of making a complaint. The others simply leave. When customers complain, they give you an opportunity to interact and learn from their experience, which you would otherwise not be afforded. 

Customers are also willing to forgive and forget. In cases where businesses successfully handle a complaint, 70% of those customers will go on to make further purchases with the same brand.

Complaints are also unlike any other feedback your business can receive. Brands can collect qualitative data from complaints which can build market insight, improve audience segmentation, and enable them to design products or services that more accurately align with buyer pains.

Related Learn how SEC Mystery Shopping can help identify problem areas before they become complaints

How Can Companies Effectively Manage Complaints?

Engage and apologize

Validate your customer’s experience and don’t be afraid to admit mistakes. When customers complain, the majority simply want acknowledgement. According to research from the Nottingham School of Economics, 45% of customers will withdraw negative evaluations following an apology, compared to only 23% who will withdraw their negative feedback in return for compensation. 

If you have been able to resolve the complaint, make sure you follow up with the customer afterwards to show your continued commitment to them.

Reactive reporting

Collating feedback in real time helps brands to react sooner and resolve issues before they escalate. Promptly handling complaints limits a company’s exposure to potential reputational damage, and can eliminate barriers to purchase (such as website functionality issues) before they start to eat into conversion rates and revenue.

Qualitative insights & buyer empathy

The vast majority of unhappy customers will not make complaints. So, if those that do highlight deficiencies in your products or services, it’s a good idea to understand how widespread this problem or perception is. Customer Intelligence can help identify if these issues are isolated incidents or more extensive concerns.

Stronger personalization

Understanding your customers means understanding their motivations, and this counts for complaints too. It’s essential to identify what has driven the complaint, and find the solution that is the best fit for that particular customer. 

Once a customer has complained, make sure that it’s logged against their personal record, so that the complaint is taken into consideration for all future interactions with that customer. 

Ingrain CX into the company culture

Business leaders should ensure every employee takes complaints seriously, encouraging employees to turn ‘lemons into lemonade’, and empowering customers to share their experiences. 

The most effective CX leaders invest time and money into learning the root cause of the complaint and trying to prevent them in the future. They also engender the belief that CX is everyone’s responsibility, not just customer-facing staff.

Respond quickly

According to research from Harvard Business Review, customers who have their complaints quickly resolved will actually be prepared to spend more in future with the same company. Quick responses show the customer that you take their complaint seriously and are willing to act. 

Share what you’ve learned

The information that has been learned from a complaint can inform product development, update the content on knowledge bases, and shape future interactions with customers. Make sure that everyone in the organization has access to the insights gained through the complaints process, so that they can inform changes and drive improvements. 

The way that customers provide feedback on their experiences has dramatically changed with the advent of review sites.

How Businesses Can Benefit From Complaints

Product and service design

Complaints help you to address possible faults that have been missed in the product testing a development phase, which could be addressed when the product is updated or refreshed. There may be unnecessary features which could be stripped out – with consequent cost savings. 

Similarly, with services, efforts to upsell are always balanced against the potential to discourage potential customers through overly pushy sales tactics. Complaints identify cases where the company hasn’t struck the right balance.

Improved targeting

A common grievance among customers is that a product has been mis-sold or misrepresented. This is usually an indication that the product has not been correctly targeted at the right audience. For example, for technology products, the term “user-friendly” will mean something different to people under-25 and those over-55. 

Value complaints could also indicate a misalignment in pricing strategy, and a misunderstanding of market positioning. Delivering a mid-range experience is perfectly acceptable, but not if you’re promising premium.

Refocus CX efforts

Every business can go through periods where competing priorities may distract it from providing for its customers. Two thirds of businesses now compete primarily on the basis of CX, and it is the leading driver of customer loyalty. Companies that fail to prioritize CX are at real risk of losing market share. 

Complaints can highlight instances where customer-focus has been lost, and can act as a driving force in redoubling efforts to improve customer experience.

Increase retention

The handling of customer complaints can directly impact customer retention. The vast majority of customers leave a brand because they feel that the company doesn’t care about them, not because they are dissatisfied with service. Responding to customer complaints in a way which shows you value their feedback demonstrates the importance of these customers to your company.

Reasons why customers leave brands

When customers are lost, they are not easily replaced. It is 5 times more expensive to acquire new customers than to retain existing ones, and existing customers spend 67% more than newcomers

Enhance brand image

Complaints are an opportunity to exceed expectations in a remarkable way, in the literal sense of the word. When grievances are successfully handled and resolved, customers are much more likely to speak positively about that brand to their friends and family. 

Similarly, if an interaction over social media or a review site is managed to a positive outcome, that interaction will remain for all to see, and will continue to favorably influence perceptions in the future.

Final Thoughts

Most customers won’t take the time to complain. The ones that do are the ones that care. These customers give you a unique insight into improvements your company needs to make, 

So, when customers register complaints, make sure you thank them. They might have just provided you with an insight that will make a meaningful difference to your business. 

To quote Bill Gates: 

“Your most unhappy customers are your greatest source of learning.”

Whether the steps that need to be made involve changing services or improving employee training around customer support, Service Evaluation Concepts understand every business has unique challenges. Our expert team has decades of experience showing businesses how to measure what needs to be managed when it comes to employee engagement and customer experience. We can help you to do the same.