Customer Loyalty: Handling Complaints

At the root of it all, a complaint is a gift. Why? Because it’s feedback. We don’t often receive feedback, and more often than not, companies rely on the outdated and faulty customer satisfaction survey.

Be sure to read my post on the 3 company values that lead to emotional connections with your customers. You will need to be sure you have these values firmly in place in your business and you discuss how your business is managing these values on a regular basis (like at monthly employee meetings).

If you are tempted to either (a) hide from the customer so you don’t have to deal with their issue or (b) treat the customer like a grump who doesn’t know anything, here are some tidbits based on research that demonstrate how your management of complaints impacts not only your repeat sales, but also your chances for referral business.

  • If a customer has a minor problem and it is handled quickly, 95% will repurchase
    from your business; 82% will purchase again even if it is a major problem that has been resolved.
  • If the problem is not resolved and the problem was a major one, only 14% will
    repurchase.

A complaint is a gift and an opportunity to show the customer how
good your organization really is. It also provides important information on how
you can get better by changing a process or improving a procedure to prevent a
repeat occurrence with this customer or any others!

Keeping track of complaints therefore becomes a very important function within your company’s internal processes. You need to have your complaint management system in place now, before you have a complaint and if you are in the middle of managing a complaint. The steps you follow are these:

  • Thank the customer for bringing this to your attention
  • Offer an apology
  • THEN find out the cause of your customer’s issue

The thank you and the apology create a huge emotional shift in your customer’s
mind. It shows a great deal of empathy and sends a strong message that the most
important consideration is how the customer feels rather than who did what to
create the problem. If your customer feels someone at your company cares about them, they are less likely to blame your company for problems.

Loyal customers lead to easier profits

customer loyaltyGet customers. Get more customers. Make more money. Isn’t this how business works?

What if I told you that your existing customers are the best source for profits through more sales? You might not believe me. You might ask me to tell you why sales to existing customers can lead to more profits and how you can position yourself to take advantage of sales to existing customers. OK. I will.

People buy on emotion more than need. You want to be in the position of being the business that someone thinks of when they are ready to purchase. Why? Because people buy from businesses they trust. Your task as a manager or business owner is to establish the points of connection you and your staff will use to build trust with your existing customers so they think of you first when they are ready to purchase your product or service. This calls for a plan or a schedule so you connect with your customers on a regular basis and build emotional value through a relationship with your customers.

There are three important values for businesses to develop in order to create emotional value with the customer:

  • Connectivity – You and your entire staff have to be connected and in sync, so senior managers are connected to junior managers, etc. Another way to think of this is that everyone has to be working toward the same end result, and everyone has to know what that desired end result is.
  • Creativity – You have to let your people solve the problems. Your people have to be empowered to make decisions that solve the problems and preserve the trust your customer has in you. If you’ve ever rented a car from Enterprise, you’ve experienced this creativity in action.
  • Integrity – You have to deliver what you promise. If you don’t, you’re never going to have loyal customers or loyal employees.

People buy from people they trust. They buy more because of you than because of your product or service. Developing your customer loyalty strategy is a huge competitive advantage you should explore to grow your business, especially when I tell you this:

It costs your 4 times as much money to find a new customer than to sell to a loyal customer.

If you’ve built trust with the customer and your staff, you’ve establishd your points of connection, and you’ve worked to develop the three values described above, then you are on you way.