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In Focus: How a complaint handled well creates loyal customers

Our In Focus series of articles originally appeared in The Leadership Bulletin, a free weekly bulletin for leaders and managers. You can subscribe here.

How do you feel when you complain about something? And how differently do you feel if it’s fixed properly, or you’re well compensated for the error? It’s a question that everyone who runs an organisation with customers should ask themselves.

Inevitably, a complaint is a signal that something has gone wrong. It may be that a potential business-customer relationship has come to a crashing end before it even began. In the majority of cases, where the person with a complaint just keeps their grumbles to themselves (and their family and friends), that’s exactly what happens.

But in the small minority of cases where people do complain to you, this is a golden if underrecognized opportunity for businesses to create more loyal customers. Why? Because, remarkably, customers’ view of a company are more improved by something poor being properly fixed than when nothing goes wrong in the first place. Complaints provide an opportunity to show how you work and how much importance you put on your customers and their experiences.

I had an experience of this just the other week when I was on a cruise around the Norwegian Fjords. One evening, over dinner, a couple shared their experience of sailing on the final voyage of the QEII - put bluntly, it was a major disappointment for them both. They complained to Cunard who ultimately offered them a free cruise. With nothing to lose, they set sail for a second time and loved it - they have since been back on Cunard cruise liners an amazing 17 times! A very loyal pair of customers who might have been lost without a big, bold act in response to their complaint.

I recommend looking at your complaints process to make sure that you have very clear process for how complaints will be handled, promptly and to the satisfaction of any reasonable customer. Start by asking questions such as:

  • How quickly are we responding to complaints?

  • Are we getting the tone of our responses right?

  • Do we acknowledge when something is our fault? Do we apologise?

  • What can we give customers that is of value to them and relatively easy for us to give?

  • What longer-term value can we provide to this customer, for example checking in on them in a couple of weeks after a replacement has been delivered?

  • What processes do we have for monitoring complaints? There is a small risk of moral hazard when you go above-and-beyond for complaining customers. After all, you don’t want to incentivise complaints and distort how people respond to your company and its services.

By considering these questions, you can ensure that you are seizing every opportunity to turn a complaining customer in to a long-term one. As I hope it goes without saying, this doesn’t mean you should create problems just to fix them - after all, many people with complaints never complain and these will remain irritated former customers - but it does mean that each complaint is a genuine customer retention opportunity.