Customer complaints — why ignorance is not always bliss

Never receiving a complaint does not mean that all your customers are satisfied. According to the Office of Consumer and Business Affairs in southern Australia, a typical business only hears from 4 per cent of unhappy customers.

The rest keep quiet and 91 per cent will simply withdraw their custom. It is also estimated, however, that a dissatisfied customer will tell over eight people about his or her problem and, nowadays, this could include posting criticisms on the internet.

So, for businesses, ignorance is not bliss.

Furthermore, a survey conducted in the US into the complaints handling procedures of some of America’s leading companies revealed that the “best in business” want their customers to complain. They use feedback from their customer services departments, in addition to general customer surveys, to provide constructive ideas and improve their services.

Complaints are an important form of communication —they could help you to better understand customer needs.

A complaint can also be viewed as a chance to turn an unhappy customer into a happy (and loyal) one. The Office of Consumer and Business Affairs says that seven out of 10 customers who complain will continue to give you their custom if their complaint is resolved in their favour and, if the complaint is resolved immediately, 95 per cent will return.

Some companies use the term “opportunity” instead of complaint and Toyota Motor Sales in the US uses the following formula:

Doing the job right first time + Effective complaint management

= Maximum customer satisfaction and loyalty

The key, it seems, is to have an effective complaints management system, which follows a few basic principles …

Welcome customer complaints Make it easy for customers to complain and invite them to tell you when they are unhappy. For example, you could have a customer charter, detailing your system for dealing with complaints. Pharmacies in England and Wales now have to complete patient survey forms as part of the community pharmacy contract. Surveys are to be undertaken annually, the first of which must be completed by 31 March.

However, patient surveys are “pretty useless for culling new ideas or solving customer problems”, comments Noel Baumber, proprietor of Barrowbygate Pharmacy in Grantham, Lincolnshire. Mr Baumber suggests that consultation rooms could be used to deal with complaints.

“Customers will appreciate privacy and hospitality if it is offered and it takes what might sound like an argument away from the rest of your customers, preventing your reputation from suffering unjustly,” he explains.

Deal with complaints quickly You might consider authorising all staff to deal with complaints so problems can be solved at the point of first contact. “I always encourage my staff to take the appropriate action so that I do not need to be involved — [the] buzz word [is] empower,” says Alan Israel, manager of Boots the Chemists in Kilburn, London.

If the complaint is written, or you have been left a message, acknowledge it as soon as possible, even if there is no immediate solution to the problem, is the advice from Chris Howland-Harris, proprietor of Ashgrove Pharmacy in Bristol.

Listen and empathise The customer is not always right, but he or she always has the right to be listened to, adds Mr Howland-Harris. Find out what the problem is and acknowledge it and how the customer feels. “We all like to be listened to and have our view respected, even if it is something nothing can be done about,” he says.

According to research by Technical Assistance Programs Inc, the three things that a customer looks for most when complaining are an apology, an explanation and a reassurance that the problem will not reoccur.

“Often a customer simply wants to make their problem known. They’re not looking for compensation. They just want to make you aware,” says Derek Williams, creator of the WOW! Awards, a UK-based award scheme to recognise customer service excellence.

Don’t assume what the customer wants — ask Mr Howland-Harris’s top tip, however, is to ask: “What would you like me to do?” He explains: “That often defuses a situation. Many people expect a confrontation when they have a complaint, which can make them confrontational when they complain. To ask what they want to happen gives them back control, even if — as often happens — they don't know what can be done.”

Stay calm Do not take things personally and get defensive. “Criticism is always difficult to accept no matter how positive you try to be. And the harder you are working to please the customer, the deeper the criticism cuts,” adds Mr Williams. Even if the customer is angry or irritating, getting angry yourself will exacerbate the situation.

Explain the solution(s) you can offer If a proposed solution is accepted, act as soon as possible. If the problem will take some time to sort out, let the customer know when this will happen and keep this commitment. And make sure there is someone the customer can speak to if you are not at work.

If the customer wants more than their legal entitlement and you are not prepared to offer more, try to explain their rights.”It is rare that some sort of compromise cannot be reached so that the customer leaves satisfied and returns,” Mr Israel told Retail Round-up.

Mr Howland-Harris advises keeping things in perspective. He believes that the “life-time value” of each customer (ie, average spend x average number of visits x average adult life) should be considered and this usually comes to at least £1,500. “So even if you're sure they had that £1.50 tube of toothpaste in the bag when they left the pharmacy, isn't it worth giving them another?”

Be fair and honest Imagine you are the customer (what would make you feel your complaint has been resolved fairly?) and never make promises you cannot keep.

Thank the customer “Few customers are going to complain unless they’ve got a real problem. So when a customer does take the time and trouble to let you know that you’ve got a problem, don’t reject them,”says Mr Williams.

Record the interaction and outcomes Records can be used to monitor your system and how well complaints are handled. They can also help to spot recurring problems, such as product defects or service failures.

The foundation beneath all these principles is to train your staff to handle complaints well, whether you would like them to handle complaints fully or simply to be sympathetic and know who to refer the customer to promptly.

“I remind my staff that handling a complain correctly will win a customer over for life, so think of all the times in the future when the store will benefit from future shopping,” says Mr Israel.

Having a written complaints policy can help. If you don’t have one, it is a good idea to involve your staff in putting one together (see Panel below).

Dealing with complaints effectively shows the customer that your business cares.