Unhappy customers are one of your company’s most valuable assets.
You’ll never hear from most of them—only about 6 percent of customers who have a negative experience will let you know, according to research from Wharton School at the University of Pennsylvania and the Verde Group. But 31 percent will tell others about it, and 6 percent will inform six or more people.
And how will those people react? About half the people surveyed in the same study said they have avoided patronizing a business because someone griped about it to them. What does this mean in reality? The researchers concluded that if 100 of your customers have a bad experience, you stand to lose about 32 other current or potential customers.
That’s some seriously bad word of mouth! And as we’re introduced to more ways to share day-to-day buying experiences—rants about bad consumer experiences on Facebook are becoming as common as baby photos—negative word-of-mouth is likely to spread more quickly and to wider audiences than ever before.
For companies who rely heavily on word-of-mouth, the potential consequences are frightening. 99designs, the crowdsourced graphic design marketplace I cofounded in 2008, only recently put a formal marketing team in place. Historically, more than 80 percent of our customers have come from word of mouth referrals.
So why should you love the people who didn’t love you at first blush?
If handled in the right way, they can become your most fervent advocates. A person who had an unpleasant experience but was thrilled by the way you handled their complaint is more likely to become an ambassador for your business than someone who came away satisfied from the get-go.
Think of a complaint as a gift: a customer who complains is handing you the rare opportunity not only to prove you live by the mantra that customer satisfaction is No. 1, but also that their satisfaction as an individual customer truly matters. Mishandle it, and you lose the opportunity forever.
Think it’s too costly to spend the time and money addressing every customer grievance? The price of resolving a complaint is infinitely smaller than not dealing with it, even if you have to take a financial hit up front.
Follow the TAO
Don’t get defensive. Don’t make excuses. If someone bothers to complain (and remember, most people won’t) then they perceive a major problem. Only you have the power to solve it.
Follow what I think of as the “TAO” of good customer service: Thank, Apologize and Offer. Thank clients for taking the time to contact you. Apologize and validate that you understand why they feel the way they do. Offer a solution that blows them out of the water. Is someone complaining about an item that was broken when it arrived at their door? Ship a replacement overnight and refund part of the purchase price for the inconvenience. You might even consider throwing in a coupon good toward a future purchase as well—this could help sway their decision to turn to you again if they’re on the fence.
Of course, it’s not your fault if the delivery person dropped the package, left it out of the rain or rounded up a herd of elephants to stomp on it. It is your job to accept responsibility, make it right, and transform frustration into delight by rewarding them for complaining, in this case by offering a partial refund and absorbing the cost of overnighting a replacement.
Don’t forget to follow-up a few days later to make sure their issue has been adequately resolved.
Seek out complaints
While satisfaction surveys are relatively common these days, most do a terrible job of identifying unhappy clients, and companies tend to simply aggregate the responses rather then dealing with problem cases on a one-to-one basis.
So what should a smart entrepreneur do? As William H. Davidow, author and former Senior Vice President of Marketing and Sales at Intel Corporation said, “the longer you wait, the harder it is to produce outstanding customer service.”
Don’t sit hunched over your laptop anxiously monitoring sites like Yelp, Facebook and Twitter, hoping you won’t trip across negative critiques. Actively seek out issues with your service or delivery by specifically asking every customer, “What could we have done better?” Ask them in person, ask them via a short automated e-mail (that they can hit “Reply” to), and have your customer service team regularly make calls to customers at random. However you do it, just ask. The key is to make it easy for customers to respond, and then to make sure responses go to someone empowered to help.
By learning to view disgruntled customers as opportunities rather than liabilities, you just may discover not only your mindset, but also your bottom line undergoing some very positive changes.
Photo credit: Thinkstock
