When a customer complains, is it possible for them to become a Loyal Customer or are they lost forever? It depends on how your company handles the complaint. If you create not only a positive outcome, but a positive encounter, you have a pretty good shot at creating a loyal customer.
Of customers with minor problems that are handled quickly, 95% will repurchase from that organization; 82% will purchase again even if it is a major problem that has been resolved. On the other hand, if a major issue goes unresolved, only 14% will repurchase.
Think of a complaint as 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. Keeping track of complaints therefore becomes a very important function of any company that's serious about building customer loyalty.
To quote Alec Applebaum of the Gallup Management Journal, “When customers experience a problem, a service glitch, or faulty product, a funny thing happens. Companies that deal quickly and thoroughly with customers’ problems tend to arouse passion in their customers, just as surely as companies that never create problems at all. For example, Southwest Airlines customers say the airline effectively deals with problems in 77% of cases, compared with less than 50% for the other large carriers. As a result, nearly half of those who say they are loyal to an airline identify Southwest as their favorite.” This is especially true in a service industry since the service cannot be measured or evaluated before being given, hence the need to measure complaints.
It’s only natural that mistakes will happen. The question is what is your response strategy? Is it fast enough? How quickly can the problem be solved to the satisfaction of the customer? Typically, the faster the response the better!
According to Janelle Barlow and Dianna Maul authors of Emotional Value: Creating Strong Bonds with Your Customers, when handling a complaint, the first thing you need to do is thank the customer for bringing this situation to your attention, then offer an apology. Only then should you find out the cause of the customer’s problem. If you were the complaining customer, how would you react to a thank you and an apology? You would appreciate the concern and you would feel better in an instant. The thank you and the apology create a huge emotional shift in the 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 a customer feels someone cares about them, they are less likely to blame the organization for problems.
What processes do you have in place to turn customer complaints into victories?