In this excerpt from his book, Achieving Excellence Through Customer Service, John Tschohl explains why customer complaints are a golden opportunity for companies to improve their service.
If your organization receives virtually no complaints this is not a sign that
you are blessed with the most efficient, committed, and intelligent employee
force on the face of the earth. It is far more likely that the few complaints that
you receive are the tip of a submerged iceberg of complaints.
That’s the picture revealed by an A.C. Nielsen Co. study. The firm found
that only 1 in 50 dissatisfied consumers takes the time to complain.
So, to find out how many customers out there are dissatisfied, multiply the
number of complaints received by 50. The result is more likely to represent the
true picture in your organization.
Another way of looking at the significance of the number of complaints
actually heard is to consider the fact that the ratio of complaints heard at
headquarters to the instances of complaining in the marketplace (articulated
or not) yields a number called the “Multiplier.” It ranges from 6:1 for serious
problems, when there is no field or retail contact organization available, to
2,000:1 for less serious problems when an extensive field service organization
is active to receive and to absorb problems. So, if you have a well-established,
professional complaint system in place, and you received only two complaints
last month, you should understand that it is likely that 4,000 customers felt like
complaining but did not.
The existence of a multiplier is the reason that you should solicit complaints,
smooth the way for complainers, and even reward customers for complaining.
This is what you would do if your objective were total customer satisfaction and
its bottom-line benefits.
It is far better for an organization to yank its head out of the sand and to
open its eyes to face complaints and complainers than it is to pull a cloak of
smugness around its shoulders. Dissatisfied customers are going to strike back, eventually. The company that is aware of complaints will be equipped to take action to prevent the consequences of the complaints.
Employees at all levels need to understand why it is important to solicit,
to accept, and to effectively handle and satisfy complaints. They should be
assisted in understanding the relation between productive complaint handling
and your strategic thinking.
Shycon Associates, Inc., found in a customer service study that almost
70 percent of corporate purchasing agents would take immediate punitive
action against a company without complaining to either a salesperson or to a
sales manager first. They said that it was just easier to switch vendors than to
complain. This is a very good reason for soliciting complaints.
The Technical Assistance Research Program (TARP) found that for major
problems where there would have been an average loss of $142, about 31
percent of individuals who encountered the problem did not complain.
Nielsen found that for small problems that resulted in loss of a few dollars
or a minor inconvenience, only three percent of consumers complained. Thirty
percent returned the product Furthermore, 70 percent of consumers encountering this type of problem either would do nothing or would discard the product.
Results of a survey of 1,000 businesses indicated that 42 percent of companies that encountered problems with a car rental company
didn’t complain to anyone even to the counter clerk. You can see the flaw in
measuring effectiveness of service by the few number of complaints received.
By the way, the Council of Better Business Bureaus says that complaints
about auto repairs top the list of the nation’s service problems, followed by gripes about home improvement contractors, mail-order companies, and landlords.
Ask Customers For Complaints
“High-growth companies stay in touch with their markets—and willingly spend
the money to do so. They know their customers and they keep their knowledge
fresh,” says the American Management Association (AMA) in its research: “Win by losing: A complaint is an opportunity”.
Ron Kaufmann, from Singapore, in his book, Up Your Service, asked,
“Who actually picks up the phone, takes up a pen or gathers the courage to
complain? You might think it’s the troublemaker, the difficult customer, and the
one who enjoys being angry. You’d be wrong.”
Research shows that complaining customers are overwhelmingly loyal
and sincere. They are complaining to you because they care about your business and about the service they receive. They intend doing business with you again in the future, and they want you to set things right.
Do not lose your head when problems arise. Work with your customers to
set things right. The final result should be loyal customers who freely proclaim: “Wow! We got more than we expected. This organization is responsible. They really do care. We’ll come back again. And we’ll tell others to come here, too.”
This article is based on an excerpt from “Achieving Excellence Through Customer Service” by John Tschohl.
About the Author
John Tschohl is a customer service strategist and is the founder and president of the Service Quality Institute. John has been described by USA Today, Time, and Entrepreneur as a ‘customer service guru’ and has written several highly acclaimed customer service books.