How to Manage Customer Complaints

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Regardless of what business you are in, chances are that you will have customers either internal or external who will play a critical role in your business. It is a good idea to remember that no business can exist without customers so it is vital that you learn how to manage your customers both when they are exceptionally thrilled with you and when they are complaining about your product or service.

One of the advantages of handling customer complaints effectively is that it turns what could potentially be a catastrophe into a lifelong, loyal customer. Regardless of how good your product or service is there are bound to be a few customer complaints that come up, so it pays to be able to manage them in a way that enables you to retain your customers and keep them happy.

In this podcast we are going to talk about 6 ways that you can manage customer complaints effectively:

  • It’s important to first understand the value of your customers
  • What’s the real cost of fixing the complaint?
  • All complaining customers want to feel respected and validated
  • Manage your customer complaints
  • Always tell your customers what you can do (and not what you can’t do)
  • If it’s possible, always try and follow-up afterwards

1. It’s important to first understand the value of your  customers

You must first understand the true value of your customers. A lot of businesses think of their customers as one time single point acquisition individuals, but in reality they are the most important asset that your business can have. It is a good idea to keep the following three points in mind: keeping existing customers costs less than acquiring new ones, 80% of your business comes from 20% of your existing customers, and referrals are the best way to get new business.

2. What’s the real cost of fixing the complaint?

Many times people think it is really expensive to fix your customer’s complaints. Spend some time calculating how much time and money it really costs to fix a customer’s complaint and weigh that against the potential cost of losing a customer. Which one is actually cheaper?

3. All complaining customers want to feel respected and validated

All complaining customers want to feel respected and validated. Often they complain because they genuinely want your company to improve its products and services. Take the time to thank them for their feedback and tell them how you are going to fix the issue and then check back with them once the issue has been fixed to see if it’s ok with them or not.

4. Manage your customer complaints

Here are some steps to take when managing complaints; listen sympathetically to establish the details, record the details of what happened along with any relevant material or documentation, offer to rectify the problem – either by repairing, replacing or providing a refund, complete any appropriate follow up action, such as sending an apology letter, or following up with a phone call etc.

5. Always tell your customers what you can do (and not what you can’t do)

When you register an issue or a complaint. Acknowledge that your customers have a valid point and let them know upfront, what you can do and what you can’t do for them. This way they won’t be expecting more than you can deliver and they will know that you did take the time to sort through the issue and come up with a solution.

6. If it’s possible, always try and follow-up afterwards

Once the complaint has been resolved, try and get in touch with your customers and see if they are happy with the resolution. Seek their feedback on how the complaint was handled, what could be done to prevent future complaints and what went well for them.