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Standard fact sheet.
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Large print fact sheet.

Complaints 

Dealing with customers 

It may be hard to believe, but customer complaints are one of the best opportunities you have for keeping your customers loyal. Your most dissatisfied customers can actually become your best ambassadors – if their complaints are handled properly.

At some time or another, you have probably experienced a problem with a business. When they dealt with your complaint reasonably, it felt good. You were taken seriously. A balanced, reasonable response to customer complaints builds customer loyalty.

How do I set up effective complaint handling policy and procedures? 

Consider the following:

  • involve your staff in developing your policy and procedures
  • think of all the possible things that could happen and work out potential solutions
  • establish a policy and procedures manual
  • record your policy and procedures, circulate to staff and train them
  • let your customers know they can provide feedback or make a complaint
  • clearly publicising your contact detail
  • keep a record of all formal complaints.

Make sure your internal systems can cope with the policy and that your staff act promptly to resolve customer complaints. Monitor your policy and procedures to make sure they are working effectively. Regularly review your manual and update as necessary.

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How do I deal with unhappy customers? 

The following steps will help you and your staff deal with disgruntled customers:

  • Listen. Understand exactly what the problem is and let the customer know they have your full attention.
  • Acknowledge the problem. Complaining can be difficult. Being sympathetic and calm will help alleviate the customer’s stress.
  • Address the customer’s needs. Tell the customer you want to help improve the situation. Ask how they would like to proceed.
  • Communicate honestly. Decide what can be done to fix the problem and tell them.
  • Follow-up. Contact the customer within an agreed time-frame to ensure the problem was resolved.

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Fair Trading complaint handling service 

If after trying to settle the matter a customer is still unhappy, the customer can approach Fair Trading for assistance. Fair Trading provides information and assistance in negotiating a resolution to disputes and will usually contact your business by phone and attempt to sort out the problem.

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What are the facts about complaints? 

The facts are that:

  • 73% of people will tell you if they are dissatisfied
  • 48% of the most serious problems are sales and delivery related
  • 52% of those who don’t complain believed it wouldn’t help to contact you.

But it doesn’t stop there. The most disturbing facts are:

  • 66% of those who complain are not satisfied with the way their complaint was handled
  • 90% of those who are dissatisfied will not purchase from you again
  • each dissatisfied complainant is likely to tell 9 others of their bad experience.

The simple fact is you are probably pushing profits out the door if you don’t have an effective complaint handling policy, or staff who are not trained to handle complaints.

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Why should my business welcome complaints? 

For every one dissatisfied customer whose complaint you handle well:

  • 83% will become loyal
  • they will recommend you to five others.

Not only will you have retained their custom, you also have five potential new customers, just because you have resolved a complaint quickly, efficiently and fairly. Therefore you will need to spend less time and money attracting new customers. It’s worth remembering that it costs about five times more to attract a new customer than to keep an existing one. Think of the savings in advertising!

By being able to identify the problems that are causing persistent complaints, you also have an opportunity to reduce the time and effort spent fixing them, as well as gaining a clearer picture of other ways to improve your business.

But don’t just take our word for it, most major business writers and successful companies will tell you the importance of complaint handling in establishing customer loyalty.

It is worth seeking suggestions and compliments as well as complaints. You can also gain from discovering the things you are doing well.

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How do I make sure customers are satisfied? 

Customer satisfaction formula

Doing the job right the first time

+   

 

Effective customer contact handling =    Increased customer satisfaction/brand loyalty

There are many benefits to be derived from welcoming complaints and handling them well. They include:

  • fewer mistakes, less time spent fixing them
  • improved product quality
  • better understanding of customers’ needs
  • happier customers
  • greater customer loyalty
  • more customers through word-of-mouth advertising
  • better understanding of your business
  • less time and money spent attracting customers
  • improved business reputation
  • more repeat business
  • a healthier bottom line.

US marketing guru, Jim Rosenfield said that an ageing population would make it crucial for marketers to retain existing customers, ‘‘Everyone knows that it is cheaper to retain a customer than to get a new one.’’

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What if there are no complaints? 

Some businesses believe that if they don’t receive many complaints, their customers must be satisfied. However, a business may be receiving complaints but without formal system of recording complaints they may not be properly addressed or communicated to management.

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Case study – Complaints! What complaints? 

The management of a large retail chain believed it had very few complaints. Head office had no central system for recording and handling complaints and relied on information from individual store managers.

Head office management was therefore unhappy to learn from Fair Trading that it had received a significant number of complaints against the business over a period of three months. Without formal complaint records within the company, there was no opportunity to fix and prevent complaints from occurring in the future. Since Fair Trading drew this to the retailer’s attention, it has set up a centralised complaint handling system and has begun to train staff. Fair Trading is now receiving fewer complaints about the business.

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Case study – Solve my problem now! 

A woman stormed into a plumbing company’s head office demanding to see the manager about an unfinished plumbing job. She was looking for a fight because she had repeatedly asked that the plumbing be fixed for her daughter’s wedding party next week, and there were only two days to go.

The manager invited her into his office and allowed her to let off steam. He demonstrated a personal interest in her predicament and agreed that having leaky pipes in the toilet would be a problem. He then calmly explained the reasons why the job had been delayed – there had been heavy rains and many emergency plumbing jobs to be carried out. In fact, a young couple nearby had their whole house flooded.

He then picked up the phone to the plumber handling the job and told him that he and the customer were anxious to have the job finished by the weekend. The plumber privately explained to his manager that he had four jobs that day and they were all emergencies. The manager then informed him that this was also an emergency. He asked whether he could come and patch up the pipes for the weekend and return the following week to finish the job properly? The plumber thought about this for a minute or so and said that, yes, he could temporarily stop the leaking for a couple of days and then fix it properly next week.

The manager explained this to the customer who immediately perked up. No, she didn’t mind the plumber coming back next week to do the job properly, just as long as he could stop the ugly streak of dirty water leaking from the back of the bathroom toilet. The manager assured her that there would be no leaking pipes during the wedding party.

The customer left the office feeling vindicated. The company had recognised her problem as important and had solved it to her satisfaction. When the plumber arrived the next day he left her a fridge magnet with the company’s phone number on it. It was immediately placed on the fridge and was the subject of much discussion at the wedding party the following day.

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