B2B International
B2B International

December 17, 2008

Customer loyalty is of paramount importance in today’s economic climate.  We have many opportunities to satisfy our customers but what if on the one occasion we don’t reach the dizzy heights we have set ourselves and a customer wishes to make a complaint!

New research conducted by Charter UK within the contact centre industry supports the theory that companies who manage their customer complaints well are more likely to retain their customers than those who don’t.

According to the research:

  • 78% of those asked believe that managing complaints will help to retain customers. 
  • A further 50% use complaints management intelligence to form the basis of their customer retention strategies. 
  • 52% of respondents analyse their customer complaints to help drive business improvements.
  • One in eight (13%) do not analyse customer complaints at all.

A quick glance at the website of the New South Wales Government’s Office of Fair Trading gives more weight to the argument that customer complaints should be thoroughly analysed and handled with care:

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.

Some interesting facts:

  • Two-thirds of people who complain to an organisation are not satisfied with the way their complaint is handled
  • 90% who remain dissatisfied with how their complaint was handled will not purchase from that company again
  • Each dissatisfied complainant is estimated to tell 9 others about their negative experience.

Yet if you can handle a complaint well:

  • 83% of customers who are satisfied with how their initial complaint was handled will become loyal to you and your brand
  • The average satisfied complainant is likely to recommend you to 5 others.

From all the customer satisfaction and loyalty research we carry out at B2B International, what we do know is that you’re unlikely to be able to satisfy all your customers all of the time.  By being proactive and understanding what customers are complaining about, it not only gives you a second chance to rectify a negative situation but it also allows you to take the necessary steps to go beyond the call of duty and maybe even delight the customer by doing something that is out of the ordinary.  Make sure your company focuses on turning customer complaints into a positive experience and you never know, it could be the first step in rescuing a customer and gaining their undivided loyalty.

Of course, there is another school of thought – one which would suggest trying to avoid customer complaints altogether.  Why put the emphasis on handling customer complaints well, instead of on trying to reduce the complaints in the first place?

In their recently published book, "The Best Service Is No Service", Bill Price and David Jaffe argue that, in gauging their effectiveness in terms of the number of customer calls they handle, most customer service operations have got it wrong.  Price and Jaffe contend that many customers simply want to purchase your products and services; their only reason for going through to the customer service department is because something is wrong or unclear about the company’s offer.  If you can eliminate the need for a customer service department, you can congratulate yourself on having got to the root of the problem.