Managing customer complaints is an important part of steering an organization in the path of excellence. The unfortunate fact however, is that only few companies know how to deal with complaints. Most managers either choose to bury their heads in the sand waiting for the complaint to simply fade away. However, most of the time this does not happen and in the end, the back-log of complaints often deals a big blow to the organization’s image.

Every organization has to deal with an angry customer. The challenge is to handle the situation in a manner that leaves the irate customer thinking you operate a great organization. This article emphasizes the importance of proper handling of complaints.

Managing Customer Complaints – The Expert’s Guide

Benefits

Creation of a customer-centric culture

A customer-centric culture helps you improve your relationship with the customer – and this brings numerous benefits to the organization. For instance, it has been proven (in several field researches) that companies that handle their customers well make more profit than ones that ignore complaints. Therefore, if you are seeking to take a holistic and organizational approach for the betterment of your company, you need to spend ample time thinking about how to deal with complaints and other forms of feedback. Note that, to any business, the customer is king.

Significant reduction in operating cost

According to research many complaints come from inefficient or deficient business processes and procedures (in addition to management issues). If unchecked, most complaints keep recurring. The more a complaint is repeated, either by the same or different customers, the more the profit it siphons of the system. By carefully tracking complains and fixing them you can significantly cut down on operation cost that may come about as a result of inefficiencies in your organization. Besides that, you can easily spot loopholes within your organization that slow down your development.

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By investing in good complaint management systems, your organization can address issues that have a significant impact on the cost of operations and also arrange on how to boost employee morale and productivity. This way, the manager can relax knowing that he will get more results for every payroll dollar spent.

Better customer acquisition

The more customers you have the better your business becomes and the bigger operations get. But in order for that to happen you have to appreciate the fact that it costs a lot more acquire a new customer than retaining one through good customer service. According to research, 50% of customers who abandon an organization for its competition do so due to back handling of complaints. If you are looking to expand your market, at the least cost of marketing possible, the writing is clear on the wall. It’s high time you consider focusing more of your resources and efforts towards managing customer complaints.

Reduction of brand and market damage

Whenever a customer’s complaint goes unattended to your brand image is badly damaged. Likewise, whenever a customer’s query is poorly (and unprofessionally) handled you stand to lose a significant chunk of your market. Just imagine how much you spend on marketing and sales per year just to get more new customers? Would you like all of that money to go down the drain as you watch?

Well, believe it; most companies are actually wasting a chunk of their marketing budgets due to poor handling of customer complains. If you want to improve the yield of your budget significantly, you need to seriously consider adopting the best practices of customer complaint handling. In return you can expect to get a stronger competitive advantage and enjoy higher profitability.

Increased customer loyalty

Statistics show that up to 75% of customers are willing to do business with an organization again if their complaint is handled in a caring and considerate way. Besides that, 95% of customers say that if that particular complaint is handled properly on the spot, then they will live to do business with the organization again and again. If you want to scale up your organization, the easiest path for you is the path of putting yourself in the shoes of your customer.

If you can empathize with them and even sort out their issues within the least time possible, then you have a higher chance of retaining them. In addition, you can grow your market base faster as the customers will refer more and more of their friends to you. Customer loyalty is one of the hugest driving forces behind most top companies’ success. Make sure you safeguard this loyalty to take your organization to the next level.

Improved customer experience

Although no one likes to receive complaints, they often present an opportunity to identify and rectify specific problems within the system. At the end of the day (and if handled properly) complaints can help you to develop your relationship with your customers. You can actually take advantage of the complaint leveled against your organization to demonstrate that you value their trade e.g. by taking their concerns seriously. Normally, managing customer complaints brings good results to the organization. Some researchers have found out that a well treated customer will tell 4 other people!

Increased sales revenue and profitability

Companies with poor service quality normally average 1% return on service (ROI) and end up losing about 2% of their market share every year. On the other hand, companies with high customer service quality tend to hit an average of 12% return on service (ROS) and may grow their market share by 6% a year. Successful organizations have put in place highly structured and fine-tuned complaint management systems.

They have also trained their staff giving them confidence to tackle difficult complains. Overall, although excellent handling of customer complaints isn’t easy, organization that take the trouble to do it the right way end up reaping the rewards in terms of more profit and consistent market share growth.

Final word

It is imperative for us to shift our thinking about complaints. We should embrace them and see them as an opportunity to take our brand reach a notch higher. Remember, managing customer complaints is key to attaining ideal cost ratios more so by identifying points of weakness that need to be rectified.