Customer Complaints: bane or boon?

Do you have customer complaints? Whenever I posed this question to senior leaders or business owners, a good majority of them shared that there might not be scope for complaints in their business but certain times customers might be sharing their feedback. In case further probed they tended to say that in the unlikely event of complaints, they definitely received the attention they deserved and so those complaints must have got resolved!

In all these instances as above I had felt that those businesses did not have a clearly defined process for handling customer complaints. They didn't have any means of tracking customer complaints and their follow up status. Neither they had the opportunity of looking at the root causes and acting on them. They probably felt it important to cover up complaints for managing their reputation or image or customer perception. They believed acknowledging complaints and transparently addressing them could lead to loss of face, loss of customers, and deterioration in market reputation. However, this cannot be further from the truth.                                                                                                                  

Companies that demonstrate a standard and clear complaint handling practice to resolve customer grievances within a reasonable time are appreciated and preferred by customers. There are many examples where companies accepted problems with their products and offered redress. In 2007, a large no of certain models of Nokia cell phones were reported with serious battery problems. Many had believed this problem would make Nokia lose its market share to competitor Motorola. Nokia didn't lose any time and promptly carried out wide media campaigns to acknowledge the problem and offered a clear redress procedure to all the users! Later it was found that customers trust in Nokia brand had improved and sales had increased instead of plummeting. Similar examples are there in the automotive industry - Toyota had recalled defective cars and gained in customer trust and loyalty that continues till present times!

So, shoving complaints under the carpet doesn't help. On the contrary, it hurts. A competitor may find out and carry out a negative campaign, and if that happens the customer would feel cheated and would discontinue relationship. If the customer finds out himself, he is not going to like it either and lose faith. Unhappy customers tend to share their negative experiences faster and wider than happy customers! As a result, retention of customer and perception of the product get hit and this could potentially bring down a business.

Smaller the company, bigger would be the impact of customer complaints. So I always want my client SMEs to focus well on customer complaint handling - acknowledging the complaint and offering support improves the faith of a customer. Customers like the added attention and resolution of the problem builds faith that the supplier isn't shying away from its commitments. Customers prefer to continue and refer companies that provide higher assurance in post sales support.