Nobody likes to hear bad news, but successful companies recognize that negative feedback is a vital mechanism for improving their products and customer service.
So when they hear that there’s bad news that customers aren’t telling them, many companies assume it is product or service-related. They should be asking another question, though. Why aren’t customers sharing the negative feedback? The answer is critical to understanding the customer experience and potential loyalty risk.
Your customers won’t share feedback with you if they don’t believe you’ll take action.
Registering a complaint with a large company isn’t easy — often it involves wading through several phone menus, waiting on hold, then speaking with a customer service rep who may not be empowered to fix the issue.
As a result, many people just don’t go through the complaint process because it’s more of a headache to complain about the problem than the problem itself. And that’s how we end up with products that don’t work, services we don’t want, and ongoing charges that we don’t think we should be paying for.
If customers don’t think they’ll get a resolution to their issue, often they won’t bother to raise it.
A customer who does not bother to let a company know when they have a problem is a customer with serious loyalty risk. In a 2017 Small Business services study, Verde found that customers who take the time to contact when they have a problem are 50% more loyal than non-contactors, assuming that they are fully satisfied with their problem resolution. This is typical for nearly all customers across business verticals, both B2B and B2C
That’s good news for companies that make it easy for customers to register complaints and focus on positive resolution. If you are able to fix a customer’s problem and they’re happy with the result, generally they end up every bit as loyal as if they had never experienced an issue.
Citing the same 2017 SMB study, Small Businesses who experienced a problem were 80% less likely to be a Promoter of our client’s services. But when their problem was fully resolved, all that lost loyalty was recovered.
So how can companies use this dynamic to their advantage?
Make it easy
Customers typically have many options when it comes to lodging a complaint — phone calls, online chat, email, web forms, and even social media. The instructions for each should be clear, and all options optimized for simplicity and speed of response. How many customers calling in for help have had to navigate multiple voice menus, then wait in an endless call queue?
Make an effort
When customers do take the time to reach out, your team needs to know that the objective is to understand and fix the problem. Train and empower everyone, particularly customer service, to focus on a positive outcome — when the customer hangs up they should be happy with the results and satisfied with the interaction.
Follow through and follow up
There’s nothing worse, from the customer’s point of view, than to think you have a problem resolved, only to find out it isn’t. Whether it’s a credit card charge that wasn’t reversed as promised or a missed service call, this event is often the final straw for even the best customers.
Companies need to ensure they’ve taken all the steps to fix the customer issue, then they need to take a final step. They should follow up with the customer to confirm everything is correct, and to make sure the customer is satisfied. This is what is known as a closed loop. Learn more about Verde’s full-service closed-loop tracking program.
Be honest and open
I’ve written about this in a previous post, but it bears repeating. An honest discussion with customers is often the best way to resolve their issues and retain their loyalty. Admitting that your company isn’t perfect, acknowledging your errors, and committing to fix them is a great beginning — just remember it’s all about the follow-through.
Michael Tropp is Vice President, Business Development of The Verde Group and WisePlum