Required Reading: Complaints Are the Gifts That Keep Giving

With so many consumers still dissatisfied even after complaining to companies, too many businesses are scripting, outsourcing, or seriously mishandling their customer service, consultant Janelle Barlow says in her book, A Complaint Is a Gift: How to Learn from Critical Feedback and Recover Customer Loyalty. These companies, she adds, fail to recognize that customer complaints are a gift that, when handled well, will reap huge rewards. CRM editor Leonard Klie reached out to Barlow for more on the relationship between complaints and loyalty.

CRM: You say complaints are a gift since so few consumers actually complain. Can you back this up?

Barlow: When John Goodman founded the Technical Assistance Research Program in 1974, he discovered that only about 4 percent of people will complain if the problem is small. Some (but not all) do not even complain when large mistakes are made. The exact numbers might not matter because they are so consistent and have been for the past 50 years.

You also say complaints that are handled well transform into experiences more positively remembered than if no complaint had been made at all. How and why do you think that is the case?

Mary Jo Bitner, a professor of marketing at Arizona State University, in 1990 analyzed 700 service incidents from airlines, hotels, and restaurants and found that of all positive memories customers have of good service, 25 percent started as a failure in service delivery.

Businesses do not need to run away from service breakdowns. Each company representative has a chance to turn a negative situation into a positive experience for the customer. It’s a genuine opportunity to connect with customers and learn from them. And when service representatives show they care and make a personal connection with the customer, that matters in terms of long-term memory.

Given this, how and why are so many companies mishandling complaints?

There is no single answer to this question. Complaints are as varied as customers. Unfortunately, many companies believe a scripted approach is best. I’ve heard managers ask, “How difficult can handling complaints be? You just have to get their personal data, say, ‘I’m sorry,’ and fix the issue according to our standards.” This approach doesn’t work. Even if all the boxes are checked in terms of what managers want them to say, that doesn’t result in great complaint handling. Complaints are personal to the customer. They are not one size.

What do companies need to do differently to effectively handle customer complaints?

First, companies need to understand that not everyone knows how to show empathy or read body language and understands the cost of losing customers through poor complaint handling. Complaint handlers need extensive and regularly updated training. CSRs need opportunities to talk with and learn from each other. CSRs need to feel they aren’t going to be fired for every small mistake they make. They need to know their company will support them when customers become threatening. They need to know the products they are representing and even be able to answer such questions as “Why are your products priced higher than [the competition’s]?”

You say customer complaints require empathy and a human connection. How can companies instill those qualities into their CSRs?

Learning to be more emotionally intelligent is possible, but it requires specific behavioral practices. It helps to see colleagues and managers behaving with emotional intelligence. Because this is an extensive set of skills, it requires regular and ongoing practice. Empathy, in particular, needs a great deal of reinforcement because, after a long day of dealing with demanding customers, it’s easy for empathy to fly out the window.

Does the type of response differ depending on where the complaint is made (online, in-person, on the phone, in an email, etc.)?

Different responses are necessary when complaints are made in the ways stated, but the same approach can be used whether online or in person. We teach the three-step Gift Formula. It begins by showing gratitude that the customer is telling you about an issue and giving you a chance to fix it. The second step involves finding out what happened, so questioning is very important. The third step is to do everything you can to solve the issue inside your organization so that you don’t have multiple complaints about the same issue.