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Why customer complaints are good for your business

Customer complaints

Customers have more power than ever.

If customers have a positive experience with your company, they will share this experience with friends, family and connections - which in turn can lead to new business.

All at zero cost.

But what happens if you fail to provide a positive customer experience?

The answer is simple. Your customers will complain.

According to research by Esteban Kolsky, 13% of unhappy customers will share their complaint with 15 or more people.

Furthermore, only 1 in 25 unhappy customers complain directly to you.

1 in 2 -customers complain

And for customers that don’t complain, they just stop doing business with you. The overwhelming majority (91%) of unhappy customers who don’t complain simply leave.

There is a silver lining here:

A customer complaint highlights a problem, whether that's a problem with your product, employees or internal processes, and by hearing these problems directly from your customers, you can investigate and improve to prevent further complaints in the future.

Furthermore, research finds that customers’ whose complaints are handled quickly can often turn into loyal customers and even brand advocates.

In fact, a study by Harvard Business Review found that customers who have a complaint handled in less than 5 minutes are willing to spend more on future purchases.How fast response times impact customer loyaltySimply put, a customer complaint can become very profitable when you can resolve a problem quickly.

How to analyze customer complaints

When you receive a complaint, the first step is to analyze it.

Complaint analysis is used to track, categorize and handle customer complaints.

When a customer makes a complaint, he or she is voicing a concern in relation to your product or service. However, not all complaints are to be treated equally and there are several questions to ask yourself before you take action, including:

  • Has this happened before?
  • Have the complaints been recorded?
  • How often does the same complaint arise?
  • Is there a pattern to this complaint in how it was received?
  • Has the same customer reported this previously?

By answering these questions, you can take the necessary steps required to prevent them from happening again.

For example, if several customers complain about a specific issue, you can use their feedback to improve your product or service.

Or, if you are currently working on a solution, yet you still receive complaints from your customer base, you can create an email template for support that explains, in detail, how you are going to solve it.

Create customer complaint guidelines & policies

If you want to provide a consistent, satisfactory experience with your customers, establishing formal guidelines and policies helps to log, investigate and resolve any customer dissatisfaction and problems.

The overall goal of these guidelines and policies are meant to:

  1. Turn a dissatisfied customer into a satisfied customer
  2. Align your customer service team’s response and actions
  3. Analyze areas of your business to improve experiences

Customer complaints are opportunities to collect information about a customer’s needs, opinions, attitudes, and beliefs. In most cases, upset customers are looking for help and clarity, not trouble, and are simply responding to common issues such as:

  • Product or service quality
  • Safety concerns
  • Timing
  • Color and sizing
  • Overpricing
  • Accidental charges
  • Shipping errors
  • Broken promises
  • Misleading advertising

The key to overcoming these common issues is by creating a clear process and a coordinated response that addresses the customer’s complaints.

Here are a few best practices when it comes to training your employees and creating guidelines and policies for how you business handles customer complaints:

  • Any problem must be documented and reported to the appropriate person for resolution;
  • Establish a ‘complaint owner’ (i.e., someone who is in charge of resolving the complaint);
  • Deliver a response within a predetermined amount of time; e.g., a complaint is received within 24 hours and a plan to resolve it is established within 72 hours;
  • Define actions and behaviors your team must follow to deliver a consistent customer resolution experience;
  • Cases remain open until the root problem is identified and successfully resolved.

There are many ways to handle customer complaints effectively. Let’s look at 7 specific strategies that help to improve a customer’s experience.

7 ways to handle customer complaints

When you receive a customer complaint, follow these tips to help transform it into a golden opportunity for your business.

  1. Listen and understand
  2. Inform your team
  3. Apologize
  4. Find a solution
  5. Record feedback
  6. Follow up
  7. Exceed expectations

1. Listen and understand

Always listen to your customers. They have complained for a reason and it is important to understand why they are complaining. Research shows that customers care more about quality than a fast response. Take time to listen and understand what their problem is.

Pro tip: To maintain quality from all support personnel, use a customer service knowledge base.

2. Inform your team (and keep them in the loop)

A rep receives a complaint from a customer.

They can either:

  • handle it and stay silent or
  • share the complaint with the team. 

Which one benefits the business most? Sharing it, right?

It's the only way an organization can understand exactly what’s wrong (and how to fix it). When you receive a complaint, notify your manager to discuss what happens next.

In some cases, it will be resolved quickly (i.e. wrong contact details need updating) and in other cases (i.e. faulty product), it’s being shared with senior management and will be addressed at a higher level. Either way, sharing this information internally has a bigger impact.

3. Apologize

Don’t be afraid to apologize for a mistake. Many customers are simply looking for an apology and acknowledgement of their complaint, yet so many businesses are hesitant to admit when a mistake has been made.

Don’t underestimate the importance of an apology!

Research by The Nottingham School of Economics found that unhappy customers are more willing to forgive a company that offers an apology as opposed to being compensated.

In the findings from the study, 45% of customers withdrew their negative evaluation of a company in light of an apology, whereas only 23% of customers withdrew their negative evaluation in return for compensation.

apology vs compensation customer complaints

The researchers concluded that when a customer hears the words “I’m sorry”, it triggers an immediate instinct to forgive.

Don’t just stop at the apology, follow through with a promise to resolve the complaint.

4. Find a solution

When your customer has a legitimate complaint, you need to find the root cause and solve it.

Give your customer service team the authority to handle the majority of customer complaints to avoid passing your customer onto a series of people and managers. If the issue has been or can be repeated, make the necessary changes so you do not receive another complaint.

Let's take a look at a customer complaint example:

Imagine you have a customer whose account is up for renewal. You reach out to them manually, before taking payment (as required by the GDPR) and they are happy to continue with their subscription.

But, for some reason or another, you charge them twice for the same amount.

The result?

They are not happy and decide to cancel their account.

Giving your employees the authority to handle these kinds of issues means allowing them to issue a refund and handle the request without having to escalate the case to a supervisor. It also means that the customer gets their issue solved quickly.

Free template: Once you have issued the refund, you can send them an email using the template below.

Issue refund email template

5. Record their feedback

Your customer complaints could be a goldmine for finding exactly how your company can improve.

Maybe there’s something wrong with your product when customers use their mobile device, or there could be something missing from customer service replies.

In order to understand what you need to improve on, start documenting the comments and complaints to find patterns and trends that are recurring.

Whatever it is, document it for later and make time to inspect and reflect.

(One way to document their feedback is in the contact card in your CRM. You can then export a list of complaints on a monthly basis to review and share internally).

6. Follow up with the customer

You’ve solved the problem, shared the news with a customer, but you haven’t heard back. Now what?

Easy. Follow up with your customers to make sure they are satisfied with the solution. This can be in the form of a follow up email or survey asking for feedback on how the complaint was handled.

Almost 70% of customers leave a company because they believe you don’t care about them.

Why do customer leave a company?

Very few companies follow up with their customers.

Following up shows you care. And this makes the customer feel important.

Not sure how to follow up?

Use the template below.customer service satisfaction template7. Exceed expectations

You have acknowledged the mistake, fixed the problem and followed up.

Now, it’s your chance to go one step further and exceed customer expectations, whether this is to send a hand-written thank you note or to give the customer early access to your new product features. 

Remember that customers pay close attention to the small details when they’re feeling distressed. The way you interact with customer complaints after their problem is resolved sets the stage for the rest of your business relationship.

In fact, if your post-complaint actions are done successfully, the next time your customer talks about your business, this will be the message they communicate most

Customer complaint checklist

Solving customer complaints is a lot like putting out fires. It’s reactive, and no matter how good your product or service is, it’s impossible to please all of your customers.

The next time you receive a complaint, use the following 5 step check list in order to respond, resolve and keep your customer happy.

  1. Acknowledge the complaint
  2. Inform the customer that you are taking action
  3. Record and categorize the customer complaint
  4. Resolve the complaint according to company policy
  5. Follow up with the customer to make sure they are satisfied

Handling customer complaints is an ongoing process. You can use web forms to collect complaints from your website and then use customer service software to store the complaint on each customer profile. Remember to monitor complaints on a weekly or monthly basis so you can track new complaints and trends, and be sure to follow up on open complaints.

It's worth reminding, but if a customer leaves you, you lose business. So, don’t be afraid to escalate reoccurring complaints to top management in order to get them resolved quickly.

Proactive complaint handling

As mentioned earlier, not all customers will complain directly to you.

The internet enables customers to share their feedback in multiple channels, including forums, comparison websites, social media networks and more. Without taking the necessary steps, these complaints can snowball, and even go viral.

This means you need to engage in social listening and get proactive in customer complaint handling.

Finding complaints online is not easy, but here are a few suggestions on where to start:

  • Have any negative comments been made on your blog?
  • Has your brand name been mentioned on Twitter or LinkedIn?
  • Do customers post messages on your Facebook page?
  • Has anyone left a bad review on your Google My Business page?
  • Are the comments made on your YouTube channels positive?
  • Is your brand listed in any complaint directories or forums when you search in Google?

All these channels will need to be monitored. If you don’t respond, readers will assume you don’t care.  If you respond to messages online, it can be seen as though you are making an effort and that you do care. This act alone can inspire brand loyalty and customer confidence.

Conclusion

Customer complaints are important.

And there’s no better way to collect direct feedback from your customers and improve your product or service.

However, the way you handle a complaint is the difference between keeping a customer or losing one. So, the next time you receive a customer complaint, listen to what the customer has to say, apologize (!), find a solution and follow up to see if he or she is happy with the way you are handling it.

In doing so, you are on your way to creating more loyal customers, improving your product and delivering a better quality of customer service.

Looking for a more effective way to manage customer complaints?

Book a free demo of SuperOffice Service and we’ll show you how to manage, track and respond to your customer base.

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Comments

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Pam Mannell

9 years ago

Very much along the same lines as our recent blog - customer service is so important, but you need to know what your customers are saying about you http://www.crmessentialsltd.co.uk/what-do-your-customers-say-about-you

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Steven MacDonald

9 years ago

Thanks for commenting Pam - You're absolutely right! It's incredibly important, and there are a lot more channels to follow up with your customers in nowadays, but for each complaint made that goes unanswered a business can be losing hundreds if not thousands of pounds.

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Ravi Sharma

8 years ago

Customer complaint good for business because when customer doesn't complaint any problem then how i can understand where our business stand.

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Steven MacDonald

8 years ago

Excellent point. Thanks for commenting Ravi.

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Shivaji Bombale

2 years ago

Customer feedback is required for further improvement in product and very important for business growth.

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Ian Zafra

8 years ago

Excellent post! How do you put customer complaints to good use? By using it as motivation to become better.

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Steven MacDonald

8 years ago

Well said, Ian! And thanks for the link to your post. Great read!

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Daniel

8 years ago

Steven, Do you think how prompt customer's complaint are addressed and solved can also be an issue ? Some companies takes too much time solving customer's problem. This can also result in bad word of mouth against that company.

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Steven MacDonald

8 years ago

Thanks for the comment, Daniel. I agree, some companies do take too long to respond. And yes, I do believe that speed will help solve a customer complaint faster. Research shows that customers value quality over speed, however, there's nothing worse than a customer complaining and not being acknowledged. I recommend acknowledging the complaint first, and then working on solving it. You can never over communicate to an unhappy customer.

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Magnolia

7 years ago

There's definately a great deal to learn about this issue. I like all the points you made.

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Fausto Vagliardo

7 years ago

Thanks for sharing

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Sarah Garcia

7 years ago

I agree upon the fact that the Customer Complaints Are Good For Your Business but only if you can resolve the soon after they raised it, otherwise it will drag your business to a very bad condition. The customer complaints gives you an idea about your business that what need to be done to make it more better.

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Steven MacDonald

7 years ago

I completely agree, Sarah! Customer complaints do provide an idea about a business. Thanks for leaving a comment.

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Hayden Cote

7 years ago

Our business has been mentioned on a blog in a negative way and I am not sure how I can get the anonymous blogger to remove the post.. I've emailed her but have had no response. What are my options and what should my next step be?.

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Steven MacDonald

7 years ago

Thanks for commenting, Hayden. I recommend connecting with the blogger on social media and trying to contact them that way.

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Raymond Reddington

7 years ago

Absolutely right, customers deserve the beat that can ever come out of any company and for real, if a customer must present a complaint, then it's as a result of some dissatisfaction somewhere. Customers complaint handling personnel need to be quick addressing complaint if they are to re-commence business with complainers as soon as possible before the business can lose an extra dollar.

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Steven MacDonald

7 years ago

Great comment, Raymond. Completely agree. Customer complaint handling needs to be quick at addressing the complaint.

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daniel

6 years ago

This is a really article on customer complaints!

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Steven MacDonald

6 years ago

Glad you think so, Daniel. I appreciate it!

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Mila Rosmoses

6 years ago

Great article! Good info on how to handle customer complaints. Thank you!

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Mark Palmerto

6 years ago

How can you minimize customer complaints for an online business? The reason I ask is that in offline businesses, a store manager can briefly explain the issue directly to customers.

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Steven MacDonald

6 years ago

That's a good point, Mark. I think by using the tips in this blog, plus the additional tips you can download at the end of the post will help you handle customer complaints online.

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Simon Kayne

6 years ago

Yes! Those thoughts are indeed right. Customer complaints can be useful for your business. They will be your guide to improve your services or products. Always listen to your customers because they will be the one who can bring your business to success.

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Aditi Bansal

6 years ago

A satisfied customer may share their good experience with three friends, And for each customer that complains, there are anywhere from tens to thousands of people that don’t complain – And they simply stop doing business with you.You can use positive feedback to provide social proofing and attract new customers. You can use negative feedback to fix any internal processes and make your customers happy.Your company will hear about a complaint either from the customer directly, in written or verbal communication or by leaving your brand to shop with a competitor due a negative experience.

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Charlotte M

5 years ago

Complaints certainly helped our business out. We were able to see what are down falls were and look at ways to overcome them. We decided to invest in customer service software, which has really excelled our customer experience!

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Damon Burton

5 years ago

It is important to stay calm, find a solution and make sure the problem does not come up again if you want to keep your customers. Doing so will help turn even the toughest complaint into a pot of gold.

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Damon Burton

5 years ago

It is important that when it comes to dealing with customer complaints, you need to consider your organizations service, quality, communication and response time. Look at the cost, billing issues and if problems are regularly followed up. Glad to know this. Thanks for sharing this article.

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Jack Coen

5 years ago

Extremely great article! Complaints create more improvement on product of services and quality.

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Gunjan Dave

5 years ago

You have done good work for sharing customer complaints for business. Really interesting and useful post.

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Dew Surrey

5 years ago

Hi Steven, This is a good tip, short but very accurate info… A must read ! Thank you for sharing.

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Kevin Houghton

5 years ago

When a customer complains about your service or products and they were arguing about your support team, you have to deal with it smoothly and make sure the issue will be solved soon without it reflecting negatively on your business.

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Lineisy Kosenkova

5 years ago

Thanks for great insight on customer complaints! We all need to shift our thinking about customer complaints. We should embrace them and welcome them as they truly can be an organization’s best friend!

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Govind

5 years ago

There are various pros and cons of customer complaints about a business: PROS: 1. If a customer complaints are frequent it means your services are not good enough and you have to amend them. 2.A business could easily spot its lacking part inside the organization. CON: The value of your business might get hurt.

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Steven MacDonald

5 years ago

That's a great point, Govind. You're right!

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johnway

5 years ago

Good article! It's well written which really help me understand customer complaints. Thank you for sharing.

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Carlos

5 years ago

Excellent article! Thank your for sharing! Is there any company you can recommend as a case study in costumer complaint management as a visible strategy behind??

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John Lee

5 years ago

Great content! Thank you for sharing for us. It's very helpful and useful on how to handle customer complaints. I enjoyed reading Steven!

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Steven MacDonald

5 years ago

Thanks, John!

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Alan Jackson

5 years ago

Great article. The only problem is that customers live in the present, and businesses need to understand what customers are thinking in real-time about their products or services. Understanding customer preferences now help fix deficiencies and can help failing businesses increase customer retention.

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Vivian Guttman

5 years ago

Hi, Steven., awesome and thought-provoking article you got here! I like the idea of turning complaints into opportunities of selling. Instead of taking customer complaints as bad for your business, turning it around and making it an avenue to understanding your customers, help achieve customer success is a brilliant idea. This ultimately leads to improved user experience and customer loyalty.  I’d like to add an equally important development in customer support. Until recently, customer support has been exclusively handled by support teams using multi-channel support platforms. Now, we are experiencing a reinvention of customer support which now involves everyone from development, sales, marketing, and customer success teams. SaaS companies are now becoming more customer-centered and are involving stakeholders in the customer support process. By training everyone about customer support, a backup support force is created which can reinforce helpdesk or support teams when overwhelmed with customer complaints.

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Richard Ward

5 years ago

Interesting post on customer complaints. I agree with the points that you have mentioned in the above article as customer complaints are very important for our business. I will keep this in mind!

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Marc Whittaker

5 years ago

Thanks for writing this article. I've been searching for something like this on customer complaints for a long time. Very interesting topic!

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Hammad Akbar

5 years ago

Hi Steven. Very important blog on customer complaints. In the case of every business, it will be very helpful to satisfy customers. Thanks a lot

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Louise Owen

5 years ago

When you have a complaint about a business, there are several places you can report to. First, you must be clear on the outcome that you want. This will form the main objective of the action. Good Post Steven. Thanks for sharing.

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Oliver Clark

4 years ago

If you have a complaint about a business, appropriate action can only be instituted when you report it to the correct office. In every country, there is a consumer protection agency that works towards protecting buyers.

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Jason Gunther

4 years ago

"If customers have a positive customer experience, they will share this experience with friends, family and connections, which in turn can lead to new business. All at zero cost." At the end of the day, you would want customers who would stay. Customer satisfaction should be a priority by your business.

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James Brewerton

4 years ago

Totally agree with your points! Customer complaints might appear to be a negative at first, but if acted on, they can be a great source to help you improve marketing, product and the overall customer experience.

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Vikran Singh

4 years ago

Very important blog on customer complaints. In the case of every business, it will be very helpful to satisfy customers.

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Puneet Sharma

4 years ago

Nice and informative post. I believe that customer complaints are really important for business growth.

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Mark Louson

4 years ago

I can't believe that only 1 in 26 customers actually complain! It just goes to show you how many are unhappy, but never let you know how they really feel about you, your product or brand. Fantastic article!

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David Smith

4 years ago

When you have a complaint about a business, there are several places you can report to. First, you must be clear on the outcome that you want. This will form the main objective of the action. Good Post, Steven. Thanks for sharing.

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Steven MacDonald

4 years ago

Thanks, David! Glad you like it.

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jyoti sharma

4 years ago

Customer feedback is important as it gives a real view point as to how your business is being done. If there is no feedback regarding the work a person or a firm does then the chances of improving and getting on the top are always minimized.

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Agahan Bashim

4 years ago

Don’t be afraid to apologize for a mistake.

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Steven MacDonald

4 years ago

So true!

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Paul Bogdanovich

4 years ago

Good article, this type of content will never get outdated. Customer complaints are actually very beneficial and I believe it's of great importance to set some objectives when analyzing the data from the complaints. The better you understand, the greater your opportunity to utilize it for growth.

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Roland Pfister

3 years ago

Customers are the king of market these days and what they say about you is important to know. This blog has explained the importance of customer complaints so well. Thanks for this blog, Steven.

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Steven MacDonald

3 years ago

You're welcome, Roland!

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George Devin

3 years ago

Gaining loyal customers is directly related to the resolution of claims and the treatment of customer complaints. In short, the customer is saying what he does not like or what bothers him about the product or the brand, and gives you the opportunity to solve it so that the same does not happen with other customers. That's why customer complaints are good for your business.

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Steven MacDonald

3 years ago

Well said, George!

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Yan

3 years ago

Your article awesome. Customer complaints is a signal for to improve the quality of service, because customer satisfaction is number one.

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Shreya S.

3 years ago

Customer complaints can truly help in business development. If you want success you have to take care of your customers!

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Jim Scherr

3 years ago

Steven, Great job summing up complaints and resolution. We tell our reputation clients this info all the time. You would be surprised how many companies have no resolution team or customer support. Or they just avoid the problem all together. Jim

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Adam Smith

3 years ago

Completely agree with the article as customer complains help the business identify their loopholes. It will again help in improving the overall efficiency of the business.

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Jabbar

3 years ago

What we can say to customers if they demanding more than what we can give like according the payment? How we could we handle such customers

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Steven MacDonald

3 years ago

That's a great question! If it's a long-term customer, then I would issue a full refund. If it's a new customer, I would suggest reaching out to them to explain a full refund isn't possible, but perhaps there's a middle ground where you both can meet. i.e, partial refund, a free ticket to a paid conference, 2 days free training, etc.

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Gerry Copeland

3 years ago

Once you understand how your business displeased a customer, you can start to learn possible solutions for those issues. Businesses that do not listen to unhappy customers are never able to meet their true potential. There is usually a good reason why a customer is not satisfied with a certain aspect of your business. It’s because there is still room for improvement.

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Anris Vaitis

3 years ago

I also believe that straight up apologizing and following-up is the absolute best tactic. We have noticed that in many cases even one round of complaint-based improvements can generate a couple of sales that wouldn't occur otherwise, and it's usually the complaining client returning and bringing a friend. I've no idea why that works (my position is not related to customer management directly), but it seems that such a customers thinks he/she is now being treated preferentially, like "they paid attention to what I said, it must means they pay special attention to what I say". And, of course, they are happy about that.

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Steven MacDonald

3 years ago

That's a great point, Anris. I like your way of thinking!

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Micki

3 years ago

I respect local businesses a lot, mainly because their customer service sometimes offers a personal relationship. The water company I'm serviced by in Toronto---Cedar Springs---knows me and many other clients by name. There's not many places that connect with you in that way, and its a pet peeve of mine to feel forgotten. I actively seek out those personal relationships as a consumer.

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Jack Bravo

3 years ago

Customer feedback is important and helps improve your business, if you listen and act upon it.

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Rob S.

2 years ago

While I don't believe that customer complaints are "good" in the literal sense, they do provide benefits in the long run. When these complaints come in, especially those that are common across the board, businesses have the opportunity to improve. They can pivot, thus providing better service to customers that will be likely to return.

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Perry A.

2 years ago

Indeed! Customer complaints can improve businesses in so many ways because nobody would want to deal with a company that has weak customer service. Their complaints should be a motivation for the company to do better in the future!

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Kimmy S.

2 years ago

You're right! Customer complaints can be good for businesses. Thank you.

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Manohar Karande

2 years ago

Thank you for sharing tips about dealing with customer complaints.

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Eva

2 years ago

Nice post! I believe that customer complaints are really important for business growth.

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Seth Harper

2 years ago

I'm totally fine with hearing what customers (or website visitors) have to say. Even if it's negative, it's a great opportunity to improve and come back stronger. There's a lot of upside to this.

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Sanchit Gaurav

one year ago

Customer complaints are a blessing in disguise. With the right approach, you will be able to use them to your advantage and take your business to a new level.

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Name Generatorss

one year ago

I also believe that straight up apologizing and following-up is the absolute best tactic. We have noticed that in many cases even one round of complaint-based improvements can generate a couple of sales that wouldn't occur otherwise, and it's usually the complaining client returning and bringing a friend. I've no idea why that works (my position is not related to customer management directly), but it seems that such a customers thinks he/she is now being treated preferentially, like "they paid attention to what I said, it must means they pay special attention to what I say". And, of course, they are happy about that.