“…and 9 out of 10 customers will buy your product/service again”
What’s the background?
It’s a commonly-held industry belief that resolving a customer complaint quickly will help you to hang onto that customer, and dramatically increase the likelihood of them doing business with you in the future. But where does this come from?
Tracking the statistic back to its various sources is tricky. It appears Lee Resources, Inc were one of the original contributors to this quote.
They are referenced as having conducted research showing “70% of complaining customers will do business with you again if you resolve the complaint in their favor.”
In addition, a study from Populus Research and Kana Software follows up with the speed angle on this, suggesting that “complaint wait” may well be one of the hidden dangers that’s secretly eroding your business.
Their research focuses on the frustration customers feel when waiting to complain, and to have their complaint resolved.
Their statistics also show that more than 70% of US consumers have lodged a customer service complaint in the last 3 years, and the average time wasted on each complaint was one hour and four minutes. Getting the problem resolved took three attempts and 69% of the customers had to repeat their complaint multiple times.
So stats coming from a number of places show that slow complaints handling cause frustration and customer churn, especially if complaints are not found in the customers’ favour. Whereas fast complaint resolution can get customers back on board, even if they’ve had a bad experience.
What can you do?
1. Measure how long your customers have to wait for customer support
Don’t measure just your classic call and email wait times, but social media, switchboard – everywhere people come into contact with your company. If you don’t measure the total wait times you won’t know how well you’re doing.
2. Tell people how long to expect the wait to be
Some problems or complaints will take time to investigate. Customers do understand this. What frustrates them is being left in the dark when they are not sure whether their complaint is being resolved or ignored. If something is going to take 2 weeks to sort out, proactively tell your customer that. This will also reduce your inbound calls and emails, as the customer will understand you’re working on it, and leave you to it so long as you keep them regularly updated.
3. Keep a close eye on real complaint productivity
A major customer frustration is when the same complaint is bounced from person to person without being properly handled. Tickets can be closed, passed on, changed and reattributed, causing a lot of internal activity, but resulting in nothing being fixed for the customer. Look carefully at customer feedback and see if customers are really happy with the resolutions they are getting. Check to see if they are rebuying from you, are they being retained?
4. Consider how much the real cost of finding in a customer’s favor actually is
If customers are more likely to stay with you if you resolve the complaint to their satisfaction, their lifetime value comes into play in this calculation. You might have the one-off cost of a refund to bear, but if you keep a customer for another 20 years, it’s probably worth it (even if the customer isn’t actually right). There’s a balance to be struck, as with all things; commercial decisions have to be made. But taking into account customer history and likely value where the complaint isn’t clear cut does make sense.
It’s clear that your complaints department is the last chance saloon to fix a customer leaky bucket. You may have a busy complaints team but are they quickly and effectively communicating with customers at every level of the business, from social media through to your reception area to swiftly rectify issues? Are you looking at the customer’s total value and loyalty to you in your decision making? And finally, it’s worth checking with customers to ensure they are happy with your resolution, whilst being respectful of their time.
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