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Turning customer complaints into sales

MGCC001 AUG2016 Forum of PrivateBusiness

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The 7 golden rules for turning customer complaints into sales Did you know that each unhappy customer will tell at least three current or potential customers about his/her experiences? On top of that, dissatisfied customers are now using the internet to vent their frustration, so any complaint could be seen by hundreds – or even thousands – of potential clients. Blogs, forums, Twitter and dedicated customer complaints websites are just some of the ways that consumers can have an impact on a company’s reputation and cause serious, sometimes permanent, damage.

7 out of 10 customers who switch to acompetitor do so because of poor service.

Whether your company is small or large, deals with hundreds of customers every day or just a few key clients, the way you handle dissatisfied customers can affect the success of your business. At a time when consumers are being careful about where and when they spend their money, taking a closer look at how you deal with complaints could Complaining Brits significantly boost your bottom line.

are on the increase; 75% of UK consumers now complain when encountering a problem with goods or services.

At this point, you may be thinking that you’ve never had a complaint, so why do you need to read this guide? Just because you’ve never received a complaint doesn’t mean you don’t have unhappy customers. The majority of people don’t bother to complain; they simply take their business elsewhere.

Through this guide, we’ll help you to change the way you look at complaints and identify huge untapped opportunities. Did you know there is information available at your fingertips right now which could increase your company’s turnover? Many business owners don’t associate customer complaints with potential business opportunities, but the way you deal with unhappy clients can hold the key to boosting your firm’s sales. If you’re thinking of ways to reach out to more and new customers, this guide is also for you. It may sound strange, but complaints are often a good place to start when thinking about developing your business or branching out into new areas. If a customer has something to whinge about, they may also have a valuable suggestion about how things can be improved.

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Around 90% of unhappy customers will not buy again from a company that disappointed them

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1. Look at complaints as opportunities Customer complaints are never easy to deal with. When you’ve put your heart and soul into establishing and running your business, it’s easy to take negative feedback personally. Many of us regard negative comments as criticism of our efforts; however, if you can get over this and start looking at complaints differently, you’ll be halfway towards turning them into sales. To look at complaints more objectively, try to think about it from the customer’s point of view. The client only sees things from the outside and isn’t aware of your internal procedures or what goes on behind the scenes. If you can start to change your attitude towards complaints, your business will benefit in many ways. You’ll start to:

Uncover issues you didnt know existed

Resolve problems which could be frustrating other customers

Convince customers not to go elsewhere

Gain an insight into which other products/services your customers want

Turn unhappy customers into happy ones who are prepared to recommend you to others.

2. Make it easy for customers to complain There are three main reasons why customers don’t register complaints; they think it’s not worth their time, they don’t know who to complain to, or they don’t think complaining will help. Making it easy for customers to complain will enable you to gather the valuable information you need to start turning complaints into sales. To minimise customers’ frustration, you need to make the following information clear on your website, or at other key contact points:

How customers can get in touch with you

Where and how they can make a complaint

Who is responsible for dealing with complaints

Create a customer complaints policy to ensure any complaints you receive are dealt with efficiently. It’s important to think about the different types of complaints; they can come in a variety of forms, including letters, email, face to face and phone calls and social media.

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When drawing up a customer complaints policy, you should consider including:

The definition of complaint

What the process is for making a complaint

How the complaint will be recorded and tracked

How the complaint will be dealt with and resolved

Time scales for responding to and resolving complaints

Any additional points from this guide which may be useful.

Make sure all your staff understand the complaints policy so that they can deal with customers and/or direct them to the relevant person. A customer having a whinge on the phone may be seen by one employee as a complaint, while another might just see it as part of their day-to-day job to pacify the client and decide not to report it. If you’re introducing a new complaints policy, it’s worth getting all staff together to make sure everyone understands how, where, when and why to report complaints. Don’t frustrate, confuse or annoy customers by making them chase different people in different departments; this will only make it harder for you to glean the information you need to satisfactorily resolve the complaint. Finally, make sure you provide the customer with your full name and contact details, so that s/he can chase up a response to the complaint, if necessary.

3. Ask the right questions Before you can start to turn customers’ complaints into sales, you need to understand what’s contributing to their dissatisfaction. It might sound obvious, but businesses often trip themselves up by not asking enough – or the right – questions to get to the core of the problem. Let the customer give you all the information you need to understand the issue. This can have the added benefit of giving the customer time to calm down. A customer may have initially contacted you about a faulty product, but when he called he couldn’t get through to the right person. When he finally got through to someone he was twice as frustrated as when he first dialled your number. It’s important to ask open-ended questions and be prepared to listen. Sometimes, you may have to delve deep to identify the key issue and may even find other problems along the way that you need to resolve.. The most important question to ask after you’ve listened to the customer’s complaint is ‘how can I fix the problem?’ This simple question will go a long way towards helping you to resolve the issue. Firstly, the customer will realise that you’re serious about the complaint, which can help to calm down an irate client. Secondly, it could save you from having to think of a solution to the problem yourself. Finally, it will often transpire that what the customer would like you to do is actually quite simple and easily achievable. Often, customers will feel much better after having ‘unburdened’ themselves and you may not even need to take any further action.

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4. Apologise A sincere apology can immediately calm down an angry customer. Many businesses resist apologising because they don’t want to admit to making a mistake. The problem with this is that the customer already thinks you’ve made a mistake, so refusing to apologise just causes more aggravation. To calm your customer: •

Don’t be shy with apologies.

Apologise even if you’re not the person who made the mistake. From the customer’s point of view, you‘re representing the organisation; they won’t care whether or not it was you who made the mistake – you’re the person they got through to.

Apologise even if the customer is wrong. You may be dealing with one of those people who enjoys complaining and you may decide their comments are unjustified, but saying ‘I’m sorry you feel this way’ will help to calm the situation.

Time your apology carefully. Make it more personal by listening first to what the customer has to say; if it’s the first thing you say, the customer will think you don’t care about the details.

5. Thank customers for complaining It’s a simple way of letting customers know that you appreciate their feedback. Let customers know you take complaints seriously by telling them how their feedback is going to contribute to your business and what next steps you’re going to take. Saying ‘thank you’ is a simple way of creating some goodwill and customers won’t expect it. If they feel their views and comments are appreciated, they may be more likely to offer some constructive criticism, which can lead to improvements in your systems.

6. Fix the problem After asking enough questions to identify the problem, you then need to fix it. The problem may be a quick fix, but it’s not always that simple. In that case, you have to reach a compromise that both parties are happy with. You may need to take account of the following: •

Terms and conditions of your product/services

Any promises you’ve made

The cost of solving the problem

Any potential knock-on effects of not resolving the problem

The fair solution to the problem

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Try not to jump straight into giving the customer a free gift. This is often used as an excuse not to take any further action and the customer will feel ‘fobbed off’. It’s important to offer a realistic time frame for resolving the issue. Explain why any delay is necessary and what steps you’re taking to resolve the problem.

7. Follow up and practise prevention Once you’ve resolved the complaint, call, email or write to the customer to close the complaint. This will help you to ensure the problem has been completely resolved to the customer’s satisfaction and will re-establish your company’s credibility. The information you gather from customer complaints can help you to improve processes within your business and prevent similar problems arising. Create a formal procedure for recording all complaints and make sure you record the following: •

Date of the complaint

Name of the customer

Nature of the complaint

Details of the complaint

Actions taken to resolve the complaint

Follow-up contact made with the customer.

The template at the back of this guide can be adapted for your business and used for recording the required customer complaint information. Make sure you review the complaints on a regular basis – at least monthly. This will enable you to spot any trends or bottlenecks within the business and monitor whether your complaints procedures are working

What next? We hope this guide has given you some ideas to help improve the way your business deals with customer complaints. Once these have been implemented, you’ll be well on your way to identifying problems and coming up with solutions for boosting your business’s sales. Here’s a handy checklist to make sure you’ve covered all of the main areas: •

Identify the various ways customers can complain

Draw up a customer complaints procedure

Ensure all staff are fully briefed on the procedure; understand why and when a complaint should be recorded and reported, and how to deal with the complaint

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Make contact information and complaints procedures accessible to customers, for example, on your website and/or at your premises

Fix problems as and when they occur, and practise prevention

Review complaints forms on a regular basis to identify bottlenecks and enable you to make changes to your business to improve your customer experience.

How the Forum of Private Business can help The Forum is a proactive, not-for-profit organisation, providing comprehensive support, protection and reassurance to small businesses. With a focus on delivering an exceptional service to our members, we add value through the provision of tailored solutions that promote business success, and through expert advice and guidance that give total peace of mind. We’ve developed a customer complaints template, available at the back of this guide, which can be adapted to the needs of your business. This will help you to ensure all complaints are recorded so that any issues can be monitored and resolved. Members of the Forum have access to a free helpline for assistance with all aspects of running a successful business. Our friendly team is available weekdays between 8am and 6pm Not a member yet? Call the Forum’s member helpline on 01565 626001 to find out how we could help you and your business or visit our website at www.fpb.org.

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Customer complaint form template Customer information Contact name:

Business name:

Contact email:

Contact number:

Address:

Product number: Product description:

Purchase order number: Invoice number:

Complaint information Complaint date:

Complaint taken by:

Complaint details:

Cause of the problem:

Corrective action taken:

Date complaint closed/letter sent to customer: What steps should be taken to avoid further problems?

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Peace of mind that your business is protected The Forum of Private Business specialises in providing affordable help and advice. Membership includes: • An unlimited helpline offering practical guidance on employment law, health and safety, marketing and business development • Protection for your business with our legal expense insurance, worth up to £50,000 per section of cover • Tailored advice and member services to save money, make money and help your business grow • Getting your views on pressing business issues heard by policy makers By leading you through new and ever evolving legislation we leave you free to concentrate on what you do best, running your business. With memberships starting from only £14.50 per month it’s the best decision you can make for your business today!

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Forum of Private Business - Mini Guide - Turning Customer complaints into sales  

The 7 golden rules for turning customer complaints into sales.

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