Turning customer complaints into opportunities

The recent holiday shopping season was a time of hustle, bustle and, for some, a lot of stress. Correspondingly, many business owners experienced not only the happy ring of a busy cash register, but also the occasional unhappy sting of a customer's complaint.

But the fact is, complaints can happen any time of year as customers' busy schedules and short tempers collide, leading to criticism about some aspect of your goods or services. Fortunately, you can choose to see a complaint as an important customer leverage point, and work to turn a negative into a positive. What you do about a complaint will determine whether the customer leaves your business in a bad mood, never to return, or whether you can satisfy them to the point that they become a repeat client. From a strategic standpoint, complaints are actually opportunities waiting to be capitalized on.

Taking a strategic view

It is paramount that you not act on your knee-jerk, emotional reactions to a complaint, because the situation could escalate in the wrong direction. On the contrary, the ideal way to solve complaints is to take the time to discover the root cause of the customer's dissatisfaction, and then deal with the situation in a practical manner. It is much better to proactively address the complaint, so that the customer feels heard and the problem is quickly rectified.

For example: if the customer complains that they waited a long time and no one helped them, you could try giving the client more individualized and personalized attention. Or, perhaps you could evaluate every point in the client's buying cycle to determine where you or your staff may, in fact, have dropped the ball. You need to show the customer that you care about them, and that you will take the experience as a lesson that you will apply to your business. Customers appreciate it when their concerns are validated, and not ignored or brushed off.

Ultimately, however, your goal should be to go beyond implementing a one time "fix", and work to systematize solutions so that similar complaints won't happen again -- either with that customer, or with any other customers. If you don't strategically identify a system to address complaints, you will never know if you just fixed something this once, or if you solved it for good.

Systematizing the solution

One important step you can take is to identify the complaints and the various solutions and put them down in writing. Then, you should take into account any necessary resources required to implement this new system, such as new technology, new staff accountabilities, or additional training that could serve the business for both the short and the long term.

Once those issues have been clarified, you can roll the system out to the users. This does not mean simply leaving a copy with a "please read" post-it note on their desk. Rather, it might be a good idea for you and your employees to actively role-play complaint scenarios, so that they can see how similar complaints can be better handled in the future. You may also want to engage your employees through question-and-answer periods and discussion sessions to ensure that they have no hesitations about the new system, and that any uncertainties are resolved.

After the system has been developed and rolled out to employees, then what? Should you assume that you will no longer receive any customer complaints? Not necessarily. You must continue to keep an eye out for any weaknesses in the system, quickly identify any new complaints, and then fold the solutions to those new complaints into the system. It will be a perpetual cycle of innovating, quantifying, orchestrating, and constantly improving.

Opportunities in disguise

Remember, you should actually appreciate hearing complaints because they give you a clear reference point of where you can do better. You will never reach your objectives if you react to complaints negatively, sweep them under the rug, or do not take them seriously.

Complaints are really just opportunities in disguise that can enable you to optimize and improve the inner workings of the business. And, if you can start to see a customer complaint as a leverage point to turn a negative into a positive, you can take advantage of the opportunity to take your business to the next level.

As someone once said 'if you dared to dream the dream, if you dared to write down on paper what you would really really really like to do - what would it be ?' And then do it. Why do some people continue to do their jobs until they are 90 ? Because it is not work for them it is because they love it. You must find that thing, and then read/learn/get the experance necessary.

Patrick, you first must know what nurtures you in life, because without that it doesn't matter much what you do. Yes, if you make this change you may feel better, at least for some time, but eventually you will still feel like something is missing. That something is your Primary Aim. If you are not doing E-Myth Mastery, you could enroll in Embark for the Leadership program becaue the Primary Aim is a part of that, and to elicit your Primary Aim I would reccomend you purchase a coaching meeting block to have some guidance. You can also review The E-Myth Revisited chapter 12, pages 136 - 148. You might also consider reading/revieiwng Michael Gerber's book "E-Myth Mastery" chapter nine starting on page 44 entitled "The Purpose of Purpose". So, once you have clarity about your primary aim, your other questions will be much easier to answer.

What do you think?

Adena,

I would love to talk to you about your experiences with the E-Myth Model being applied to your business. My email is jaime.morales@yahoo.com I posted the initial question. I have some interesting ideas that I have come up with and would like to share them with some one in the business. Thanks.

Yes, I have successfully applied the E-Myth Model to our portfolio management business. Like you, I run a business within a business. One of the most interesting aspects of doing so comes in the interaction with the firm that considers you an employee. If your firm offers you the freedom to run your business according to your vision, you can create the experiences you want. The results are phenomenal.

Adena

I recently opened a hair salon and while I am maintaining, when a customer is dissatisfied I go out of my way to repair and re-do any thing that is unsatisfactory, and hope that they will return. My question is in giving away my service and usually product am I setting myself up for future complaints in order to receive free service etc.? In the end can this wind up costing me more than I will gain by going the extra mile?

Arit,

Thanks for posting this, your honesty in very much appreciated. This sounds like a very serious matter that requires your immediate attention. I would suggest taking this on in two ways.

1) Quickly write down the money flow steps in each of your services, including the source document used to record the transaction. Assign one employee to use the cash register during a shift, and have a trusted manger or yourself match the source doc with the money at the end of each shift. Document this process and set up an "all employee" meeting.

2) At the meeting alert your employees that you have noticed frequent discrepancies in the money collection process and unveil the new system. Without any blame alert your employees of a no-tolerance, "1-Strike and Your Out" theft policy. Review the system with them and provide documentation, ask for any questions, and let everyone know that the system is effective immediately.

Theft is a common problem, especially in small business that deal primarily with cash. But most employees value their job and will quickly change their ways when they know the boss is closing in.

If anyone gets caught stealing you will need to fire them on the spot, no questions asked.

Let me know if you have any questions and please share some details about the system you create with the rest of us.

Thanks Hasan for your quick response. Here are the steps I've decided to take.

1. A lawyer friend yesterday showed me a GUARANTOR'S FORM she drafted for a client and I intend to use same. Among other things, this is what is written:

If the aforesaid employee/holder fails to execute his/her contract/obligations, steals from the company or from any of its clients, the employee/holder hereby affirms to pay back to the company the sum equal to the stolen property.

Failing to do (b) above, I the GUARANTOR will be responsible for payment of the sum lost.

THE GUARANTOR should not be discharged or released from this Guarantee by any arrangement made between the Company and the employee with or without the knowledge or assent of the Guarantor.

The form is signed by the employee, Guarantor, a witness, and the Guarantor's passport sized photograph is attached.

2. Following your advice, I've generated source documents for recording the print jobs done as well as the scanning jobs and have insisted all scanning done and sent to client mail boxes MUST BE SENT using the company email address. This way I'll be able to check the SENT mail folder for mail sent each day against the amount recorded as sales from scanning. I already have source documents for ticket sales but I intend to check rigorously any ticket generation other than the ones I generate.

3. I've already fired a member of staff others have pointed out is the main person who generates extra tickets. I could only do this after I'd threatened yesterday to fire everyone of them without their salaries if they don't own up.

With steps I've taken and others I intend to take as ideas crop up, I believe my business is on its way to making profits this year especially as I implement what I'm learning from the course.

Thanks once again.

Arit

It is also immportant to consider each customer as a walking advertisement for or against your business. Generally, people want to be treated in a prompt, courteous and considerate manner. If you truly want to grow your business into a World Class Operation; you must respond to complaints on the spot, first listening to and understanding the root cause of the complaint. Repeat the complaint back to the customer as you understand it and get their acknowledgement, then offer a solution. If the solution is not satisfactory, ask the customer how they might resolve the compaint. Offer a short term fix with the promise that a permanent fix will be implemented should further study of the problem be required. Be sure to follow up with that customer for satisfaction of the system corrections to resolve the complaint, and monitor the system corrections to ensure new habits have been implemented for the long term improvement.

Remember, people are people and sometimes have problems that are not associated with YOUR business, but take out their frustrations at your business. If you find this is the case, a sense of personal attention to the individual, patience and understanding will go a long way to improving this type of customer complaint, following the active listening portion of your investigation.

I agree, complaints are opportunities to become World Class ! Take them seriously.

It is exciting to see that not only is E-Myth revisited on the New York Time's Bestseller list, but also used by professors at many business colleges. Here is a college course syllabus that was just forwarded to me by a friend. Here is what was said as required reading for this class about Business:

One of the best entrepreneurial books available, The E-Myth Revisited is applicable to all aspects of life & business, church, and family. Students are required to read the entire book as part of the class, and write a 3-4 page paper relating the book to their own experiences. It is recommended that you read the book during the first two weeks of class in order to get the most from the lectures and begin preparing for your assigned paper.

Keep in mind that "bad news" (customer complaints) is "good news" (opportunities for improving the business. At Stwe Leonard's, each customer is invited to write a comment before they leaving the store. Each morning, the previous day's comments are written up and distributed to store managers through out the store. Good news is always nice; but bad news is really appreciated because some customer has taken the time and effort to communicate what they are really looking for.
rwburian@optonline.net

Paul: I had no idea that E-Bay alone is responsible for that many internet sales. Your story is great, and as a small religious bookstore, I can identify with "dead" inventory. Anyone have any suggestions for me? The problem is everybody sells religious books. You can purchase them in many brick and mortar stores, and there are plenty of places to do so on the internet also. I to have my bookstore in a small place, so I can identify with that part of the story. Currently, I have books listed on "half.com" a sister site of e-bay. I have sold a few things, but nothing lately. Tell me what do you do when your customers come in and say "I went to e-bay first." or "I went to Amazon and they didn't have it." Any suggestion would be helpful. Thanks.

Start listing your books on Amazon. Probably the "Used/Discounted" books area. It's the area I look into first for the sole fact it undercuts everything.

i have a medium size retail buisness in australia have started selling on e bay 3 m0nths ago in australia and already turning over $1500 to $2000 per week and are wondering how to handle the sales as they are growing every week faster than we expected in many ways its exacly the same experiance as you have desccribed except we have not started selling our excess on e bay yet we have started with popular items we are making good profits on ,but i cant wait to read part 2 of the article to see what i should be doing next

regards

mike

Good perspective for B2C businesses. I have a client who is wrestling with the dilemma of how to treat customers who are no longer paying as agreed. The President keeps overriding the accounting department and extends credit. The inconsistency is driving the staff nuts.

I run a small law firm. Three attorneys and four support staff. I have been through the Mastery program and would be happy to talk to you about my positive experience.

Mark Underwood

923 Third Avenue

Huntington, WV 25701

304 522 0508

www.underwoodlawoffices.com

Though I am not a law firm or in the legal industry I began the mastery course 4 months ago and was in the same position you are in now, wanting to speak to someone in my industry to see how it affected their business and whether or not it would affect mine.

Now that I am into the program I have realized that it doesn't matter what business you are in the principals of business ownership are the same and the same mastery program has the same impact on my business as it will on yours.

I hope this helps, if you have anymore questions, feel free to email me at kevinpatrick@bellsouth.net.

I'm so glad I saw this question. My answer will probably seem very fragmented. I would like to spend some time and really write about this but I know you're probably not interested in a book about this, so I'll try my best to make some sense. I hope this can help a little. I've worked as a sales rep in the I.T. industry for years before starting my own business; if I've found one common thread in pay packages it is this: The way that a reimbursement package is put together will completely drive the direction of sales. I know this sounds like an obvious observation but I can't tell you how many times I've seen reps, including myself, sell in completely a different direction than management wanted us to do because of the way our pay was structured. I've seen this with small companies that have less than 50 employees and with "enterprise" sized businesses as well. In fact I've seen this negatively impact the 8th largest company in the U.S. Whether or not you hire a consulting firm for help with this or if this is something that you tackle completely on your own, here's what I would suggest. Before you start looking at $ signs ask yourself these questions. 1. Is your business plan and goals solidly identified? Is your purpose set? I think this is so important because everything we do should be in line with that purpose for our business, correct? However sometimes during negotiation with employees we forget what the purpose is and maybe allow things to happen that will come back to bite us later. 2. What products/services have to move and at what volume for you to hit your goal? 3. What is your gross profit margin for each product/service that you will deliver? Gross profit being, sales price minus your cost per sale. (cost per sale will be what you are willing to pay for the gross volume generated by the rep.) Answering #2 and #3 will give you an accurate idea what products/services are the most important ones to sell to hit your goals. Please remember to keep this in mind when you set your commision structure for your sales reps. I guarantee they will always sell where the money is, always! Also, if you know what your margins are for each product/service you will have a much better idea how much you're willing to pay in commision in order to hit your goals. Of course it's not uncommon to have a different % for commisions set for each item. 4. What processes do you have in place for the complete sales cycle? The sales cycle being (with e-myths help) Lead Generation, Lead Conversion, and Client Fullfillment. As a sales rep this was probably the one of the most important questions I always would ask before working for a company. Lead Generation: Do I as a sales rep have to generate my own leads? Am I allowed to generate my own? Sometimes reps get sick of working the same old stale, cold leads the company tries to provide them.(these are your hunters, your cold callers) Other times more often then not you'll find your sales force being (gatherers) they will do anything they can to avoid a cold call. Lastly on this, If I do generate my own lead and sell it, is my commision structure higher for this sale? Lead Conversion: How much paperwork do I have to do to get this done? Will it be invoiced correctly, so I don't waste too much time on follow up later? Logistical paperwork, closing the sale on paper, will kill a sales reps productivity. It takes them away from the client and potential new clients. Client Fulfillment: Do you have processes in place that will make the close easy to pass off to client fulfillment? Can I pass it off to client fulfillment and know that it's handled correctly, so I don't lose a commision on it later because the ball was dropped? I can't tell you how many companies completely ignore the sales process and it would revolutionize their people and profit. 5. Talk to your top reps: I would put together some ideas and share them with your best employees privately. They will tell you what's what if they have trust in you. They can give you some insight on things that you won't ever expect that are very valuable to your business. One last thing, You should know exactly what you can afford to pay your employees given the profit that they impact on your company. If you don't know you can't set a fare wage either way, for you or the employee. Don't be cheap. I find it so ironic that some organizations want employees to be loyal, go to bat for them, work their rearends off, but they don't want to pay for them. Be fair, go the extra mile with the opportunity for your employees to truly provide a nice living for themselves. If you do this they'll be more focused, happier, represent your org. in a much more professional image etc, and through all of that you will only win more. I hope this helps. Leo

Thankyou so much for your input. I really appreciate it. My business is going to be a hair salon so I will implement your suggestions as much as poss. I remember being an apprentice and winning "most sold hair products" every week. This meant an extra £10 in my pocket a week and as I was only making £35 it was alot! Good incentive.
Thanks again, from London, England. Merry Christmas!
Charlotte

Hello Charlotte -- that's a great question. I would say, yes, there is a system, but perhaps you haven't developed it yet! The reason I put it that way is that the system needs to serve YOUR business and YOUR objectives. It's likely that another system someone else is using won't do that nearly as well as a system you develop yourself. You could begin by thinking about some important questions, like: what do I want to encourage my staff to do? What do I want to discourage them from doing? What are all the ways I can encourage and/or discourage those results, and where does the compensation package fall in that list? How could I quantify the contributions my employees are making? And then of course -- what can I afford? What would I like my employees to be able to earn? How much of that is salary, and how much is commission or bonus? How much of that is performance based, and how much of it is standard pay?
It might seem overwhelming to come up with your own system, but often that's just because you don't yet know the answers. The first step to getting good answers is deciding on the right questions. Good luck!

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