Be Grateful Your Customers Complain
Got complaining customers? Be grateful. Your customers are telling you what is wrong with your company so you can fix it and can become better, more competitive, and grow. The Japanese call complaints “golden nuggets” – the opportunity to learn and improve.
For any complaint it is important to close the loop; follow up and get back to the person who complained. If you do not get back to them you can bet your bottom dollar they will complain about you to your current customer and all your potential prospects. Failure to do so and you can say goodbye to any future revenue from them. Keep in mind it costs 5 to 10 times more to replace a customer than it takes to keep them.
How effectively you close the loop will determine how customers perceive you in the short- and long-term. Just fixing the problem and doing nothing to make sure it doesn’t happen again will satisfy the customer now. However if the same error occurs repeatedly they will lose confidence in your company and brand and look for alternatives, regardless of how helpful you are in resolving the issue.
The Four Loops to Close
The Temkin Group suggests there is not just one but four loops to be closed. They are:
- Immediate response – get back to the customer and tell them the problem has been fixed. Thank them for pointing it out and apologizing for inconveniences you may have caused
- Corrective action – fix the problem the customer complained about.
- Continuous improvement – do a root cause analysis to identify why the problem occurred in the first place and ensure it does not happen again.
- Strategic change – change the process or the layout or the staff so it is impossible for this type of problem to ever occur again.
An example to illustrate the above four loops:
A manufacturing company supplies products to shops in the retail industry who then sell them to the public. One of its call centre agents gets a call from one of its clients complaining about a delivery they received – they ordered 20 widgets but only received 15 – they are short 5 widgets.
The call centre agent looks at the scanned original order and the order on the system and picks up the error – the wrong number of widgets was captured by the department that processed the order. It was an error on the manufacturing company’s side. He creates a ticket number for reference purposes for the client and for the company.
Closing the loops:
Loop 1 Immediate Response. The agent explains the problem to the client and acknowledges the problem was on their side. Apologises for any inconvenience and promises to do an overnight delivery free of charge.
Loop 2 Corrective Action. The agent ensures the extra 5 widgets are priority mailed to the client so they can have them on their shop floor the next day.
Loop 3 Continuous Improvement. The agent flags the ticket as a problem. At the weekly problem troubleshooting meeting the problem resolution team analyses the problem and determines the issue was because of the poor handwriting and it was on a carbon copy so it was faint exacerbating the problem. A solution was found and implemented to ensure this type of error did not happen again. Training on the new process was scheduled.
Loop 4 Strategic Change. The ticket was categorised and at the next strategic session it was analysed along with all the other problems. As this is a common error it was determined to create an online ordering system making it easier to create orders and to eliminate keystroke errors on their side. This is a big and costly initiative but with the feedback logs they can justify the expense taking into consideration how it make their clients’ job easier and more enjoyable. The reduction in errors would reduce rework and the cost of fixing them. The process would reduce the cost to service the customer thus increasing their profit in the long term. It would also increase their competitiveness.
The cost justification and business case the company creates would not have been possible if they did not focus on closing the four loops.