How to deal with customer complaints

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How to deal with customer complaints

Emotion influences our purchase decision six times more than rationale, which makes it very important to keep your existing customers happy.

The average cost of gaining a new customer is five times as much than retaining a current onei. Because emotion influences our purchase decision six times more than rationalei, it is very important to keep your existing customers happy, and solving problems quickly is a big part of this.

If you don't get the complaints management right, you may lose the troubled customer forever. However, if you do, a complainer can become an advocate for your business.

Here are seven tips on how to handle customer complaints:

Consumer opinions posted online can have a large impact on potential customers' decision-making process, so try to avoid bad comments.
  1. 1. Listen closely to what your customer has to say: Make sure you fully understand your customer's problem. Ask further questions if you need to.
  2. 2. Stay calm and friendly: Don't get frustrated with your customer and don't take accusations personally. Be aware that the complainer is usually not attacking you, but is upset about a situation.
  3. 3. Quickly find a solution: If you can't solve your customer's problem on the spot, get back to them quickly.
  4. 4. Keep track of complaints: If one complaint comes up repeatedly this should be a red flag for you to take action. Solve and prevent the same mistakes from happening again in order to achieve continuous improvement.
  5. 5. Offer incentives: If you feel they are justified, offering incentives such as a discount, a free meal or a gift voucher to the complainer can be an effective way to defuse the situation.
  6. 6. Inform about changes and improvements: Once you have implemented changes based on repeated customer complaints, let them know about it. It shows them you are taking their complaint seriously and may even help you bring back lost customers.
  7. 7. Train staff members who deal with customers: Your staff members represent your business and have to know how to deal with customer complaints. Explain to them how they are supposed to react to complaints, which kind of complaints require the manager to get involved, and other relevant matters.

Avoid bad publicity

A personal recommendation can be valuable to your business, but a bad review can be damaging - especially since searching for online reviews has become an important step in many people's decision-making process over the past years. As stated in Nielsen's "Global Trust in Advertising and Brand Messages" (2012) report, consumer opinions posted online were rated as trustworthy by 70% of survey respondents across 56 countriesii. And one form of marketing trusted even more than online reviews are personal recommendations (92%). These results demonstrate how powerful Web sites can be when they allow reviews and ratings. Just one bad online review can scare off potential customers, so make sure to handle complaints with care and solve issues right away.

Knowing how to deal with customer complaints can help you reduce the risk of losing existing customers. Offering cover options that are suited for your industry, occupation and budget, Small Business Insurance from Allianz can help you protect your business further. Get a Small Business Insurance quote online today~.

~We do not provide advice on this insurance based on any consideration of your objectives, financial situation or needs. Policy terms, conditions, limits and exclusions apply. Before making a decision please consider our product disclosure statement. View PDS update (privacy notice).

i Australian Customer Service Awards, Tips to delivering customer service excellence,

ii Nielsen 2012, Global Trust in Advertising and Brand Messages,, p.3