7 Lessons to Learn from Unhappy Customers
For startups and small business owners, every customer matters. And although you may try to meet their needs, the occasional unhappy customer is inevitable. Instead of becoming defensive or burying your head in the sand, it’s important to see these complaints as an opportunity for your business to learn and grow.
On average, Americans tell 15 other people about their negative experiences with a company. To put this into perspective, if you receive 10 complaints, 150 other people are now more likely to not do business with you. But it’s also worth noting that when customers have complaints resolved within five minutes, they’re more likely to spend more on future purchases. So it’s relatively simple to turn these unhappy customers into profitable customers. It’s for this reason that you must plan for unhappy customers, decide ahead-of-time how you’re going to handle their complaints, and ensure you learn from their experiences to mitigate damage to your business in the future.
Here are seven lessons that unhappy customers can teach you if you allow them.
1. Gain a new perspective on what’s important to your customers
While you probably feel like you know them well, your customers will always be able to share more information with you to help you understand their needs in greater detail.
As customers share more information about their priorities, I recommend building customer profiles. Profiles can help you understand customer demographics, their priorities, behaviors, goals, pain points, and buying patterns. By adding to your customer profiles over time, you can build a clearer picture of what is most important to each type of customer you serve, in turn helping you understand how to address and manage their complaints. Hint: You should handle complaints from different types of customers in different ways, depending on their priorities. See below for an example.
This is a visualized customer profile for Millennials and Gen Zs. This is a very basic profile showing five of their priorities. To improve the detail of this profile, we can expand beyond just “Millennials” and talk more specifically about “Median income Millennials” and “High-income Millennials”. These two profiles may have different priorities, with median income millennials being more cost-conscious when buying, expecting a low price and basic quality. Whereas high-income millennials may prefer to spend more money to receive a better quality product.
If your business sells to both these groups, your conflict resolution process may differ when each of them raises a complaint. To a high-income millennial, offering a discount on their next purchase to soften the blow of a complaint and protect your brand may have the opposite effect as they associate low-price or discounted-price with poor quality. Instead, upgrading their purchase for a higher quality product or experience is more likely to resonate with their priorities. But to a more cost-conscious median-income millennial who associates low prices as one of their priorities, a discount or additional credit added via a loyalty program may be the perfect way to protect your brand and turn an unhappy customer into a profitable customer.
2. A test of your conflict resolution skills
Imagine this scenario: You’re a multi-billion dollar gambling company with hundreds of thousands of customers. An employee accidentally offers and processes larger odds for one customer that means he wins $90 instead of $10 on his most recent bet.
When the customer goes to claim his winnings, the employee realizes his mistake, refuses to pay the customer the full $90, and offers only $15 (the correct $10 winnings, plus a $5 credit). The customer refuses and demands the full $90; afterall, it wasn’t his mistake.
The company still only offers $15. And the next morning they wake up to see this in the nation’s newspapers:
This is how a company in the UK recently handled a complaint. This multi-billion dollar company argued with a customer over just £90.
This is how not to handle conflict and complaints. Not only did this man tell his 15 friends, but he also found a way to tell millions of people across the nation. While any detriment to the companies revenue is yet to be seen, there is definite brand damage happening here.
When you receive a complaint, be sure to use the opportunity to test your resolution skills by following these guidelines:
- Ensure front-line employees are empowered to make decisions without senior managerial approval.
- Ask the customer how they would like the complaint resolved. When customers tell you how they expect to have their complaint resolved, they’re usually realistic, although they usually expect you to refuse. If they tell you what to do and you can do it, you can resolve most complaints immediately. And as we found out above, customer complaints that are resolved within five minutes usually lead to more profitable customers.
- Be sympathetic – it’s important to visualize how you would feel if you were the customer to allow you to be sympathetic to their situation and create an emotional connection.
- Be personable – encourage your employees to think freely, rather than reading from a script, so they can amend their approach for each customer and their individual needs.
3. Evaluate if you’re truly delivering on your promises
The loyalty and trust customers place in you is fragile. As you deliver on your promises, this trust is built slowly, but one broken promise can eradicate this.
The promises you make to your customers will vary, including large corporate brand promises such as Coors Light’s “The world’s most refreshing beer”, to smaller individual promises from your employees, such as calling a customer at the time you agreed or delivering products on the correct day.
While large brand promises are important, it’s the smaller individual promises that have the potential to quickly eradicate trust. It’s therefore important you empower your employees to deliver on these promises every day.
Once you’ve mastered delivering on your promises, it’s time to start over-delivering on them. Over-delivering doesn’t have to be difficult. For example, when customers call most customer service teams, they normally expect to be placed in a queue and to wait on-hold until an employee is available. Simply having enough employees to ensure there are no wait times will exceed your customer’s expectations and therefore over-deliver.
Above, we see a screenshot of a message a loyal customer sent to her favorite bike shop, Wiggle. The company is renowned for sending a small amount of candy in every order they ship, but this customer didn’t receive hers. This message on Facebook confirms how important this aspect of over-delivering and exceeding expectations is to this customer (and others who commented).
Remember, delivering on promises and exceeding the expectations of your customers doesn’t need to be complicated or expensive, but when you’ve done it once, your customers expect it every time, so ensure your processes are sustainable long-term.
4. See your flaws.
Your business plan probably includes a goal to be the first business in your niche potential customers think of. You likely want to provide a better service than your competitors, provide higher quality products at a better price-point. But it’s hard to do all this without knowing how you perform compared to your competitors.
It’s highly likely your competitors perform better than you in specific areas. It’s also highly likely you perform better than them in other areas. Your goal, of course, is to find your flaws. These are the areas where you under-perform compared to your competitors.
You can do this by talking directly with customers who have decided to leave to move to a competitor. Ask them why they are leaving, and what their new supplier provides that you don’t.
This method works best for service-based businesses, where customers need to cancel a subscription or contractual service with you. It’s less effective where customers are free to come and go as they please when purchasing products. In this scenario, the customer is likely to stop purchasing from you, and unless you have excellent customer records, you’re unlikely to spot this pattern for every customer.
If you don’t offer subscription or contractual services, don’t be afraid to test your competitors’ services yourself by making test purchases. While this may seem unusual, it’s a common practice in most industries when companies are conducting competitor analysis.
5. Gain an understanding of what your silent customers are experiencing.
Just one in every 26 unhappy customers will ever complain to you. That’s worrying when we consider there are 25 other unhappy customers we don’t know about and can’t help. The value unhappy customers can provide is immense, so it’s important to take steps to entice the other 25 customers to discuss their problems with you.
How to receive more complaints
It seems counter-intuitive to entice more people to complain, but if these unhappy customers exist anyway, it’s far better to hear what they have to say than to never hear from them at all.
- Ask for feedback after every purchase. This may be in the form of a public review provided by an external service such as TrustPilot or Reevoo, or an auto-response follow-up email sent a few days after you have provided service to the customer.
- If their buying habits change, resulting in them purchasing from you less frequently, make contact to find out why. Maybe they were unhappy with the service received last time they ordered.
- When you ask your customers for feedback, ensure they feel comfortable providing you with constructive criticism. They must know you want them to share their honest opinions.
- When feedback is received and acted on positively, you should use this as a positive case-study on social media to show other customers how you appreciate their suggestions and take action. If customers know they will be listened to, they’re more likely to contact you.
6. Evaluate if enough information is given upfront to your customers to avoid the situation.
Customers complain for many different reasons; because your service wasn’t as good as they expected, the product they received wasn’t as described, information changes at the last-minute, or they made assumptions that turned out to be wrong because you didn’t provide enough information upfront.
Spend a day in a busy train station, and you’re likely to hear an announcement to the effect of “Train X will now depart from platform 2, not platform 4”, followed swiftly by a crowd of commuters running towards the new platform. These passengers then spend the next hour on the train complaining about the constant last minute changes, an out-of-date app on their phone that always tells them the wrong information, and a lack of awareness from customer service agents who only receive the information at the same time as the customer.
These types of complaints are all caused by a lack of information being delivered to customers (and employees), or last-minute changes to information. While avoiding this in the travel sector is notoriously difficult, it’s important to understand that these changes and lack of information can cause huge disruption and frustrate customers.
Realistically, the best solution here is to be prepared in advance to limit the number of changes, and to speak directly with customers to ensure they had all the information they required in to make an informed decision.
If your company website is a primary source of information for customers, I recommend using a service such as WhatUsersDo, where you can ask individuals to complete pre-planned scenarios on your website while they record their screen and vocalize their thoughts as they do so. This is a fantastic way to easily test if your website provides all the information a customer needs to help them complete their goal.
7. They’re more valuable than customers who leave without providing feedback.
Customers who are unhappy but never complain can be difficult to work with because we’re never able to find out how we can make them happy. And while you can encourage more customers to provide feedback using the methods I described above, you’re unlikely to be able to encourage everybody.
It’s therefore important you recognize the value of customers who provide feedback and where possible, treat them with the highest priority.
While happy customers are fantastic, they’re unlikely to provide feedback to help your business adapt, improve and grow. Unhappy customers who provide feedback, however, are your gold. These are the people who can show you how to develop and grow your business, to meet and exceed the requirements of your customers every day. So treat them with the utmost respect, provide excellent customer service by responding to their feedback quickly, be receptive to their ideas, and follow up with them to tell them the actions you took as a direct result of the feedback they sent you.
Complaints are inevitable
Every business, no matter how excellent your service, how unique your product, and how small or large you are will receive customer complaints at some point in its journey. Remember to plan for these complaints in advance so your team knows how to respond, remember the value these customers can provide, and treat them impeccably as a result. Then, most important of all, take action so they know you value their ideas.
By doing all these things, you can learn from your customers and build a successful business that continues to exceed your customer’s expectations.
Put the customer at the center of everything you do, providing love and loyalty at every stage of the customer journey.
The iLoyal CX program provides you with a clear visualization of your customer journey, customer-brand touch points, and physical and digital customer experience environments.