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The real cost of complaints for your business

Dissatisfied red circle

How many complaints does your business get every week or month? Hopefully it’s not very many but even a small number of dissatisfied customers can cause a lot of damage, especially to businesses that rely on word of mouth referrals or who don’t have hundreds of customers buying from them every day.

While complaints are hopefully not commonplace for your business (if they are an everyday occurrence you might want to look at what you’re doing wrong!), it could still be worth putting a formal complaints handling process in place.

Having a formal process for handling complaints, and communicating this process to your customers can have a positive impact on your business, even if you don’t receive very many complaints. This is in part because seeing that you take complaints seriously enough to implement a formal process can help build trust between you and your customers.

Are complaints costing your business?

The idea that every unhappy customer tells 10 people, while every happy customer only tells one has been around for a long time. This means that for a small business, even a low percentage of unhappy customers could do a disproportionately high amount of damage to your reputation.

If they are left unresolved, complaints can end up costing your business more than you realise. If you want to preserve your reputation and build loyalty among your customers or clients, it’s essential that you take complaints against your business seriously.

By showing your clients or customers that you take their feedback seriously and you are committed to meeting their needs you can help build trust, loyalty and reduce the amount of negative feedback that you receive. In many cases, a dissatisfied customer can be turned into a raving fan by an effective complaints handling system.

How can you create a complaints handling system?

Dispute resolution can take place on many different platforms and customers can complain about your service or products on social media, your blog, review sites or to you directly via phone or email. This is why it’s important to monitor mentions of your business online so you can take action quickly if someone expresses dissatisfaction on a public forum.

Discovering that a customer has posted something negative about your business in a public space can seem devastating but as long as you respond promptly and are seen to resolve the issue, it can actually work in your favour. Trust and transparency are essential qualities for any business to demonstrate, and showing that you are prepared to step up and resolve customer issues can help your customers feel more confident purchasing from you.

Regularly seeking feedback and responding to any client issues is essential if you want your reputation to be a positive one overall, without negative feedback affecting your business. The cost of ignoring complaints could be higher than you realise.

About the author:

Jo Macdermott is the Chief Marketing Consultant at Next Marketing in Melbourne. She has 15 years of marketing experience, is a Certified Practising Marketer and is a sought after marketing media commentator. Jo specialises in working with small and medium businesses. Follow her on Twitter here