Listening to and Learning from your Customers
The deck is stacked against businesses trying to satisfy their customers. Customers expect satisfactory service. As a result anything that looks like unsatisfactory service stands out. Because it stands out, it is more likely to be remembered and weighed more heavily compared to everything that went right. Ten transactions can go right, but that one mistake is what grabs consumer attention. This reality demands that we focus on how to handle unhappy customers and pay attention to we can learn from customers who are dissatisfied.
Most customers don’t complain
The simplest and most effective way to increase bottom-line figures is to increase customer retention rates. And one of the strongest opportunities to reinforce brand values and create customer loyalty is during service recovery situations.
Fixing customer complaints is a powerful approach to reinforcing and differentiating a brand. Service recovery deals with the handling of customer dissatisfaction, requests for refunds, and complaints about any customer problems. Creating a well-designed service recovery strategy can help focus the organization on its customer base.
Unfortunately, most customers simply do not speak up when they are dissatisfied or face difficulties. That is, most of them do not say anything to an organization in a way that the organization can use or respond to that information in any meaningful way.
At the same time, it is the direct human-to-human interaction that impacts most customers’ perceptions of an organization. And it is when a customer has a problem that they are most likely to have this direct human contact.
The bottom line is that most people don’t say anything when they are dissatisfied.
- 26 out of 27 customers who experience poor service from an organization do not complain to someone who can do anything about the complaint
- 23% of those who don’t complain will have a serious complaint, and they still don’t say anything!
- They feel that complaining will only be a source of annoyance and a waste of time
Source: TARP (Technical Assistance Research Programs)
Customer expectations are higher and they will switch when these expectations aren’t met.
- 86% of consumers expect better service than they did five years ago
- 82% said they would switch supplier if not satisfied
- 97% of multiple switchers cite poor customer service as a key motivator in switching
- 35% said a simple apology would have prevented them moving to the competition customers who switch tend to be those who are the most profitable to do business with
Source: Ventura Marketing
Customer-centric business strategy
A customer-centric strategy should ultimately deliver the highest level of customer value, which in turn will help create genuinely loyal customers. In turn, a customer-centric approach should help create competitive differentiation and long-term growth for an organization.
Customer centricity requires a close collaboration with customers, listening to them and responding to them. One of the best ways to create a customer centric attitude within an organization is to have everyone be more sensitive to customer feedback.
Service Recovery Mapping
When your service recovery process is carefully mapped, your organization:
- will possess more realistic and usable customer feedback metrics
- can align its business structure so it is more customer centric
- will appropriately empower customer-facing staff to respond and recover for customers so customers are more likely to remain loyal when things go wrong
- will work with customers as partners by integrating their feedback into your business processes
- What do we want to accomplish with our service recovery approach?
- What is our mind set about complaints?
- What is our complaints policy?
- How should we handle Internet feedback?
- What experiences do we want our customers to have?
- How should we collect customer feedback?
- How should we align our CRM system to incorporate feedback?
Designing your organization-wide approach to service recovery requires answering specific questions that will no doubt influence your entire organization in areas that extend outside the boundaries of service recovery. By paying attention to that critical point in the customer service process when things go wrong, you will no doubt start focusing more completely on your customers. In this regard your business will automatically become more customer centric.
Designing a complete approach to service recovery will also enable you to listen more completely to your customers who will tell you about flaws in your business that you otherwise may never know about. Ultimately a well-designed service recovery process will enable you to retain more of your customers, thereby protecting the investment in time and resources you made to get those customers in the first place.
- What are our goals and how will we know we are getting close to them?
- What do we currently do well?
- What does our staff think and feel about complaints?
- How robust are our metrics about product or service failures?
- How do we compare to our competitors?
- How widely is our data shared and used internally?
In order to effectively determine how well your service recovery process is working, you must have robust measurements in place. Many organizations collect a variety of measurements that are summarized in reports, passed on to the CEO or Board of Directors, and then never looked at again. Robust metrics must include information that is usable by everyone inside the organization.
When you first begin it is important to establish baselines. In this way, all employees can monitor the success their contribution is having on critical numbers. For this reason, it’s a good idea to involve staff in determining the metrics they can best use and against which they want to be measured themselves. If you have designed your process well, your metrics shouldn’t change every time some small change is introduced.
- Does our staff reward system encourage effective complaint handling?
- Are our return policies, refunds, and guarantees in alignment with our feedback philosophy?
- Do our internal policies, procedures, and systems align with our feedback philosophy?
- Do our written responses to complaints reflect our service recovery approach?
Many organizations want to recover better for customers when they face problems or disappointments. Unfortunately, many think that having staff who are more courteous and speedy when responding to customer complaints will solve the problem. Customer-facing staff work in an organizational culture that affects their mood and their ability to actually serve their customers.
Critical questions dealing with return policies, refunds, and guarantees must be in alignment with how far an organization wants to go with its customers when they face problems or disappointments. It’s easy to say that you will stand behind your customers, but when they stand in front of you with a complaint, the customer may rapidly discover there are enormous restrictions on this stated position.
4. Respond & Recover
- Do our staff respond to complaining customers as if they have been given a gift?
- How empowered is our staff to respond to complaints?
- Can we help our customers to be “better customers?”
- Does everyone use complaints as an opportunity to strengthen relationships with our customers?
It is at the critical point of complaint handling that both customers and customer-facing staff learn how serious an organization is about retaining them as customers. Organization that tightly script their staff in what they should say and how they should behave towards complaining customers have a long way to go in understanding the complexity of complaint handling.
For all these reasons, it is important that all staff, but particularly customer-facing staff, are educated in the psychology of complaint handling. They need to be empowered to take fair and reasonable positions on behalf of their customers. And they need to be supported in such a way that they are willing to take responsibility for caring for customers when they face problems, are disappointed, or don’t get what they want.
- How do we apply what we learn from our customers to help improve our quality?
- What is our process to enable staff to learn from each other?
- What is our system for sharing feedback across
- How do we insure that feedback is on everyone's
- Communication agenda? How can we talk about our service recovery approach in our marketing?
Once you have made a decision to listen more closely to your customers, you still have to determine how to integrate this information into the inner workings of your organization. Many organizations gather data and specific pieces of information and knowledge that is never shared beyond a small team or department. On other occasions it never moves past the customer-facing staff who heard the initial complaint.
Part of integrating customer feedback into your organization requires a system for sharing knowledge across the entire company. If this last step is not carefully tended, it is possible that no real change will take place. Yet the opportunity for improved quality, more realistic marketing, and cross-departmental integration is real when the voice of the customer is brought inside the organization and given a platform so everyone can hear it.
"Marketing … is the whole business seen from the point of view of it’s final result, that is, from the customer's point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise." – Peter Drucker, People and Performance.