You Look Forward To Customer Complaints...Or Do You Go Out
Of Your Way To Avoid Them?"
If you are
like most Business owners, you will run a mile from any
customer who complains about anything that happens in your
Business. It's natural really, because most people hate
the thought that they may have upset another person or
that their service may not have been up to scratch.
We all like to
try to help our customers solve their problems with the
most effective and least expensive solution that we can
provide (or at least we should be trying to do this...).
If we get it wrong, then our customer has a right to
complain, and have her grievance heard, acted upon and remedied.
complaints are one of the most uncomfortable parts of
owning a Business, but they are a fact of life. The way
you deal with them will reflect massively on your bottom
Let's look at
a couple of examples...these stories are true, just the
people's names have been changed.
$2.00 video hire that cost a fortune
John lived in
a small town and was a frequent customer of the local
Video store, where just about every week he and his family
would spend around $20.00 on video rentals, snacks and
drinks. The staff at the video store weren't exactly what
you would call friendly, but they had no competition for
many miles, so John just bit his lip every time he went in
there to pick up his movies.
Then, one day
his wife came home with a book of discount coupons she had
purchased for $50.00 which included a voucher from the
video store of a Free weekly video rental each week for 8
eventually got around to remembering to take the voucher
to the store on a Sunday during the second week of the
promotion, and picked up a free video for his daughter
that usually cost $2.00 per week, along with two overnight
rentals and a bottle of drink and some chips that cost
$18.00 all up.
The next week,
he returned the weekly rental video on Saturday afternoon
at around 5 p.m. and took the next weeks free weekly
rental to the counter with two more overnight rentals.
The surly shop
assistant stared down her nose at him and snarled,
"You can't pick up your next Free weekly video until
tomorrow! The promotion runs from Sunday to Sunday. You'll
have to come back again."
that the round trip was 16 kilometres and the cost and
time spent driving back to the store wasn't worth the
trouble for a $2.00 movie. It was only a few hours early
and surely he could take the video home with him now.
assistant was adamant that he would have to come back, so
in frustration, he dumped the other two overnight videos,
chips and drink on the counter and stormed out without
Unlike 90% of
people who have a grievance with a Business, he wrote a
letter of complaint to the manager, outlining his concerns
and feelings about the attitude of the shop assistant he
A week later,
he received a reply from the store manager, and couldn't
believe his eyes.
The letter had
been written COMPLETELY IN CAPITALS, contained at least 10
spelling and grammatical errors, and basically told John he
was in the wrong because the shop assistant was following
store policy, they were allowed to be rude to customers
because where else was he going to go to hire videos, and
to stop complaining about a $2.00 video and wake up to
He called a
pay TV provider and had Satellite television installed two
days later at a cost of $60 per month, and has never to
this day gone into that video store.
On the few
occasions he has rented videos since then, he has driven
over 40 kilometres to nearby town to rent them!
Plus, he told
everyone he met about his treatment at the hands of the
video store owner and many other people shared their bad
experiences as well.
So lets do a
quick back of the envelope calculation of how much that
silly $2.00 video incident has cost the video store owner
since that fateful day.
$20 per week
for say 48 weeks a year adds up to $960 in lost sales in
the first year. John hasn't been back into the store for 7
years, so that's a total of $6720 in lost
turnover...from just one customer.
that shop assistant offends just two customers a week in
the same manner and they decide to either buy somewhere
else or do what John did and spend their money on pay TV
instead. That's 100 customers each year, costing $6720 each
in lost profits over the next 7 years.
$672,000 in lost turnover!
What if she
offended more than two customers per week! And that
assumes that it only happens for one year. Imagine the
compounding effect of this policy over many years.
money could have funded the purchase of 20 rental
properties over this period of time, or bought the store
owner a new Ferrari with cash to spare, or bought a new
home and helped him and his family enjoy a three week
vacation in the snow every year...
for every person who takes the time to complain, there are
9 others who just never return...and they usually tell
several other people about how badly they were treated as
simple act of short term thinking, multiplied over and
ever, has the potential to send this video store owner
into bankruptcy and devalue his Business massively for
anyone who decides to purchase it in the future.
And of course
that $672,000 doesn't take into account all of the
negative feedback that these 100 people spread around to
other people about the video store to people who then stop
going there themselves as well.
impact when everyone in this small town hears this
negative feedback from more and more people. The Business
this to Peta's experience - this is how to handle a
lived in a small coastal and bought her fresh bread at the
local Bakery down the street every couple of days. They
had excellent products, the shop was always busy and the
service was typically friendly and efficient.
But one day,
Peta had a very uncomfortable experience with one of the
shop assistants during a particularly busy period. She
felt hurt by the treatment she had received from this
young person, so she wrote a short letter of complaint to the manager,
and thought no more about it.
just wasn't going back!
later, the manager of the Bakery called her personally on
the telephone and asked her to tell him the full story of
what had happened that day.
what had happened as the manager listened intently. He
then thanked her for her complaint, and offered her $10.00
worth of free bread or pastries, as his way of apologising
and saying thankyou for her valuable feedback. He
sincerely appreciated her custom and hoped that this one
isolated incident wouldn't stop her from shopping in his
He then went
on to explain to Peta that many of his staff were employed
through a program that encouraged young people who had
been physically and mentally abused by people they trusted
to rebuild their shattered lives.
He and several
other local Business people had joined together to employ
these young people so that they could earn an income,
start to regain their self esteem and move on from their
Peta wept as
he told her that the girl who had been so rude to her that
day was the newest member of this program. She had been
physically abused by her step father since she was 6 years
old and she had only recently found the courage to speak
up about what had been happening to her for over 9 years.
He knew that
this didn't excuse her behaviour, and if this sort of
incident occurred just
once more, the girl would be out of the program. But he
asked Peta to try to forgive her and promised that he
would do his best to make sure that it didn't happen
Peta to come down to the Bakery and meet the girl, Anna,
who would gladly give her a sincere, personal apology.
imagine the thoughts going through Peta's mind at this
person who she felt had treated her with contempt wasn't
some nameless shop assistant having a bad day and intent
on ruining other people's as well, but a 15 year old child
who had experienced things in her short life that no
person should have to go through.
makes you think doesn't it?
Peta took up the store owner's offer and continued to shop
at the Bakery, and in fact bought even more of their
wonderful products each week. She became an evangelist for
that Bakery, telling everyone she knew about the great
work the owner was doing for the young people of his
So she helped
him build his Business into the most popular hot bread
shop in the area.
Can you see
how the difference in the attitudes of these two Business
owners, applied consistently over time, can mean massive
differences in the outcomes of these Business owner's
lives and the lives of others around them?
If the video
store owner had understood the 'Lifetime Value' of each
customer, he would have thanked John for his feedback and
given him vouchers for Free overnight videos and other
goodies to show his appreciation for letting him know that
there was a problem before it got out of hand.
Imagine if the
Bakery store owner had of wrote back to Peta and told her
she had no right to complain because he was doing a
community service employing these young misfits and she
should be thanking him.
can you apply this in your Business?
encourage your customers to give you feedback at every
opportunity, both positive and negative.
Then, act on
Take the time
to listen to your customers and reward them for giving you
negative feedback. Remember, if someone complains, there
will probably be a lot more customers who simply don't
come back, rather than go to the trouble of contacting
Hey, they have
to write a letter, find a stamp, stop at the post office
and mail it, or pick up the phone to complain in person
and risk being abused...no, it's much easier to just not
shop with you any more and then bag you to everyone they
They will be
talking to their friends about the bad service you give,
and you won't be able to do anything about it because you
won't even know...
Then, to really
get you back, they will give all of the money they had
previously spent with you to your biggest
your head in the sand and pretend that your Business is
perfect. Look for the weak links in your customer service
and remove them - quickly before they cause too much
You will make
a lot more money if you do...
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