"Do You Look Forward To Customer Complaints...Or Do You Go Out Of Your Way To Avoid Them?"

By Rocky Tapscott

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.

Customer 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 line.

Don't believe me?

Let's look at a couple of examples...these stories are true, just the people's names have been changed.

The $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 weeks.

John 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."

John protested 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.

The shop 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 buying anything.

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 had encountered.

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 himself!

John was speechless

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.

Imagine if 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.

That's $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.

That extra 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...

And remember, 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 well.

This one 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.

Imagine the impact when everyone in this small town hears this negative feedback from more and more people. The Business is doomed.

Contrast this to Peta's experience - this is how to handle a complaint

Peta also 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.

She just wasn't going back!

Two days 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.

Peta outlined 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 store.

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 terrible experiences.

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 again.

He invited Peta to come down to the Bakery and meet the girl, Anna, who would gladly give her a sincere, personal apology.

Can you imagine the thoughts going through Peta's mind at this point?

Suddenly 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.

Kinda makes you think doesn't it?

Of course, 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 community.

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.

So how can you apply this in your Business?

Always encourage your customers to give you feedback at every opportunity, both positive and negative.

Then, act on it!

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 you.

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 know.

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 competitor!

Now that hurts...

Don't bury 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 damage.

You will make a lot more money if you do...

Until next time,

Kind regards,


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