When a business makes promises about its products or services but fails to deliver on the customers expectations, it results in customer complaints.
If a company continually delivers poor customer service and ignores the complaints of its customers, it will eventually go out of business.
These days, customers have way too many options available to them and they will not hesitate to turn to your competitors if they experience bad service.
That’s why it’s crucial to understand exactly how customer complaints affect customer satisfaction so you can make your customers feel heard and valued.
This will help you increase conversions and boost customer lifetime value.
How Do Customer Complaints Affect Customer Satisfaction?
Everyone knows customer service has a lot of positive effects on a business.
But, how exactly does it help to boost sales?
Answer: Happy customers tend to buy more.
You don’t need an online course to tell you that when a customer has a problem or complaint that is taken care of, it helps businesses retain loyal customers which leads to repeat purchases.
In fact, the customer service market is estimated at a whopping $7.6 billion.
By responding to customer complaints in a professional and timely manner, you’re letting the customer know that they are valued and that your business isn’t just out to get their hard-earned cash.
Those customers will also boost sales by referring others to your business.
According to studies, 83% of consumers are willing to refer brands after having a positive customer experience.
When customers and prospects see that your business takes the time to respond to, and provide solutions to all customer complaints (whether on your own website, social media, or third-party review sites), it makes it more likely that those people will become customers, as well.
But, if you have a lot of customer complaints that are continually ignored, that poor customer service will impact your business in the following ways:
- Loss of profits
- Loss of return business
- Loss of customer loyalty
- Loss of referral business
- Loss of reputation
Let’s take a closer look at some of these effects of bad customer service.
Loss of Profits
Unhappy customers will invariably limit your business’s ability to make money.
If someone has purchased a faulty item from you, or if they are confused by the service you provide, your first priority should be to help them – and get it done right the first time.
This is called First Contact Resolution, or FCR, and it can save your business a ton of money in the long run.
For this to work effectively, you must have well-trained operators with the right temperament.
You can work with freelancers or agencies, but make sure your customer service representatives have an in-depth knowledge of your product or service so they can assist your customers effectively.
Great product management teams, sales teams, etc. are all important to your business. But unless you have a stellar customer service team working on the front lines, you risk adding to the frustrations of already unhappy customers – something that can quickly turn into a nightmare for your business.
A famous example of this is United Airlines.
The company refused to admit its mistake after an employee broke a musician’s guitar.
This led to the airline losing $180 million over something that could easily have been avoided if they had good customer service in place.
Loss of Return Customers
Success comes down to effectively managing every aspect of your business – especially the customer service department.
It doesn’t matter how amazing a business’s product or service is, if they don’t meet the service expectations of their customers, they will find it hard to secure a return business.
And, as every marketer knows, it’s a lot cheaper to retain an existing customer than it is to acquire a new one.
It’s obvious that creating a fantastic customer experience is a lot more cost-effective in the long run.
Retained and loyal buyers can increase a business’s incremental growth significantly each year.
That’s why businesses that ignore the needs of their customers often find it extremely difficult to scale and grow.
You need to listen to your customers and do your best to consider and address their needs so you can improve your service overall.
The customer service you provide doesn’t have to be the best in the world, but when customers feel that you are listening to them and see that you are making a real effort to fulfill your brand’s promise to them (on your website and everywhere else online), it makes it more likely that they will stick with you in the long run.
Loss of Customer Loyalty
Loyal customers are not forever!
No matter how well-established your business is, or how large your customer base, having poor customer service can change all that in an instant.
Even your most loyal customers will abandon your business if they don’t feel appreciated, or if your staff is impatient or rude.
Unless you can make your customers feel that they can get help from your business any time they need it, they will take their money somewhere else – even if you provide top-notch products or services.
For example, a business like this one that focuses on cybersecurity might discover that customers typically complain about the VPN crashing often.
By addressing those concerns on their blog, social media, and anywhere else customers leave complaints, they make it less likely that those people will turn to one of their competitors for a better experience.
The same goes for any other type of business, such as this website that offers a predictive dialer, and you’ll find that simply acknowledging your customers’ complaints – and taking steps to remedy them – is often enough to get them to remain loyal to your brand.
Loss of Referral Business
If customers are unhappy about any aspect of their experience with your brand, you can be sure that they will be telling others about it.
In fact, studies show that up to 95% of customers who have experienced bad customer service will share their experiences with other people.
Wherever they go online, whether it’s on social media, blogs, or third-party review websites, they will be eager to share their negative experience with anyone online willing to listen.
The unhappy customer in our United Airlines example above actually went so far as to write an entire song about his bad experience – and the song went viral, showcasing the power of a single voice in today’s age of social media.
If you find your business in such a situation where customers are posting bad reviews online, it means that instead of getting positive referrals that send more customers to your business, you actually have people that are working against your brand and sending customers to your competitors, instead.
And, for every negative review your customers post online (whether formally or informally), it has been shown that it takes up to 12 positive reviews or video testimonials to counteract the negative one.
That’s why customer complaints are not to be taken lightly as they can make or break your business.
Loss of Reputation
Many brands grow to phenomenal levels by associating themselves with other, well-established brands as a way to boost their own credibility and increase trust.
For instance, some companies find high levels of exposure by posting branded content on top-quality blogs that accept guest posts.
But, a business’s reputation as a trustworthy authority in the industry can quickly crumble due to excessive customer complaints online.
In today’s world, customers have the power.
If they feel like your brand didn’t fulfill its promise to them, they can voice their concerns on any of the many platforms online.
For most brands, this is not such a huge issue since they tend to follow up on customer complaints and take action to remedy the issue.
However, not all brands listen to their customers or make the effort to resolve issues sincerely and in a timely manner.
That’s why sometimes customers are forced to publicize the truth of their terrible customer service experience on channels like Facebook, Twitter, Google Plus, etc.,
Unfortunately, this often leads to an adverse impact on the business’s reputation.
These types of comments spread very quickly online and a business can soon find itself with a reputation for bad customer service.
For instance, if a training platform like Preply were to experience a barrage of negative customer complaints about their language programs, it would certainly cause damage to the business and have a huge impact on their bottom line.
Long story short, excellent customer service is essential to improving sales in your business, and by taking care of complaints swiftly and effectively, you can avoid incurring damage to your business reputation.
The Positive Impact of Customer Complaints
Yes, customer complaints have the potential to kill a business.
But, it’s not all bad news.
Customer complaints can also be good for your business – as long as you can swing a negative into a positive.
There are a lot of webinars online that teach marketers about how to turn unhappy customers into valuable resources for your business.
And, this is something that’s well worth considering, too, especially when you consider that Forbes reports that businesses lose over $62 billion every year due to bad customer service.
Poor CS causes customers to move to other companies in search of a better customer experience, allowing competitors to gain the upper hand.
This is good news for you because it means you can capitalize on those types of situations and increase your sales if you provide great customer service.
But, to do so, you must first be able to monitor, track, and categorize customer complaints.
You can do this by finding effective ways to collect feedback from your customers.
Benefits of Customer Feedback
When it comes to digital marketing, businesses need a great online reputation in order to succeed.
According to statistics, over 85% of consumers check online reviews before making a purchase. They trust reviews from other users as much as they do personal recommendations from friends and family.
Online customer reviews are a big part of this and they play a major role in determining the success of a business.
You can also collect feedback in a variety of other ways to help you address all the issues and concerns your customers have.
This will help you maintain a great online reputation and ultimately increase customer satisfaction.
It also benefits your business by helping you to:
- Minimize buyer’s remorse
- Keep customers invested in their purchase
- Improve the likelihood of return purchases
- Increase the likelihood of a recommendation for your brand
- Bring in new customers
- Encourage more great reviews
Furthermore, collecting feedback will benefit your business by helping you with:
- Upgrading your product or service;
- Improving policies and procedures;
- Boosting customer communication; and
- Having a positive impact on your brand image.
For instance, a fashion eCommerce website might use customer feedback to help them determine which types of products are best for their online store and get rid of lines that don’t perform well.
Customer feedback can help you improve every aspect of your business, from simple things such as your logo design to more complex issues, such as the brand partners you work with, and everything in between.
How to Collect Customer Feedback
Here are a few ways to collect customer feedback for your business:
- Use a WordPress chat plugin to get feedback
- Use Email surveys for new customers
- Monitor all your social channels for complaints
- Call your customers regularly
- Use a survey maker to get feedback on your site
Collecting customer feedback also benefits your business because you don’t need to spend large amounts of money conducting marketing surveys since the feedback will provide you with valuable customer insights for free.
What to Do If One of Your Customers Complains
As you have seen from the reasons outlined above, customer complaints can be crucial for product growth.
However, it’s how you deal with them that makes the difference.
For instance, arguing back doesn’t help when dealing with a bad review, even when you’re not at fault. You only make your brand look weak by getting on the defensive.
That’s why it’s crucial to keep a cool head and always be polite when dealing with irate customers.
It’s also a good idea to apologize to get them to come down.
Remember, customers complain when they feel that their expectations haven’t been met. For the most part, they simply want to be heard.
You’ll find that things tend to go a lot smoother if you just let them know that you are listening. Show them what they have to say matters to you and your business.
Below are 7 tips to help you respond well to customer complaints so you can boost customer satisfaction.
Each of these steps has been proven to be effective when it comes to complaint handling uncomfortable situations and transforming them into something constructive for both your business and your customers.
- Address the customer by name
- Make a sincere apology to the customer
- Sympathize with their problem
- State that you are solving the issue
- Offer a gift (refund/discount/etc.)
- Ask the customer if they are willing to change their review
- If all else fails, accept the negative review
These are just a few tips to help you respond to negative feedback.
However, you will find that by implementing them consistently as part of your customer care process, you will have a lot fewer negative reviews and a lot more good reviews from satisfied customers – many of whom started off as unhappy customers.
The bottom line is that poor customer service will always create a negative impact, regardless of how well-established the business is.
And since businesses need repeat customers and sales (as well as the positive feedback customers provide) in order to succeed in today’s super-competitive business environment, this is one area that businesses cannot afford to neglect.
Use the information in this article to help you understand how customer complaints affect consumer satisfaction so you can increase customer loyalty, boost your reputation, and get more return business.
Your turn. Do you feel that your company offers the best customer service possible? If not, what changes do you think you could make to increase customer satisfaction? Share your thoughts below!