Attributes on a chalk board: Service, Efficiency, Quality, Reliability and Customer at the centre

Complaint handling can create more satisfied customers

At some point, it is inevitable your business will get it wrong, and you will test your complaint handling. Perhaps you’ve grown too fast, and haven’t been able to scale to support the customer, or a product failed. Maybe it is just the customer’s understanding doesn’t match what you planned. Regardless, complaints are an inevitable part of doing business and how you handle them is integral to your reputation.

It doesn’t matter the cause, in every instance there are opportunities. You should be thankful this customer is expressing their dissatisfaction because only roughly 4% of customers will give you that chance.

Benefits from complaint handling

study carried out with an Indonesian bank, confirms what I’ve seen in internal research previously. Handling complaints well can result in a more satisfied customer overall.

Think about that for a moment; you can build a customer’s loyalty when they complain. Although this may feel counterintuitive if you think about your own experience you may realise how accurate it is. Complaints are an ideal opportunity to demonstrate the differentiators of your company such as:

  • Caring and listening about your customers.
  • Processes are efficient and effective
  • You will take actions to exceed expectations

Alternatively, poorly handling a complaint is an almost guaranteed way to lose a customer. Oracle, in their customer experience study, found 89% of customer’s had switched companies due to a poor customer experience. Consequently, when a customer complains is a moment of truth, where they will decide on your service.

We explored the benefits of customer advocacy in our previous article. However, the Watermark 2015 Study on the return for customer experience, demonstrated that a new experience leader delivers four times the growth of a laggard. If you want more statistics on the benefits, you may want to consider reading these 75 statistics.

Resolving a complaint

At a minimum complaint handling should involve the following steps:

  1. Listen and acknowledge
  2. Apologise
  3. Determine a solution
  4. Exceed their expectations
  5. Focus on improvement

Listen and acknowledge

Regardless of whether you think it is a customer mistake, the customer is complaining because in some way your service has failed. This failure may be they don’t understand your business model, or it may be services or inclusions aren’t well articulated. Whatever the reason, the customer is giving you an opportunity, be patient and listen.

Once you’ve heard the complaint, briefly restate the key points. Doing this will achieve two purposes. First, it will ensure you understand the claim and make the customer feel heard. Second, it forces the customer to reflect and review the issues themselves. Quite often complaints can be made in a heated moment; this is an opportunity to give them a chance to reflect.


Typically companies are extremely reluctant to provide an apology. Unfortunately, this isn’t always correct and there is a lot of power in an apology. 43% of customers had a positive response to an apology, versus 23% to compensation.

I’ll be covering off more on apologies in a future article, including legal considerations. However, where possible you should apologise and it should include three elements:

  • Responsibility and regret – Regardless if you are the cause, you’ve failed to meet a client’s expectations. Take ownership and be thankful you are getting the opportunity to address the issue.
  • Reason and resolution – What happened, and most importantly, what will you do about it. You don’t need to provide complete detail, but the customer needs to feel reassured that you care. Take the opportunity to help them understand your position.
  • Release – Once you’ve completed resolution, close out the case by asking if they are satisfied with the handling. You can’t undo what has been done but by following up you demonstrate you care, or if they feel you don’t you will uncover those issues.

Determine a solution

Quite often businesses force a solution on a customer. Take the time to ask the customer what they feel would rectify the situation. This will help you understand if they only want to be heard, or if it is reasonable. There is no point embarking on a solution if it won’t help, determine the answer with them and they will have greater ownership.

You may have realised, working with the customer means your customer service agents need the empowerment to resolve complaints. This empowerment will be a combination of guidelines for solutions and authority limits. For instance, if the customer wants 10% off, this may be acceptable for the business.

Exceed expectations

A person clicking on five stars

With customer service, it never hurts to go the extra mile. There is no simple rule of thumb for complaint handling but a few suggestions for consideration:

  • Engage with the customer – Don’t force it, but try to understand and connect with the customer. This may help you understand some of their frustration so it can be addressed. It will help them believe you care about more than their sale and remember life beyond this incident.
  • Focus on quality – Be upfront about timeframes. If you’ve destroyed a wedding dress a week from a wedding time may be critical, but always keep the focus to delivering a quality outcome. As long as you outline when things will be done, the customer will be more comfortable.
  • Do more – If you see an opportunity to do a little extra for the customer, don’t hesitate. The moments that customers remember aren’t the 10% discount; they are the small surprises, like following up. That when the resolution was done, they found something extra.

As an example, I recently had a poor experience at a restaurant where a waiter made a mistake and knocked a drink onto me. It was a mistake, he was careless, so I could understand. They cleaned it up, and they did what they had to. At the end of the night, they still tried to charge us for the drink though, and I had to prompt for dry cleaning. The reason I share this story is, the incident was a simple error, and I was in a forgiving mood. However, I went from being a strong advocate for the restaurant to a detractor.

Don’t just follow a formula with the customers. If you can think of something extra to make them feel special, take that opportunity because that is what they will remember.

Focus on improvement

The final element of complaint handling is the improvement. I currently work with a large enterprise. Like many businesses they firmly focus on Net Promoter Scores (NPS), however, only recently did I get them to analyse customer complaints. Not one of those customers would provide a positive NPS result, yet they chose to ignore the insights.

Classify feedback in a way that is meaningful to your business and combine it with other data. Ask for feedback on the complaint handling process itself as well. These two focuses will assist you both prevent complaints and improve a customer’s perception of your business if they make one.

If your complaints identify recurring system or process issues, prioritise those for a fix. Nothing will make a customer’s complaint handling a better experience than being able to see you took action to resolve the cause. Don’t stop at one customer, prevent the complaints for future customers as well.

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