3 Reasons why you should Love Customer Complaints

complaints

In a recent blog post by Rick Conlow about improving the customer experience, Rick points to four studies that show the benefits to be gained from improved customer satisfaction:
  • According to Harvard Business Review’s Employ­ee-Customer-Profit Chain, a 1.3% improvement in customer satisfaction scores results in a revenue increase of 0.5%.
  • The Profit Impact of Market Strategy’s database found that companies who lead in service have 12 times the profit­ability and 9% greater growth than poor service providers.
  • Bain & Co. found that a 12-point increase in the net-promoter score doubles a company’s growth rate.
  • A report by the American Customer Satisfaction Index proved that the leading companies consistently outperformed the market. Customer service leaders outper­formed the Dow by 93%, the Fortune 500 by 20% and the NASDAQ by 335%.

Rick states that one of the reasons why companies fail to take advantage of these benefits is that they are ignorant to what is really going on with the customer experience. Companies talk about the importance of customer service but make no serious attempt to understand and measure it. Surveys are a great tool but they have disadvantages as well. They are not done in real time and not all customers will give you accurate feedback.

A better tool and one that is available to all companies is the customer complaint. Complaints are provided in real time and provide a realistic view of the customer experience. Smart leaders, are learning to treat customer complaints like gold, using them to improve their business processes. If used correctly, complaints can be a valuable tool to help measure performance, solve systemic problems, and to create a customer focused culture.

Customer complaint data can help measure performance. A simple system to capture customer complaint data can provide valuable insight on how well an organization is performing. Are complaints trending up or down? How quickly are problems being solved? What products are creating the most complaints? Which type of customers are complaining the most? Reviewing complaint data on a regular basis will help companies better understand how their business is performing and where action is needed to make improvements.

Customer complaints can help solve systemic problems. Data from customer complaints can help identify underlying problems, common failure modes, and systemic issues affecting an organization. Over time, complaint data trends can reveal challenges companies didn’t know even existed. Simple trending and pareto analysis by product, by customer, by type of complaint, by department, or even by employee can help reveal these underlying problems. Seeing the data will help companies identify root causes and solve problems permanently.

Customer complaints can help foster a customer focused culture. When complaints are seen as a valuable source of critical business information instead of a problem, the culture begins to change. Making it a critical business priority to resolve complaints quickly and use the data to solve underlying problems immediately adds the “voice of the customer” to business processes. This culture can be further reinforced by communicating improvements and celebrating successes.

The benefits of improved customer satisfaction are significant and understanding the customer experience is critical. The customer complaint can be the most timely and accurate tool to help companies understand their customers and improve their performance.

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