Handling complaints can be a positive way to keep clients

ALAN O’NEILL

NOW the fourth-largest beer manufacturer in the world, Carlsberg is a Danish institution known for its humorous TV advertisements. A few years ago, one ad showed an employee walking a quiet corridor in Head Office. Hearing an old-style telephone ringing relentlessly in the distance, he established the sound coming from behind an old door with a sign that read: Complaints Dept. Scraping back the dust, he answered the telephone. It turned out to be a wrong number. The inference here is that Carlsberg never receives complaints.

For the rest of us, that concept is highly unlikely. Even with great products and people, everyone gets complaints. Sometimes we cause them and other times it may be someone else’s fault.

Regardless, research shows us that typically 20pc of global transactions have some hitch but only 4pc of customers who had a bad experience actually complain. Of the other 96pc that don’t complain, 91pc of them defect and take their business elsewhere. That equates to a possible 17.5pc annual defection rate.

There is no room for complacency in handling and managing complaints. Customers will defect when they have an issue unresolved — which in turn has serious implications for retention and future sales. An effective complaints management programme is essential for all organisations regardless of size.

How often have you personally experienced complaints handled badly? Sadly, it seems more the norm these days. I had an experience this week, where I was overcharged by a large furniture store. Trying to get a refund turned out to be a major inconvenience and took 10 days to resolve.

Challenges with complaints

When complaints are handled badly they often end up costing you hard cash in compensation. However, when you act professionally early on, you win with a relieved customer and possibly no financial loss. The challenge for your organisation therefore is twofold. Prevent them as much as possible in the first place but also handle them effectively when they do arise.

EPCAF — a model for service recovery

For a start, change your vernacular. Stop the negative ‘complaints’ word and switch to positive ‘service recovery’ instead.

It will help to alter the mindset internally. Everyone in your organisation should be trained on how to recognise a service issue and handle it skilfully. I have been encouraging my clients for years to embrace EPCAF as an effective model. It will work in almost every situation and can be learned by all who interact with customers.

E — Empathise

We as service providers should stop and think about the impact of our failures on our customers. I appreciate that not all issues are caused by you. The customer too can get it wrong and blame you unfairly.

But you still need to handle it effectively. If you are defensive, argumentative, blaming or pass the buck, you will inflame the situation. Use empathy instead. The customer is usually irate that they have had an issue in the first place and this approach genuinely helps to calm them down. Phrases such as ‘I’m sorry that you’ve had a bad experience’ are not an admission of fault, but will help to placate the situation.

P — Probe

The customer will have told you their story in their own words and in their own way. It may have been peppered with jargon, with profanities or with limited or useless information which is not always helpful to you.

To understand the real issue, the implications and the causes of the problem, you will need to establish the full facts.

Gently ask appropriate questions to get the relevant detail. Open ended questions will help you to get information in a nice softer way than closed-ended questions. By asking questions you will take control the situation.

C — Clarify your understanding

Having heard the customer’s story, summarise your full understanding of the situation. This has the effect of showing the customer that you’ve listened and that you care. It also gives you the opportunity to check if you’ve missed an important piece of information. It acts as a bridge and sends a gentle message to the customer that you know the full story and that you are now about to move on to finding a solution.

A — Agree an action

It is now time to agree a solution. Agreeing a solution is usually the better tactic here than telling the customer what you will do. By telling you might risk disagreement which you may have to back down from again. And do not quote company policy!

That’s like a red rag to a bull. Usually customers will be reasonable at this point, particularly if they feel you have listened, empathised and truly apologised for their inconvenience. Ask ‘what would you like us to do for you?’

F — Follow-up

Having secured agreement on an appropriate solution and course of action, be sure to follow through on your promises. The cynical customer is of course expecting you to forget and mess up again. Prove them wrong and show that you truly have taken their service issue seriously.

Summary

When you look on service issues in a positive way with skill and a positive attitude, the results will be much improved. There is evidence too that when customers have had their service issue handled well — they actually become stronger advocates for you in the future.

Take service recovery seriously. Document all cases so you can build up data and trends for analysis. With that you can take corrective actions to reduce or eliminate them completely in the future.