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Data accuracy gives cause for complaint

WINNING a new customer costs five times as much as it does to keep an existing one. Even so, the average business will lose between ten per cent and thirty per cent of customers each year. Two-thirds of these will leave because they were treated with indifference.

It is wrong to assume complaint data accurately reflects the level of customer complaints and the level of satisfaction or that repeat customers are satisfied customers.

The facts are that only four per cent of dissatisfied customers complain. The other 96 per cent go elsewhere and 91 per cent will never return.

They also tell around ten people about their problem.

A clothing retail study found that one in four customers had purchased products they subsequently found unsatisfactory but only 43 per cent sought redress from the retailer and none from the manufacturer.

The customers’ willingness to use the retailer again was associated with the redress obtained from the store.

A further study by SAKS Fifth Avenue department store found where complaints involving purchases of less than $100 were handled to the customer’s satisfaction, 70 per cent of customers remained loyal.

For more expensive purchases the figure was 54 per cent.

Regular monitoring of complaints and the soliciting of dissatisfaction has increased some firms’ customer satisfaction levels to 93 per cent and substantially reduced warranty costs.

Businesses should see customer complaints as opportunities and have an established system for customer complaint handling.

They should make it easy for customers to complain.

If employees seek complaints, 94 per cent of dissatisfied customers will complain rather than only 4 per cent.

Employees should be empowered to respond to and resolve each and every complaint.

They should be educated about the strategic and financial value of complaints and the need for urgent responses.

Staff should be trained to stay calm, avoid admitting liability and let the customer get the story off their chest.

They should know to get the facts, find out what the customer wants and take action to solve the problem.

The customer should be told what will be done and when. Action taken should be recorded and followed up.

Customers who complain should be rewarded with thank you notes, telephone calls and small gifts.

Customer service is more than knowing how to handle complaints.

Clear policy should be drafted to help all staff deal with complaints but customer satisfaction needs to be the most important focus.

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