How to Manage Customer Complaints

We consistently receive emails asking us to provide information on how to manage and handle customer complaints. What should a company do, say or avoid? What steps or procedures should be taken to solve current problems and avoid future ones?

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The emails we receive are predominantly from the people on the front lines who've received no guidance on how to manage the situation, or who have managers committed to traditional approaches despite the costs or consequences.

The fact that so many employees (across various industries) continually seek our advice when handling customers or when trying to craft their own perfect apologies suggests that many organizations still don't appreciate the costs of negative customer feedback, and the value of effective customer communications for their bottom line.

The first step for any organization is to have a documented customer complaint procedure. While the procedure itself can be quite simple, the benefits it will provide will be felt throughout the organization. A systematic accounting of each complaint, along with the response and reaction, is essential to improving overall customer relations and customer retention.

For customers, a careful and consistent tracking of complaints and procedures shows a level of professionalism and conveys to clients that their complaints are taken seriously.

For employees, it provides a road map, a set of standard operating procedures, and demonstrates management support for those on the front lines. It also empowers staff to handle situations more confidently, efficiently and effectively.

For management, it identifies potential weaknesses and, more importantly, opportunities for improvement.

Customer Complaints Procedure

The general guidelines for any procedure dealing with customer complaints are as follows:

Make it easy for customers to be heard. Whether online, over the telephone or in person, make sure that your customers can easily voice their complaint—without having to wait. Finding it difficult to contact the right person will only add to their frustration and dissatisfaction.

Listen carefully to what the customer is expressing and give them (and their complaint) your undivided attention. Don't interrupt them (if the complaint is being given in person); don't presume you understand their complaint (based on prior experience) before they've had a chance to fully explain their problem; and don't re-interpret their complaint based on what you think their problem is. And do not simply scan written communications—read every word of the letter to understand the issues from their perspective.

Once they have expressed themselves, follow up by asking if there is anything else that needs to be addressed.

Agree with the customer that a problem is real and relevant—don't dismiss or disagree, and never argue.

Apologize. Extend a perfect business apology.

Resolve the issue. Ensure that your staff is empowered with the tools required to resolve the matter. Define clear written guidelines for compensation/restitution as appropriate. It's important that your staff are able to quickly act on a complaint.

Once the issue is resolved, ask the customer again whether there is anything else that needs to be discussed.

Thank the customer for bringing the matter to your attention, and for improving the quality of a product or service.

NOTE: Make sure that each complaint is documented in a standardized format for internal purposes and analysis. Identifying patterns can help identify weaknesses in an organization's policies and procedures.

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Customer service personnel (or anyone dealing with customer feedback) need to be trained on how to handle complaints by laying out the procedures to follow—this is a critical first step.

Employees need to know the steps to take, how to communicate an effective business apology, and what tools are at their disposal to resolve the issue. A clearly defined customer complaint procedure will empower staff to handle a situation professionally, effectively, and in a timely manner.

Learn about customer advocacy and why a proactive approach to customer retention is important to any business.