How customer complaints can help your business
By Jenny C. McCune • Bankrate.com

Customers have long known that the squeaky wheel gets the oil. This process also has advantages for the business owner who's hearing what's wrong.

Listening to, and even asking for, complaints from existing, past and would-be customers can be a great way to fine-tune your business machine and get all the squeaks out of it.

Benefits include building customer loyalty and improving company performance, according to Gene Griessman, author of Time Tactics of Very Successful People. Griessman so firmly believes in soliciting and acting on complaints that he's devoted a chapter in his book to the topic.

"I was doing some consulting work with a major automobile brand, and I found a dealership with the highest customer loyalty," Griessman says. "When I interviewed them and I asked them why their customers were so loyal, they told me, 'It's how we deal with complaints.' That's what set them apart."

Getting the best out of bad news
Start with a customer comment form. "Don't just ask for compliments," Griessman says. "Ask for the bad news."

Follow up on any complaints that come in on the forms. Try to get complainers to be as specific as possible about the problem.

If an irate customer comes to you directly, first try to calm the person down. Then take the customer to a neutral corner away from the hubbub of the office.

Take notes. "Just the fact that you are taking notes will cause the person to slow down and think more about what he is saying since he knows it's being recorded," says Griessman, a professional speaker and consultant based in Marina Del Rey, Calif.

Try to be as objective and dispassionate as you can be when documenting the complaint. It can be hard, says Griessman, but emotionally distancing yourself can really help you uncover what the problem is and any possible solutions.

Spend time evaluating the complaint and its source. Is the criticism justified?

Handling a complaint
Of course, what's almost as important as collecting complaints is doing something about them, and doing it quickly.

Respond to the customer and let him know that his complaint has been received. Griessman recommends a form letter with a personal reply written on it.

Sometimes a complaint can be dealt with easily. If a customer complains that your store doesn't open early enough and your follow-up investigation indicates earlier hours would be a boon not just to the complainer, but to many of your customers, you can simply start opening at 8:30 a.m. instead of 9 a.m. But be sure to let the complaint originator know that his comment was heard and you are adjusting your hours because of his complaint.

When a solution isn't readily apparent, the best thing to do is to ask the complainer, "How can we make this right?" Not only will you get a solution that the customer will agree with since he's suggesting it, says Griessman, but chances are his idea of how to make amends will require less work or expense on your part than what you would have come up with without the input.

Griessman offers a personal example that got him more than he would have asked at a steakhouse. His steak arrived well done instead of medium rare and that's what he told his waiter when asked, "Is the steak done to your liking?"

After declining to wait for a new steak to be grilled, Griessman ended up getting his entire meal for free. Had the waiter asked him what the restaurant could do to make amends, Griessman probably would have only asked for a free dessert, not an entire dinner. The restaurant's initiative cost it in the short term, although it did produce a happier, and probably repeat, diner.

You also should examine any complaint to see if there is a systemic problem. Was Griessman's overly cooked steak an isolated incident or are medium-rare steaks turning to well done under the heat lamps while they await being served?

Exit interviews open doors for new customers
When customers leave for another vendor or prospects choose another company over your own, try to conduct an exit interview to determine why they didn't choose to do business with your company.

Don't attempt to win back business at this point. Simply tell them you'd value any information they can give about why they chose your competitor. Was there a single point about your product or service that was inferior? Was price an issue? Also check to see if you slipped up anywhere. Did you fail to answer questions or supply information when asked?

In the case of a defecting customer, also try to find out whether the competition made any untrue claims, either about your product or service or theirs. This can be tricky. You'll need to probe and go over what the ex-customer was told by the competitor.

Basically, you'll want to keep an open mind when handling complaints. The customer isn't always right, but his criticism can help improve your business. The key is to stop, look and listen to the complaint and then act. Follow this process and your company will run like a well-oiled machine without any squeaky wheels.

Jenny C. McCune is a contributing editor based in Montana.

-- Posted: May 22, 2002