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How to Deal with Small Business Customer Concerns and Complaints

When a small business customer expresses a concern or has a complaint, don't panic. Use the customer complaint as an opportunity to improve small business service or product for all your customers and to grow your business as a result.

Dissatisfied customers complain to dozens of friends and post disparaging messages that go viral online, but you’ll find it comforting to know that if you handle complaints well, you’ll circumvent potential damage and strengthen your customer relationships. Use customer complaints to lead your business to service improvements and higher satisfaction levels.

Understand why small business customers don’t complain

The Direct Selling Education Foundation reports that for every complaint that a customer makes, the average business has another 26 customers with unstated problems. Here’s why disgruntled customers stay mum:

  • They don’t think that anyone in the company cares.

  • They don’t know where to register their dissatisfaction.

  • They’re embarrassed to say anything because they know the owner.

You can’t fix it if you can’t hear it. Talk with customers to hear their concerns, along with suggestions for how you can improve your service.

Encourage complaints from your small business customers

You’re better off hearing about dissatisfaction directly than indirectly — or not at all — so be open to concerns and comments, and study every word of feedback you receive.

  • Talk with current customers. Find out their opinions and their ideas about how you can be of better service. Opt for ongoing conversation rather than one-time surveys, and give customers the chance to explain themselves fully and without interruption. In addition to what they say, watch for unstated clues to dissatisfaction.

  • Talk with past customers to discover why they left, where they took their business, and what differences they were seeking.

  • Talk with employees. Ask what kinds of concerns they’re hearing. What needs do they sense? What do customers want that you aren’t delivering?

  • Respond promptly and show appreciation for input. When changes result, thank the person who shared the idea. If a change is in the works, explain your plan and listen for further input.

Encourage customer pickiness. Companies that win customers for life create discerning and demanding customers with expectations so high that no other business can rise to the occasion.

Small business customer clues to dissatisfaction

Many customers consider small business owners and employees their friends. For that reason they hesitate to directly complain or criticize.

That means small business owners need to watch for unstated clues to dissatisfaction, including the following:

  • Customers compliment other suppliers.

  • They reminisce about how things used to be.

  • The compliments they used to offer quit coming.

  • They return products, an act you should treat as a nonverbal form of customer dissatisfaction. If products are coming back, either they’re faulty or your communication was unclear and the product was misrepresented. Similarly, watch what’s backlogged as an indicator of unmet consumer demand.

Hidden in your customers’ comments may be concerns or complaints about your business, so listen carefully.

Turn small business complaints into loyalty springboards

When a customer is dissatisfied, stop whatever else you’re doing and give your full attention. First deal with the customer and then deal with the problem. Follow these steps:

  1. Listen to the problem.

    • Let the customer rant, preferably out of earshot of others.

    • Don’t argue, make excuses, or blame others. Don’t make the problem seem routine by pulling out a form to complete.

    • Empathize. Paraphrase the problem and offer to help.

    • If your company is at fault, apologize. If you’re not sure, give the customer the benefit of the doubt, within reason. Protect the relationship, the potential future business, and the chance for good word of mouth.

  2. Take action.

    • Offer options to allow the customer some control over the outcome.

    • Say what you can do, not what you can’t. Opt for I’ll see that the refund is ready by 10 a.m. tomorrow rather than We can’t cut a check today.

    • If your product or company is at fault, a refund or replacement isn’t enough. Provide a no-strings-attached add-on that delivers value with no additional spending requirement.

    • Keep in mind that refunds or exchanges may address the complaint, but only personal service repairs the relationship.

  3. Follow up.

    • Confirm that the problem was resolved to the customer’s complete satisfaction and ask if you can be of further help.

    • Thank the customer for voicing concern and letting your company make things right.

  4. Fix your business by revamping systems, if necessary, and asking

    • Is this the first complaint of its kind or one of many?

    • Can we eliminate this fault?

    • Did we address the customer concern promptly and well?

McKinsey & Company has conducted research showing that when a company resolves a complaint, more than half of initially dissatisfied customers will buy again from that business. If the company resolves the complaint rapidly, the number rises to 80 percent.

If the company resolves the complaint on the spot, the chance of keeping the customer’s business soars above 90 percent, often higher than if the customer had never experienced the negative issue.

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