Why customer complaints are good for business

Even though it sounds counter-intuitive, a customer complaint is actually one of the best ways for a company to grow and succeed. Complaints are far from being the final nail in a corporation's coffin, despite their appearance as such. It is all too common for customer complaints to be received with angst, or perceived as an assault on people's hard work. Rather, they provide valuable insights into your business, and there are many reasons why they can help you grow.

As part of this article, we'll explore several reasons why they're so good for business, as well as offer some tips and tricks on how to make the most out of them.

First, let's examine some statistics about customer complaints to reinforce their importance. According to statistics, 13% of unhappy customers tell 15 or more people that they are not satisfied with a product or service. Even if they don't tell anyone about their bad experience, 60% of unhappy customers will stop buying from a company and switch to a competitor after just one poor customer service interaction.

The complaints of customers enable a business to turn around and iron out creases brought about by poor service delivery. Now let's look at a few more reasons why customer complaints are actually beneficial.

Save money

Your business can learn a lot from customer complaints about what's wrong with it and what needs to be improved. When a business is having trouble, it is common to seek out external professional advice in order to pinpoint, isolate, and resolve the problem. What many businesses don’t realise is that there’s a readily available list of consultants available for free. Your customers. They can give you real-time feedback on what you're doing well and what you need to improve. Complaints from customers show you exactly where you need to focus your efforts, without the need to pay for an expensive consultant or business coach. You may have saved thousands on consultant fees by listening to customers.

Increase profit

As you listen to customer complaints, you may discover ways to increase your business's retention rate. Each complaint highlights how your business failed to meet the customer’s expectations but also what you can do to meet other customers’ expectations in the future. It’s up to 7x more expensive to attract a new customer than retain an existing one, which means you can increase your profits by selling more to existing customers without spending on extensive sales and marketing to attract new customers.

The voice of many

A complaint is a customer heard. It’s the unhappy customers you don’t hear from you need to worry about. Studies have shown that up to 96% of customers won’t complain about a business with 91% simply choosing to never return. Each complaint you do receive is an insight into what those that stayed silent may have experienced. Receiving a customer complaint is great because it enables you to know what you’ve done wrong. No business has a 100% happiness rate with their customers but it’s the businesses that don’t know why people are leaving and never come back that are losing the opportunity to grow.

Save resources

Each customer complaint is reactive to a bad experience, which means there’s not much you can do but fix it for that individual. But, by fixing the source of the issue you’re able to prevent a future customer from experiencing that issue. This means you can save time and effort spent fixing problems and focus those resources on other areas of the business.

Replying to complaints, understanding the issue, investing in training and working on fixing processes to reduce the chance of the issue happening again all cost a business in some way. By listening to complaints, and acting on them you reduce the long-term business impact of that issue.

Engaged customers

A customer complaint demonstrates that your client base wants to see the business improve, and that they have the goodwill for you to deliver the necessary changes. Even after a negative experience, they’re willing to give you the valuable information to do better next time. This willingness to work on your business, for free, should not go unnoticed. After all, customers that complain are investing their time to ensure the business has the opportunity to get better and be more successful.

Free marketing 

They say ‘no publicity is bad publicity’ but this is especially true of negative public reviews or complaints. That’s because a public complaint is an opportunity to show how you deal with issues. If you handle it well people reading that complaint can also see how you manage issues. Being kind and compassionate in your response will help you win more business as it shows that when things go wrong you have a process and plan in place to deal with those eventualities.

Despite all the great reasons to engage with customer complaints, it can be hard to see those benefits if you’re constantly dealing with negative public reviews. Therefore, it’s worth implementing a process that enables you to manage complaints in a constructive and effective manner. It can be best for you to do the following as early as possible:

1. Catch negative comments before they influence other customers.
2. Have a process in place to manage negative feedback.

You can achieve the first point by investing in a platform like Review Tui. By using customer feedback surveys and sending them to as many customers as possible you can capture negative feedback before it finds its way online. Most customers will only resort to leaving a public critique of a business if they feel they haven’t been listened to or haven’t been given the opportunity to voice their opinion. Venting their feedback into a customer survey that you’ve sent them helps to reduce this from happening.

Investing in a customer feedback platform also enables you to process and manage the responses as you see fit. You can either leave them and collate the data, or you can try to salvage the relationship and turn the customer into a promoter.

As a first step, a business should look to develop and implement a customer feedback strategy. By building a framework to ask questions and request responses you increase your chance of getting the valuable insights that customers offer for growing your business. You can get your free digital copy of our customer feedback strategy guide by clicking on the button below.