Dealing with dissatisfied customers

Nobody likes disappointed customers, but if your business handles complaints well you could find an angry one becomes a loyal advocate of your business. Alex Tomlin explains how.

No matter how great your product or service is, you cannot please all of the people all of the time. Occasionally, customers are going to experience problems. So, dealing with complaints, and even encouraging them, should be a key part of any growing business’ strategy.

More than a third of SMEs do not have a formal procedure in place for dealing with customer complaints, according to the UK Business Barometer from the University of Nottingham Institute of Enterprise and Innovation. It suggests that nine out of ten dissatisfied customers will not do business again with the source of their annoyance, while 80 per cent will vent their anger to at least ten people and 20 per cent sound off to at least 20 others. This could all add up to a serious loss of business and damage to brand and reputation.

Furthermore, with only around four per cent of disgruntled consumers actually making a complaint, it is worthwhile encouraging it. After all, the more feedback you receive the more you can tailor your service to better satisfy customers. And when a customer complains they give you the chance to redeem yourself and retain them. Curiously, a well-handled complaint can create more customer loyalty than a perfectly-delivered initial service. They may even tell their friends how great you are!

A clear complaints path

Having a formal procedure does not mean you need a complaints department. If a medium-sized business is getting enough complaints to warrant that, it needs to have a good, hard look at what it’s doing wrong! It’s important to create a culture of dealing with complaints.

‘Consistency is key when dealing with unhappy customers,’ explains Mike Petroot of the Chartered Institute of Management. ‘There must be a clear path to follow once a complaint has been received and everyone must know what that is.’

Related: How to manage customer complaints

One major bugbear of complainants is being shoved from pillar to post, speaking to several people before any progress is made. It’s key that one person takes responsibility early on in the process and sees it through to the conclusion, communicating with the customer regularly, even if it’s not actually their department.

‘As in most aspects of customer relationship, record-keeping is vital, not just as means of knowing what is going on, but also to measure how well the procedure works in terms of satisfying complaints,’ says Petroot. In this way, you can analyse what methods work most effectively.

Tell us what we’re doing wrong

There are several ways of actively encouraging customers to kick up a stink about your business. These can include a telephone helpline (the number of which should be displayed on your product, website and general communications) or freepost feedback cards that can be easily filled in and returned.

Many companies even call or write to their customers as a matter of course to check they were happy with the service they received and if there was anything that could be done to improve it.

Setting up basic steps as part of the culture of your business will improve your chances of turning dissatisfied customers into loyal advocates of you and your products.

Complaints procedure

  • Establish exactly what the customer is upset about. This involves careful listening (which also allows them to let off steam) and clarifying
  • Say sorry – the first step to appeasing the irate client
  • Empathise to show the severity of their grievance is appreciated
  • Find out what the customer wants
  • Come to an agreement on a plan of action
  • If you cannot give the customer what they want, explain why and what it is possible to do for them
  • Try to exceed their expectations if possible, be that by showing extra willing and effort, offering compensation if appropriate, or future discounts
  • Follow up afterwards to be sure the customer is ultimately satisfied.

Adam Wayland

Adam Wayland

Adam was Editor of from 2006 to 2008 and prior to that was staff writer on sister publication BusinessXL Magazine.

Related Topics

Customer Retention

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