Customer’s complaints? They are just the tip of the iceberg!

“I know my clients are satisfied, because very few of them ever complain.” If I got paid every time I heard a customer tell me this, I would be a very rich person. If you want to know why customer complaints are an inappropriate way to measure customer satisfaction, keep reading…

I would like you to put yourself in the shoes of your client. It shouldn’t be too difficult as we are all customers every day of our lives. Let’s imagine that you have invited someone close to you to a celebratory dinner. As the evening progresses, it becomes clear that the service in the restaurant isn’t as fancy as you would have liked, and the food is okay, but nothing to write home about. Despite the restaurant’s shortcomings, when the waitress nears the end of her meal and asks, “Did you enjoy your meal?” what does she say? I’m not a gambling woman, but my money would be on you responding with something like “That was lovely, thanks.” Why? Well, there are several reasons, firstly because most people feel that they will ruin a nice evening by complaining; second, it’s usually too late to do anything about it anyway, so it’s pointless; and third, most people don’t like to complain face to face because it feels conflicting. However, when our friends and family suggest going to the same restaurant for dinner, what do we do? We tell them they shouldn’t bother and list all the reasons why they should go elsewhere. Sounds familiar? So why would your customers be any different?

Recognizing this phenomenon, BA decided to carry out its own investigation to see what was happening with its complaints procedure. Surprisingly, they found that only 8% of customer complaints were ever registered with a customer service representative; in other words, just the tip of the iceberg. Instead, 23% spoke to the nearest employee and another 69% suffered in silence and told no one at BA. If BA had been basing customer satisfaction on the number of complaints received, it would only have been looking at a small part of the total picture.

“Very few dissatisfied customers complain, which makes this measure of customer satisfaction meaningless.”

Very few customers will complain directly to you, but that doesn’t mean they won’t complain to other people. In fact, it’s actually quite the opposite! Let’s think about the restaurant example I gave at the beginning of this article. Be honest, if a restaurant offered poor food and service, how many people would tell you?

A 1999 research study found that, on average, a dissatisfied customer will tell 10 people about their experience. In turn, these 10 people will each count to 5 more people, which means that a total of 50 people will have found out about your bad experience. A sobering thought, don’t you think? What’s even scarier, however, is that if we work on the basis that only one in ten of your dissatisfied customers file a complaint with you, then in total, for every formal complaint you receive, 500 people will have heard talk about your customer problems!

“Customers rarely complain to the service/product provider. The reality is that they are much more likely to tell their friends, who in turn will tell their friends, creating a pyramid of dissatisfaction.”

The good news is that this is not a problem without a solution. Equally, the solution is something that resorts large and small can achieve. In simple terms, all you need to do is ask your customers what their opinion of you is! Now, don’t get me wrong, it takes a courageous organization to ask your customers for their honest opinions, and you have to be prepared to take the hard stuff. However, only those organizations that understand what makes their customers unhappy are capable of implementing improvements for the future.

Ultimately, if you run a customer satisfaction survey, it will not only give you a benchmark of where you are today, but if you ask the right questions in the first place, it will also allow you to highlight your priorities for improvement so you know you are putting your energies into those areas that are most important to your customers. As the old adage goes, you can’t manage what you don’t measure.

“Your customers hold the key to the success of your business. Only by understanding them better can you unlock the future potential of your business.”

Measuring customer satisfaction is only the first step in the course. It’s what you do with the findings that will make the real difference. By turning information into action, in other words, by making the necessary changes that will improve your customer satisfaction, your business could benefit from:

  • Improved customer retention.
  • Increased sales as satisfied customers tend to buy more frequently and from a wider range.
  • Greater control over your customers because you understand your customers better.
  • More referrals generated from your current clients.

How much incremental revenue would even a small increase in each of these areas bring your business? Like I said, I’m not a gambling woman, but I would wager that it would be much lower than the investment required to figure out what makes your clients tick.

Copyright (c) 2007 Juliet Mumford

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