Return on Complaints

Conventional wisdom has it that people talk about negative experiences with products, services, or organizations with more people and more often.

However, people are actually more active in telling their friends about a positive experience.

In its 2010 Global Customer Service Barometer survey, American Express found that, contrary to popular belief:

[...] customers are spreading the word willingly and widely when they experience good service. In fact, contrary to conventional wisdom, customers are more inclined to talk about a positive experience than complain about a negative one. Three-quarters (75%) are very likely to speak positively about a company after a good service experience in contrast with 59% who are very likely to speak negatively about a company after poor service.

A strong customer service culture is, by far, the most influential thing a company can do to increase customer advocacy. Personal experience, company reputation, and recommendations from family and friends are the strongest factors for considering a product over another.

What happens when consumers go online? Invariably, searches focus on finding the problems, if any, with a service or an organization. The American Express survey confirms, the majority, 57% says they put greater credence in negative reviews on blogs and social networking sites than on positive ones.

People expect that companies are listening. Whether those organizations are active in social media or not, they expect to receive a response. And retaliating for negative reviews is not the way to go. Feedback can help you improve your business.

The biggest impact an organization can have on its bottom line comes from satisfied customers. We choose where we buy and how much we're willing to pay based upon the experience we have dealing with a company.

According to the Harris Interactive survey conducted for RightNow Technologies linked above in my post from last October, 40% of the people began purchasing from a competitive brand simply because of their reputation for great customer service.

There is a silver lining in the RightNow report.

Return on complaints

58% of survey respondents said they would like the company to respond if they left a comment on a social networking site like Facebook or Twitter. The time frame for that response?

• 42% expect a response within a day
• 39% within a week
• 7% within an hour
• 2% within a minute

But only 22% of those who actually did leave a comment on a social networking site got a response. Those organizations that get busy addressing concerns, rather than retaliating, earn a second chance and may gain positive word of mouth from customers.

I'm thinking that one day is a generous margin for timing. Especially in a medium where things move so fast. What happens when your issue needs solving right away? Would addressing the issue while resolution is pending be acceptable?

How many misses does it take you to be done with a business? Have you had good experiences with (legitimate) complaints being addressed?

Consumers are not feeling the love in countries like Australia (71%), Germany (66%), and Canada and Italy (65% each). In those countries consumers say they feel companies haven't increased their focus on service or are paying less attention to it.

Stuff happens. It's how an organization deals with it that makes a difference, especially to the bottom line [graph depicting Average Percentage More That Consumers Are Willing to Spend].

 

[Beth Harte and Anna Barcelos collaborated on this post as members of Conversation Agent customer-centric content advisory board]

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Comments

[Valeria Maltoni]

which is why it's important to focus on the key data point of this post -- doing good by customers is going to be more profitable. The return on complains, it turns out, is quite negative.

[Ryan Stephens]

I wanted to re-visit this since my first comment didn't work, and candidly this probably won't be half as articulate because it's not fresh on the mind. I apologize.

My problem with responding to every Tom, Dick, and Jane that post a complaint online directed a friend as opposed to your brand is that in answering those complaints are the brand's not encouraging that approach?

If every time someone whines you come to the rescue (and this works for guys like Vaynerchuk), aren't we teaching them to expect that response? And is that the best strategy?

What if we had an architecture in place that enabled people to address their complaints to specific parts of a company instead of blasting it to anyone who'll listen. YES - it's powerful to convert someone that way, but are you setting yourself up for failure? Is it *really* scalable? Maybe, but I'm unconvinced it's the best approach.

[Valeria Maltoni]

maybe online? Offline, people tend to cut to the chase. Want to know who is the go to mechanic? Here's the name of one who will not let you down, etc.