Sales and Marketing

Dealing with Customer Complaints

CommunityTeam — Wed, 03 Jun 2009 16:49:00 GMT

Here are some tips on how to deal with unhappy customers and where to draw the line in resolving their problems

By Christopher Freeburn

Small business owners understand the necessity of attracting customers to their business. But keeping those customers happy and coming back means more than just offering good products and services at reasonable prices. It means properly dealing with the inevitable complaints from customers who have a problem with your company's products or services, or with the way in which they were delivered.

Knowing how to properly resolve customer complaints is crucial. According to a recent study by the Technical Assistance Research Programs Institute, 91 percent of customers who have an unsatisfactory experience at a business while making an expensive purchase will not do business with that company again. And even when the item purchased was inexpensive, the study found that more than half of the customers surveyed indicated that they would shop elsewhere after an unresolved complaint.

In most cases, losing a customer over a complaint is unnecessary, says John Tschohl, president of the Service Quality Institute. "Nine times out of ten, just a little bit of effort by the business to address the customer's complaint would have soothed the situation and probably kept the customer coming back." Indeed, if your business handles the situation properly, not only can a customer's dissatisfaction be remedied, but you can also build additional loyalty to your business. "If a customer sees that your business is responsive to his or her problems, they are actually more likely to come back to your for additional purchases, since they know that they can count on your to help them through any future issues," Tschohl adds. Not only does this make for repeat individual customers, but it can help spread a positive image of your company through word of mouth, since satisfied customers ar

Steps to address complaints

Listen carefully. "The most important thing in handling a customer complaint is making sure that the customer feels that he or she is being heard," says Tschohl. Nothing increases customer anger more than the impression that the company doesn't care. "Whether it's the business owner himself or a salesman or representative talking with the customer, it's important to make sure the customer knows that someone is listening." Tschohl advises empathizing with the customer and reassuring him or her about the importance of their complaint and your desire for continued business.

"When customers feel that their complaints have fallen on deaf ears, they will probably take their business elsewhere in the future," says Tschohl. "Worse for your business, they are very likely to tell their friends and family about the experience," he adds. A disgruntled customer can spread his or her dissatisfaction by word of mouth in a way that can turn a potentially large number of prospective customers away from your business. If your business happens to be in a small town, this effect can be magnified, since small communities have limited customer bases.

Admit any errors on your part. Even the best companies sometimes make mistakes and even small errors can irritate customers who were counting on you to deliver the right goods or services on time. If your company did indeed make a mistake, the best thing you can do, Tschohl says, is to admit the error and work toward correcting it. If the wrong product was sent to the customer, for instance, ship them the correct product without charge. If you can't correct the error itself, offer some form of compensation for the customer's lost time or inconvenience.

Apologize. "Say your sorry that they've had a bad experience and that you want to make things right. Just saying you're sorry-even if you admit no blame-goes a long way toward cooling off someone who's upset," Tschohl notes. Customers want some acknowledgement of their distress, and in some cases Tschohl says that just providing that acknowledgement may be enough, even if there is nothing else you can do for the customer.

Offer solutions. In most cases, customer complaints can be resolved by offering something small like a discount on future purchases, or by granting a refund. "It's better to lose some money settling a customer complaint than to lose additional business," Tschohl says, "because 87 percent of angry customers will tell their friends about what happened, and that could cost you a lot more in potential business."

Follow up. Once you have reached a solution with the customer, be sure to follow up after a little time has passed. Not only does this allow you to see if the complaint has been fully addressed, but it reinforces the customer's impression that your company really does care about keeping their business. That will go a long way toward moving your company's relationship with that customer beyond the problem and toward future purchases.

Fighting For Sales

SBOCTeam — Tue, 15 Jan 2008 15:57:00 GMT

Did last year's sales lag behind your projections? Here is some solid advice to get you going in 2008

BY MICHAELA CAVALLARO

When Jennifer Younge joined New York City marketing communication and design firm Ross, Culbert & Lavery Inc. in late 2001, the company had a long established method of drumming up sales: It sent prospects a portfolio of work it had done for other clients. The message, says Younge, was simple: "Look what we did for this company; we can do something even better for you." That method worked well when the economy was humming. But in the downturn after Sept. 11, the portfolios lost their magic. In part, Younge says, that's because the approach was essentially passive. "Once a potential client has the package in their hand," she says, "they have no reason to meet with you." The downturn was obviously bad news for the newly hired Younge, not to mention the company's owners and staff. Desperate for a more active way of engaging prospects, Younge began cold calling the professional services firms that were Ross, Culbert & Lavery's target. The problem? "I had no clue what I was doing," Younge says, laughing.

That's where Wendy Weiss came in. Weiss, a New York sales trainer who specializes in what she prefers to describe as "introductory" calling, bills herself as the Queen of Cold Calling. "Most people know how to talk on the phone to friends, but they don't know how to get a perfect stranger's attention on the telephone," she says. "Selling is a very specific communication skill. The more skilled you are, the better your results will be." Younge worked with Weiss to construct a new strategy for contacting potential customers. Younge now uses cold calls to set appointments for introductory meetings, and she's made a crucial mental shift: Rather than assuming that she's interrupting or bothering prospects, Younge acts and speaks as though she's helping them do their jobs better. "Even if they don't hire us, it's still in their best interest to know what's going on in the marketplace and what their competitors are doing," she says. "People pick up on that authority and confidence in my voice and conclude that they want to hear what I have to say." The result?
Today, the majority of the firm's clients come from Younge's cold calls a vast improvement over the send a portfolio and cross your fingers days. More efficient cold calls are only one way to drive sales and boost a company's bottom line. We asked sales experts both consultants and entrepreneurs to tell us what they've learned about how to approach sales. Here's what they told us:

Believe in what you're selling.
Many entrepreneurs worry that they will come across as a stereotypically pushy salesman who won't take no for an answer. But, says Weiss, "If you've got that in your head, you've got to get it out, because it's going to make you ineffective."
Take a cue from Younge and shift your mental picture:
Rather than worrying that you're manipulating people or asking them to do something they don't want to, consider the ways in which your product or service will help them, professionally or personally.
Don't try to be everything to everyone.
Many small business owners are reluctant to define their best customers, or their most profitable markets, for fear of turning away paying customers. But it's difficult to focus your sales effort if you don't define your market. Ardath Albee founded Einsof, a small Minneapolis firm that develops online marketing and sales portals, in 2000. Albee believed she needed to define the industries Einsof served but she was afraid to rule any industries out. As a result, the company's sales effort was haphazard and unfocused. In addition, turnover among the sales staff was high, meaning that Albee had to devote more of her already scarce time to hiring and to managing existing customers' accounts during the transitions. Those results were ironic, considering that the firm aims to help clients improve their own marketing and sales efforts. More recently, Albee has come to realize that the defining factor in choosing her clients should be a potential client's needs, which might not be determined by its industry. A solid prospect, she says, posts annual revenues of $80 million to $100 million, has already worked with a Web developer, has a functional website, and needs a better website that enables two way communication with customers. Of course, defining the market in this fashion makes sales reps' jobs initially a little harder than, say, simply calling all of the health care companies in the Yellow Pages. There is no directory of firms pondering a move from static to interactive websites. Still, the extra work is worth it. "We've closed far more clients so far this year than we have in any other year," Albee says.
Hire sales reps that fit your business model, are confident, and love to sell.
For Albee, defining her best prospects also helped clarify the characteristics required of a successful Einsof sales person: "We need sales reps that can call in at the VP and director of sales level," she says. "They have to be self starters. We need people who can organize themselves, work a network, and get themselves in the door." As Albee's example attests, your sales reps may need skills specific to your industry or your company's mission. Beyond that, successful sales people share self confidence and a positive outlook. "Passion is the single hardest thing to teach," says Bob Waks, president of The Training Center for Sales & Business Development in Lafayette Hill, Pennsylvania. "If a rep doesn't have that desire to sell, they're unlikely to develop it within your company or in a class."
Develop a sales methodology.
For many companies, this means starting with your goal and working backwards. Let's say you want to produce $1 million in annual sales. You will need to know how much revenue a typical contract brings in. If that typical contract is $50,000, then you need to sign 20 contracts a year, or roughly one every two and a half weeks. You'll also want to build in room for error, in case a client unexpectedly goes under or the economy goes into a tailspin. Let's say you typically have to meet with five qualified prospects in order to get one signed contract. Now you know that you'll need to have 100 meetings (five prospects multiplied by 20 contracts) over the course of the year, or about two a week. And if you usually have to talk to six prospects in order to get one that's qualified, that means you need to have 600 conversations a year, or about 11 a week, in order to keep your pipeline filled. "This is the stuff nobody wants to talk about," says Waks. "But it's the discipline you need."
Don't discount the power of referrals.
"A prospect who comes to you by referral or recommendation from somebody who knows you is infinitely more likely to actually become your customer than someone who comes to you from any other source," says CJ Hayden, whose San Francisco firm, Wings Business Coaching, specializes in sales and marketing strategy. That doesn't mean you have to sit around waiting for referrals to roll in; quite the contrary. Hayden recommends actively building word of mouth about your business by networking with other business people who are likely to know when someone needs your product or service. One of Hayden's clients was able to use this technique as she started a graphic design firm whose primary target was other startups. The designer thought systematically about what other professional services startups need attorneys, printers, accountants, bankers, and so on and set about getting to know competent and reputable people in those categories. She started with the professionals she knew and trusted, then asked friends and colleagues for the names of professionals they would recommend. Ideally, she would ask the professionals to refer clients to her, and if she felt comfortable doing so she would agree to do the same for them. In the end, the exercise helped the designer get her business off the ground and develop her own sales process. "Now my client knew where to network, who to approach, and how to go about prospecting," Hayden says.
Remember the value of the personal touch.
Ralph Roberts, a real estate broker in Warren, Michigan, is the author of Walk Like a Giant, Sell +Like a Madman and 52 Weeks of Sales Success. He's a firm believer in the shotgun approach: Make sure everyone you meet knows what you do, and pass your business cards out everywhere you go. "If you're out to eat, leave a card for the waiter along with the tip and a note that says, ‘Thanks for the food and great service,'" Roberts says, joking that if the meal was lousy, you can just leave the card. Roberts also swears by handwritten thank you notes, which he sends after hearing from a prospect by phone or in person, and he is all for gimmicky tactics like buying a box of old 45s and sending them to clients with a handwritten note that incorporates the title of the song. "It suits my personality," he says. You'll want to come up with your own gimmicks, of course. A good rule of thumb: If you wouldn't feel comfortable using a particular sales tactic on a friend, then find another way to approach your clients.
Don't overemphasize closing...
"The sale does not begin at the end, when you're asking for the business," says Hayden. "It begins back at the beginning, when you first interact with the client." Hayden doesn't advocate the "always be closing" style of sales made famous in movies like Glengarry Glen Ross. Instead, she and other experts favor a more consultative approach that involves asking potential clients lots of questions about their needs. "All the focus should be on the client and his or her problem," says Bob Waks. In practice, that means you first need to be sure that you're talking to a person authorized to make a decision about buying your product or service. Your conversations should focus on gaining a thorough understanding of exactly what the potential client's problem is. You also need to determine, fairly early on, whether the prospect's firm has the funds available to invest in a solution. "By the time you get to the point where you would normally make a big presentation, the sale should pretty much be done," Waks says.
...but don't forget to come right out and ask for the sale.
You can forgo the contract signing ceremony with the fancy pens but at some point you do need to get your prospect's commitment to doing business together. "When you think the time has come, you might want to summarize where you are and see if that's where the other person thinks they are, too," says CJ Hayden. Whatever response you get from your prospects is fine, because it gives you information. If they want to see more samples of your work, provide them. If they're ready to do business with you, then go ahead and get to work.

The David and Goliath Approach

Small companies often gaze wistfully at the names on the Fortune 500 list, pondering how great it would be to get a piece of that business. Yet most small companies never even try to fulfill that dream and that's a mistake, according to Jill Konrath, founder of St. Paul, Minnesota based SellingtoBigCompanies.com. That said, getting in the door at a multibillion dollar corporation isn't easy and it may require tactics different from those you use to sell to small firms. Here are a few of Konrath's tips for breaking into the big time:
Be persistent. Getting through to corporate decision makers takes multiple attempts. Most people, says Konrath, give up after five tries, but it's not at all uncommon that you'll need to make contact likely via a combination of phone, e-mail and snail mail 10 or more times before you get a response.
Think small. Don't necessarily start with the corporate purchasing office. "The best way to get into the corporate market is get a client in a department of a division of a business unit of the enterprise," Konrath says. Finding the right person will take some work, but your prospect may have a bit more time to entertain your pitch than her counterpart in the corporate office.
Still, understand that the biggest obstacle to your success is the status quo. "Corporate decision makers are so busy that the mere thought of change is painful," says Konrath. "They will stay with vendors or systems that aren't perfect just so they don't have to change." That means your sales message should spell out in precise and appealing terms the business results you can provide. For example, when pitching her own services to a corporate client, Konrath's message is "I help companies shorten time to revenue on new product introductions" rather than "I do sales training."
Spin your company's size as an asset rather than a liability. This can be as simple as pointing out that your firm's low overhead makes your prices more reasonable. It might also be worth noting that since the contract would represent a significant portion of your annual revenue, you will have the incentive to provide top notch customer service.

Michaela Cavallaro is a freelance writer whose work has appeared in Down East, Mainebiz, and the Industry Standard's Grok Newsletter.

Keep the Customer Satisfied

CommunityTeam — Thu, 20 Sep 2007 23:05:00 GMT

The latest management theories all support one basic conclusion: Happy customers come back.
By Chris Freeburn

It's a truism that keeping customers happy keeps customers coming back. But what are the best ways to maintain customer satisfaction, beyond providing the best product or service you can? How can small businesses maximize customer satisfaction and translate that into repeat business and good word of mouth?

According to John Tschohl, president of the Service Quality Institute, "Ninety-five percent of all business owners believe that their companies are exceeding customer expectations in terms of service." That, Tschohl says, is far from the truth. Indeed, lousy service and poor communication ranks as one of the top consumer complaints, he adds. In a competitive economy, becoming a customer service leader is one of the least expensive ways of improving performance. In fact, in today's highly competitive business environment, Tschohl calls good customer service "a matter of survival."

For Abacus Plumbing, based in Houston, Texas, customer service has become a driving focus. According to company vice president Alan O'Neill, Abacus incorporates customer service into every aspect of its business, focusing heavily on training and customer feedback. "Our motto is: do what you say you are going to do, when you say that you're going to do it," O'Neill says. In addition to training all new employees to be responsive to customer needs, Abacus maintains constant communication with the customer during every stage of the sales process. This includes calling the customer before and after sales and servicing calls to gather the customer's feeling about the experience. This attention to customer service resulted in Abacus receiving a Houston Better Business Bureau's 2006 excellence award.

The First Step
Tschohl emphasizes that the first step in improving customer service is understanding how critical it is to your business. "Small business owners are much worse than large business when it comes to addressing customer concerns," Tschohl says. "Too many operate under the idea that there are an infinite number of customers and if someone doesn't like how they run their business, too bad." This is a serious error, he says. "If you want to take your small business and become a big, profitable company, you need customers to be satisfied. You need them to keep coming back, and you need them to tell their friends about your business."

Coupled with this is the problem that few small business owners understand how customers actually experience doing business with their company. "Most business owners have no idea how their customers see them. They don't know what it's like to do business with their own company, because that's not a situation they've ever observed first hand."

This lack of understanding can lead business owners to misjudge the efficacy of their own sales and customer care practices. Tschohl recommends asking your customers directly about their experience with your business. "Sit down and ask them about their experience," Tschohl advises. "Don't wait for a complaint. Ask them for suggestions on how you could do things better. Or what they don't like. Talking directly to your customers is the fastest and cheapest way to gauge how your company is doing customer service-wise. Customer surveys are effective. He also advises providing a means for customers to give feedback at the time of purchase. "A little card at the sales desk, or a postage paid postcard that arrives with a delivery," he suggests. "Anything that lets your customers let you know how they feel right away."

Handling Complaints
Dealing with dissatisfied customers is one of the most important and delicate interactions a business faces. "Ninety-one percent of unhappy customers who made a big purchase will never come back," Tschohl warns, citing a study by the Technical Assistance Research Programs Institute. But even among small-item purchasers, 63 percent will go elsewhere if they feel dissatisfied with their experience, Tschohl adds. This can have a dramatic impact on a business's bottom line. Tschohl cites research indicating that reducing non-returning, dissatisfied customers by just five percent can double a company's profits.

"The most important thing in handling a customer complaint," Tschohl says, "is making sure that the customer feels that he or she is being heard." Nothing increases customer anger more than the impression that the company doesn't care. "Whether it's the business owner himself or a salesman or representative talking with the customer, it's important to make sure the customer knows that someone is listening." Tschohl advises empathizing with the customer and reassuring him or her about the importance of their complaint and their continued business with the company.

"Suggest alternatives," Tschohl says. "Provide a variety of options for resolving the complaint." He also suggests apologizing to the customer in a way that doesn't blame anyone for the problem. "Say your sorry that they've had a bad experience and that you want to make things right. Just saying you're sorry-even if you admit no blame-goes a long way toward cooling off someone who's upset." Shifting the blame elsewhere won't work and may only further antagonize the customer.

Finally, come to some resolution. "It's better to lose some money settling a customer complaint than to lose additional business," Tschohl says, "because 87 percent of angry customers will tell their friends about what happened, and that could cost you a lot more in potential business."

Recovering From Mistakes
No company gets it right all the time. Mistakes happen. A customer gets sent the wrong order. Errors occur in billing. Two clients are accidentally booked for the same time slot. Preventing errors is an important task for any company, but dealing with mistakes is equally critical, says customer service consultant Peggy Morrow, principal at Peggy Morrow & Associates.

"How you handle a mistake will directly determine whether you ever see that customer again," Morrow says. "Most customers are perfectly willing to overlook a mistake on your part so long as they feel you've truly apologized for the error and offered them something in return." Compensating the customer for a perceived loss-their time or convenience, for example-goes a long way to smoothing ruffled feathers, Morrow says.

"Always offer the customer choices," Morrow says. Depending on the context of the mistake, that can be anything from a discount on future purchases, a full refund, a service upgrade, or a preferred change in scheduling. "Angry customers usually feel a loss of control. By giving them a range of options to make up for the error, you are putting them back in control of the situation," she advises. That will mitigate any annoyance the customer feels over the mistake and leave the impression that your company greatly values its customers.

Customer Relationship Management
Business experts have transformed the basic art of customer service into a management strategy in the form of Customer Relationship Management (CRM). In the 1990's CRM became a buzzword in business management, spawning a legion of CRM experts and software applications meant to automate the CRM process for companies. CRM specialists have defined the entire sales process as critical to maintaining customer loyalty and satisfaction. "Implementing a CRM strategy begins with planning your business operations based on customer desires rather than on predetermined business goals," says Bob Thompson, president of CRMguru.com. "The idea is that for your business to succeed, it must be customer-centric. That means that every aspect of your business should be concerned with ensuring the satisfaction of your customers all the way through their interaction with your company."

Opening an informed dialogue with your customers is a critical element in constructing a functional CRM strategy, Thompson says. "Listening to what your customers have to say about their experience and about what they want to see your company do is the bedrock on which you begin to mold a CRM plan for your business."

Once you have determined what your customers want from your company, you must evaluate every aspect of your organization to determine how each department works toward satisfying those goals, Thompson says. And you must be prepared to reshape operations to fit the CRM strategy. "This can mean retraining employees or altering major parts of the business structure," Thompson says, "but it is crucial if the CRM strategy is to succeed. Thompson strongly recommends retaining a CRM consultant to assist with designing and implementing a CRM strategy for your business. "Experience in implementing CRM concepts is essential to effectively reorganizing a business," he says.

A wide variety of CRM software applications exist to help companies collect, analyze, and manage data about their customers and the effectiveness of their CRM strategy. But Thompson warns that too many companies simply purchase the software without implementing a company wide CRM strategy first. "Much of the disappointment with CRM software comes from company's that didn't do the organizational preparation first," he explains.

But choosing the right CRM software for your business is also critical. The variety of CRM software applications, designed to work with virtually any sized business, can bewilder the small business owner. Thompson suggests working with a CRM consultant to select the software that best fits your business's structure and needs. "The key is not to make the mistake a lot of companies did early on," Thompson adds, "which was to see the software as the heart of CRM. It's not. Software can give you valuable information on your company's performance with customers, but the key to successful CRM is developing a strategy based on input from your customers and then tailoring your business to meet those needs. Buying software is secondary to having the right strategy to begin with."

CRM meets CEM
According to Thompson, if CRM was the buzzword of the '90s, a new term, "customer experience management" (CEM), is the favored catchphrase among business management professionals in the 21st century. Whereas CRM focuses on maintaining the relationship between businesses and their customers, CEM focuses solely on mapping, analyzing, and improving the customer's experience with the business. "The ideal of CEM's proponents," Thompson explains, "is to turn a company's products into desirable experiences." He cites Apple's iPod and Starbucks coffee as examples of products that have been effectively transformed into something more than a mere MP3 player or overpriced cup of coffee. "People buy these products-at a premium-not just for the item itself, but for the experience of having it."

According to Thompson, CEM should be part of CRM, but often isn't. The critical difference is that CRM focuses on a customer's value to the business, while CEM identifies the business's value to the customer. CRM is functional, while CEM is emotional, Thompson says. They are closely related, but subtly different, he adds, noting that 80 percent of CEM practices mirror CRM strategies. Still, Thompson cites a recent study conducted by his group that found that only 22 percent of customers thought that companies provide a "an excellent customer experience," and another study revealed that companies that scored higher in implementation of CEM strategies had markedly higher profit growth.

Training Employees to Aid Customer Happiness
Whether you decide to implement a comprehensive CRM or CEM strategy, or simply take steps to improve your company's interaction with customers, customer service experts agree that the most effective thing you can do is to make sure your employees reflect this goal.

Keith Kirk, owner of St. Paul, Minnesota-based Greener Pastures and Seasonal Lighting, discovered the financial benefits of training his 22 employees in customer service. Facing slowing sales and high office costs he instituted a customer service training program for all employees at his company. When his first group of salespeople didn't respond as well as he hoped, he fired them and recruited a new team. "You have to find people who are willing to go the extra mile to take care of customers," Kirk says, adding, "not everyone's cut out for that." Kirk says that the better trained staff handle much more work and keep many more customers coming back.

"Creating a customer service-oriented culture within your business is extremely important," Peggy Morrow advises. "Share the results of customer feedback and surveys with your employees so that they can see how customers are responding," she suggests, "and cultivate a sense of group responsibility for performance."

Morrow also suggests rewarding employees who "go the extra mile" to make customers happy. Such rewards can take the form of a bonus, or an extra vacation day, or even a plaque or mention in a company newsletter. "It's also important to be very clear about the way employees are to treat and interact with customers," she says, "but employees need to have enough flexibility when dealing with a customer-especially a dissatisfied customer-that they can handle a customer complaint without frustrating the customer any more."

Finally, Morrow notes that there are some people who are simply not suited to interacting with customers. "No amount of training or company culture will overcome this," she says. "If you have an employee who does not show any desire or motivation to please customers, it is better to remove that employee," she adds, noting that a surprising number of companies tolerate customer service representatives who show disinterest toward customers. "It certainly doesn't win them any new business," she says.

TIPS FOR IMPROVING CUSTOMER SERVICE

Make customer service a focus from the top down. Don't just rely on your sales people or customer representatives. Senior managers and company owners must be just as focused. Lead by example.

Hire carefully. Not everyone is temperamentally suited for dealing with customers. Make sure the people you hire are capable of dealing with upset customers without losing their cool. Remove any employees who are inattentive to customer needs.

Train your employees. Make sure your employees know your customer service goals and have been fully trained in how to handle dissatisfied customers. All company policies for dealing with customer issues should be clearly stated and understood by employees. Your employees must understand how important customer service is to the company's success.

Know your customers. Talk directly with your customers about their experience dealing with your firm. Find out who they are and what you can do to improve their experience with your company. Provide methods for them to leave feedback.

Communicate feedback to your employees. Customer responses should be distributed among your employees, so that they can understand the customers' experience. Deal with complaints quickly. Customer dissatisfaction will only grow the longer it takes you to respond to a complaint. A fast response, and a willingness to work with the customer, can turn an upset customer into a repeat customer.

Chris Freeburn is an associate editor/writer for Business 24/7 magazine.