It's difficult these days to walk into a book store or to attend a seminar without getting bombarded by some message about customer service...whether it's how to develop raving fans, client loyalty or positively outrageous service.

Despite all the books and programs on the subject, however, the reality is that there's still no traffic jam on "the extra mile". Ask anyone to relate an excellent experience he or she has had recently as a customer. Even in an audience of hundreds of people, only a handful will be able to offer an example that's remotely positive.

In his book "The Loyalty Effect", Frederick Reichert contends this is the main reason businesses still lose half of their customers within five years; half their employees within four years; and half their investors within a year.

Like most other problems that at first appear complex, there are only a few fundamental reasons for the service crisis. Our focus here is on lack of training, and one aspect of that problem in particular: handling customer complaints.

Going the Extra Mile

The concept of going the extra mile is especially relevant to handling complaints. Anyone who's ever had to deal with an irate customer knows the job can be just as difficult whether it's done over the phone or in person. Yet there are some very good reasons to make the extra effort, to rewire the usual attitude towards complaining customers (if that's the one you have) so that you not only welcome them, but even seek them out.

It's a Good Defensive Strategy...

You've probably heard that businesses with bad customer service lose 2% market share per year. To give this figure more meaning, consider that most businesses only hear from 4% of their dissatisfied customers. Now turn the statistic on its head: these businesses don't hear from 96% of customers who are unhappy. So get one customer with a gripe, and there's a good chance you're not hearing from another 24!

There are two major problems with this silent majority: first, most of them -- 90% of the 24, or about 22 -- simply won't come back. So you may never find out what the problem was from them; but second, and more importantly, each of these 22 people will tell an average of ten of their friends. The net effect is that you not only lose their business, but potentially that of people they know. In the worse case scenario, if these 22 ex-customers are persuasive enough, they can scare off up to a total of 220 (i.e., 10 X 22) more prospective customers. Even if you can afford to lose the 22, can you afford to lose the other 220 people? Can you afford the bad publicity? If not, you'll probably agree the first reason to handle a customer complaint better is that it's a good defensive strategy.

It's also Part of a Good Offensive Strategy...

In the same way that bad customer service erodes market share, good customer service captures it, to the tune of about 6% more per year! It's not that businesses with good customer service never make mistakes. Rather, it's that they're known for bending over backwards, of going the extra mile, to correct the mistakes that they do make.

And it makes good business sense for them to do so. The numbers tell us that 95% of all complaining customers will do business with you again if you resolve their complaint on the spot. And like "kissing and making up", these customers feel better about you than they did before their complaint. The resulting "loyalty effect" is not just something touchy-feely either. It can be tracked in dollars and cents and, according to author Reichert, can result in increases in top line sales of up to 25%, and of bottom line profits of up to 100%!

So when your business occasionally performs below customer expectations, it can still be perceived as reputable if you have stood behind your guarantees, your promises, etc., and have handled criticism diplomatically. And we should not overlook how handling complaints better, an integral part of delivering excellent customer service, can also grant you a valuable privilege. This is the same privilege earned by industry leaders such as Neiman-Marcus, whose reputation allows them to charge more for the same products and services as companies that aren't as effective with customer complaints.

An Untapped Source of New and Profitable Ideas

The third reason to welcome customer complaints is suggested by Rosabeth Moss Kanter who, in "The Art of Innovation" contends that complaints can be an untapped source of new and profitable ideas:

"That's why the CEO of Procter and Gamble listens to the '800 number'...(where customers call in complaints)... so often. It's from the complaints that you hear where the change is needed. It's from the complaints where you get the new idea for a valuable new product."

Some innovative companies go so far as to recruit complaining customers into focus groups, using the dissatisfaction to brainstorm new products and services that can put these companies more in tune with their market.

A Blessing in Disguise

None of this is to suggest that handling customer complaints is easy. There are, however, many benefits to those who are willing to endure the wrath of an angry customer:

1. It's a good defensive strategy to help reduce customer fallout and loss of market share;

2. It's a good offensive strategy to help increase your market share, top line sales and bottom line profits;

3. It can serve as a valuable source of new ideas and products.

So consider the next customer complaint you get for what it really is: a blessing in disguise and a second chance for you to make your business more profitable!

WIN at Work Seminars is a training company that provides safety programs for companies who want to keep their employees safe and productive in the workplace. You can reach us at 800-391-4950 for more seminar information or at WINatWork@aol.com to subscribe to our free on-line newsletter.

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Copyright 2000 by Rich Bianchi & Samantha Koumanelis. Used with permission.