Wednesday, February 21, 2007

Customers customers customers...

  • Most dissatisfied customers do not complain to us – probably only 4-5 percent bother. One estimate is that for every single customer who brings us a complaint, another 26 probably also have problems. Six of which are like to be serious, and do not complain to us. The silent majority defect to a competitor, or put up with us being bad and defect.
  • Dissatisfied customers tell everyone except us. In consumer markets the estimate is that the disgruntled customer tells about 14 others.
  • Dissatisfied customers buy less – and seem to do their best to get other to buy less as well
  • Typically the cost of complaint resolution is 10-25 percent of the cost of finding a new customer
  • When complaints are resolved satisfactorily these customers tend to be more than those who never experienced a problem in the first place.

But why do so many customers not complain:

  • They did not think it would make any difference
  • They did not think it was worth their time and effort
  • They did not know what they had to do to get help
  • They never got round to it


Share your examples when such dissatisfaction occurred in your life and you complained (or didn't complain) and what was the result of the same?

Hoping to hear from you all GLOBAL visitors...


References:
Doyle, Peter (2002), Marketing Management and Strategy, 3rd Ed., Hamel Hempstead: FT – Prentice Hall.
Walther, George, R. (1194), Upside-down marketing, New York: McGraw Hill.
Barley, Peter (1994), ‘Looking for Trouble’, Marketing Business, September, pp. 21-24.


4 comments:

Jules said...

Do we encourage complaints? The organisation I work for actively encourages it's customers to complain. We have a 'comments' form that allows both compliments and complaints to be acknowedged and responded to in adherence to a strict process, i.e. acknowledgement of a complaint within 48 hours and full response issued to the customer following investigation within 10 days. Other than showing our customers that we care about their issues, complaints are viewed by my organisation as a rich source of feedback, and provides the opportunity to improve services. I am not familiar with other organisations processes for dealing with complaints - are they similar? Are we doing it right?

Dr. Paurav Shukla said...

I must say the process you have explained is quite impressive. The organization really seems geared towards what we called 'customer orientation'. I have observed a few companies which really take complaints seriously.

Few of the organizations (they did call themselves customer oriented or customer focused) I have worked with had a very different approach with complaints handling. Many a times it made customers afraid that the organization would take revenge and provide further bad service.

The major problems as I saw in those organization was:
1. Senior management mindset towards customer feedback
2. Myopic visions
3. Employee lacking empathy or training in how to deal with the phenomenon positively (we know how hard it is to digest negative feedback).
4. System integration

Let's see what others have to say about this...

Share your experiences.

Jenniflea said...

When a company's service has been particularly poor, where staff are generally incompetent, or when I've been let down a number of times, then I disengage from the organisation completely, and I don't complain at all because, frankly, I think they don't deserve my valuable feedback. I simply take my business elsewhere.

Shlok said...

I think this article is related to your previous articles "5 Killer myths of business". This would be the sixth myth. The crux is customers are nobody's . We usually tend to assume that the customers are with us and they are satisfied by our products and services. Maybe we do not know what's going on the background and no customer would tell us. The right technique is to be updated on a period basis will total involvement right from the sales rep level to the top executive.

A healthy relationship with customers negate the churn effect. This is interesting because you are not increasing your costs but just taking feedback on regular basis. The customer feels you really care!