Complaint management: Why you should clearly take customer feedback seriously

Did you know that customers accept mistakes made by a company at a much higher rate if their previous customer service experience with that company was positive? We will show you what an important role service marketing and complaint management play in customer communication.

Key points:

• Complaint management is the systematic handling of customer feedback by customer service.
• Customers will overlook a mistake more readily if they previously had a good customer service experience with the company.
• A fully integrated customer feedback tool is recommended to make complaint management as efficient as possible.

What is complaint management?

No matter how good your products and services are – there will always be customers who have legitimate issues with your company or things to complain about.

If you do not want to compromise their satisfaction with your company and their loyalty, you must record and systematically handle these grievances with a customer feedback tool. This process is called complaint management.

Systematic complaint management has many benefits

Incorporating customer feedback into your overall strategy is an essential success factor for long-term customer relationships. Methodical complaint management:

• enhances your image as a customer- and service-oriented company
• promotes the detection of product defects and their elimination
• turns dissatisfied customers into happy customers after they provide feedback, which strengthens customer loyalty
• increases the Net Promoter Score (NPS), in other words, the likelihood that customers will recommend your company to others

Studies show that dealing with customer feedback in customer service as part of a company’s complaint management is essential for the sustainable success of customer relationships.

Respondents to such a survey conducted in 2020 reported that they would excuse a bad service experience with a company only 9% of the time if they rated its customer service as “very bad.” However, if they experienced “very good” customer service, they would overlook a bad experience 74% of the time (Qualtrics, 2020).

Scoring points with service marketing

Given such numbers, it seems reasonable to assume that companies will do anything to take customer feedback seriously and integrate it into the customer journey.

Yet, if you look at the survey conducted by one of the world’s largest technology companies, this concept is put into perspective: Only 53% of people surveyed by Microsoft say they believe their customer feedback has any impact on the company (Microsoft, 2020).

The example of a fictional drugstore shows how not to handle complaint management: A customer complains that a glass cleaner purchased there does not clean his windows properly. The retailer responds with a standard answer and gives the customer a voucher for 5 Euros.

The better approach: Listening to the feedback, seeking a dialogue with the customer, providing product alternatives, recording the customer’s feedback in the CRM system, checking the product quality and improving it if necessary, or removing the product from the market if complaints increase. This approach makes customers feel that they are being heard and taken seriously.

Conclusion: Higher sales as a result of processing customer feedback systematically

To be able to collect and deal with customer feedback systematically, you need a customer feedback tool. Not only does this tool collect existing feedback, but it also enables you as a company to gather valuable information in service marketing with target group-specific customer surveys and interviews.

It is a worthwhile investment: Companies that actively collect customer feedback, analyze and evaluate it can increase their cross-selling and upselling rates by up to 20% (Gartner, 2006).