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Companies “must do more in the wake of a negative experience”

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17th Aug 2014
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Leading customer engagement specialist The Grass Roots Group has issued a warning to businesses failing to deal with the rising number of customer complaints in the UK.

Ofcom recorded an increase in complaint levels in Q1 of 2014, with the finance and telecoms sectors receiving record complaint numbers in 2013 (almost 15,000 complaints were made to the FCA every day last year, in relation to financial services organisations).

The Grass Roots Group believes that while the volume of complaints is concerning, a far greater issue is that so many businesses are failing to handle their responses to these complaints in the timely and effective manner customers have now come to expect.

It state that the prevalence of social media has meant negative interactions with a business are now spreading to twice as many people as positive ones, and that a massive 65% of us now rely on Twitter to get in touch with companies rather than going through a call centre.

This public and immediate way of complaining is thought to be extremely damaging for those companies who don’t react in the right way, and can "result in them losing existing customers as well as alienating new ones".

Figures have shown that reducing customer defection rates by just 5% can increase profits by between 5% and 95% making it all the more important to respond to unhappy customers at the right time and in the right way. Responding with the right gesture has been found to increase customer retention rates to a massive 70%.

“A simple and timely gesture can mean the difference between a customer sticking with you and singing your praises, or shouting about their bad experience all over social media where it will spread like wildfire,” says Vikki Zelkin, head of client services, promotions and incentives at The Grass Roots Group.

“The first step is to resolve the issue as quickly as possible, following up with a timely and unexpected gift to show that you value your customers, making them think twice about taking their business elsewhere.” 

“However, it’s not just those who shout the loudest that could be damaging for a business. For every person that does complain, there are 26 who stay silent choosing to show their dissatisfaction by defecting to a competitor. Businesses therefore need to ensure they are not only responding to the vocal minority but the silent majority.”

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By Julian Sammells
20th Aug 2014 13:47

There are some really powerful statistics here Chris, and demonstrate the importance of customer service to the bottom line. It is a fact of life that unfortunately sometimes things do go wrong, but in these cases apologising and fixing the problem quickly can actually reinforce customer retention as they feel they have been heard and helped. How O2 dealt with a network outage a few years ago is the perfect example – more in this Eptica blog post on the topic at http://eptica.wordpress.com/2012/07/18/dealing-with-rude-customers-lesso...

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