Dealing with Customer Complaints

By September 15, 2020 No Comments

The novel coronavirus (COVID-19) has resulted in major changes to the way Australian businesses operate – and, in many cases, major disruptions to their customers. The Australian Competition and Consumer Commission (ACCC) reports that the greatest negative impacts have been on businesses selling travel, accommodation and food/fitness subscription services which, due to lockdown requirements, cannot be delivered as promised.[1] However, there are also a variety of other businesses, large and small, and their customers, who continue to be negatively impacted by the COVID-19 situation.

The situation is further complicated by the fact that Australia has entered its first recession – or period of economic downturn – in nearly three decades.[2] People now have lower levels of disposable income – and, so, reduced purchasing power – than at any other time in the recent past. They may be unable to afford purchases they have committed to. Businesses are also ‘feeling the pinch’ and must work harder to attract and maintain customers.

In Australia, complaints from customers to state/territory Fair Trading regulators have increased significantly since the beginning of the COVID-19 crisis.[3] Research shows that the most common reasons that a customer will complain about a business are because:4

  • The business fails to keep the promise it made to the customer
  • The customer perceives that poor customer services has been provided
  • The customer is transferred too many times between departments
  • The business’ staff have been rude to the customer
  • The customer has had difficulties communicating with customer service personnel
  • The business makes changes to agreements it made with the customer 

Customer dissatisfaction – particularly when complaints are poorly-handled – can have significant commercial impacts on a business. For example, research shows that:[4]

  • 56% of dissatisfied customers will not purchase from the business again
  • 40% will tell family/friends about their poor experience with the business
  • 25% will recommend to family/friends to avoid using the business
  • 20% will post a negative online review about the business
  • 14% will share a poor experience about the business on social media

Bear in mind that for every complaint your businesses receives, there are likely to be many more customers who are also dissatisfied but who have not taken the time to complain.[5]

Frustration is at an all time high!

Managing a complaint

It is essential, therefore, that you are able to deal effectively with customer complaints. In fact, well-managed customer complaints can be good for your business.[6] They are an opportunity to retain, and to build a strong and enduring relationship, with a customer. They also provide valuable information you can utilise to improve your business.

As a person who works regularly with customers, you are likely to already have quite well-developed customer complaints-handling skills. The basic complaints-handling process involves: (1) genuinely listening to the customer to understand their problem, (2) working with the customer to identify solutions to the problem, then (3) negotiating, and implementing, the solution which is best suits the customer and your business. Use the understandings you gain in this process to change and enhance your business.

Consider these additional strategies for dealing with customer complaints during COVID-19:

  • Remember that a customer who is making a complaint may be experiencing significant external stress. A study conducted with nearly 14,000 Australians in April/May 2020 showed that mental health problems – specifically: anxiety and depression – are “at least twice as prevalent as in non-pandemic circumstances”.[7] Empathise with the customer using statements such as, “We understand this is a stressful situation for you…” or, “We know this has caused you disruption…”
  • Make a genuine apology to the customer. If appropriate, also explain the cause of the situation – for example: “We have been overwhelmed by orders of this product…”
  • Ensure you understand your business’ obligations with regards to guarantees, warranties and refunds on products/services under the Australian Consumer Law and, more broadly, the Competition and Consumer Act 2010, and how these have been impacted by the extraordinary circumstances bought about by COVID-19. Ensure your response to a customer’s complaint fulfills these obligations
  • If social distancing laws are in place, people are likely to make a complaint online. Consider how to respond appropriately to online complaints – for example: protect the customer’s right to privacy and do not discuss the matter on public forums. Remember that whatever you post online is permanently recorded
  • Develop a clear complaints handling policy, so that different staff members involved in handling a complaint – who may also be working from home and, so, distantly to each other – are able to deal with the customer in a consistent way

COVID-19 has caused significant disruption to businesses and their customers and, so, an increase in customer complaints. However, if they are handled correctly, complaints provide a business with an important opportunity to retain customers and improve service delivery.

EYF Online PD has a range of online courses to help you deal with customer complaints. To find a course which suits your interests and needs, enquire or enrol, click HERE.