The Impact of the Customer Complaining Paradox on a Company's Bottom Line
Consumer behavior is hugely impacted by complaining psychology. When customers
are dissatisfied with certain products and have the urge to complain, a staggering 95 percent fail to do so. Why? Because they fear the complaining process will require too much time and effort to be worth their while. However, the same people will then spend considerable amounts of time and effort relaying their complaint to friends and acquaintances.
As a result of this complaining paradox, companies lose customers without ever knowing they've encountered a problem and without being given a chance to rectify the situation via service recovery efforts. Complaining customers then defect to the competition and spread negative word-of-mouth about the company while doing so.
On the other hand, customers who do complain, and whose complaints are resolved to their satisfaction, will both spread positive word-of-mouth about the company and exhibit higher customer loyalty. Therefore, making it easy for customers to complain and having excellent complaint-handling procedures can make a huge difference to a company's bottom line.
Most companies make their contact information available to consumers, but the complaining paradox makes such efforts insufficient. Because customers remain unaware the complaining paradox exists (let alone that it governs their behavior to the extent it does), companies have to go the extra mile to elicit customer complaints by doing the following:
1. Increase prominence of contact information. Doing so provides customers with up-front psychological assurance that should they run into a problem they'll be able to contact the company easily.
2. Use purchase confirmation notices. Use such notices to remind customers to contact you if they encounter a problem.
3. Redesign invoices. Clear and simple instructions about what to do if there's a problem should appear prominently on the first page of the invoice. Otherwise, direct customers to a specific attachment.
4. Send follow-ups. Just as waiters check on diners shortly after serving their meal, check in with your customers shortly after their orders arrive to see if everything was to their satisfaction and offer them an easy way to communicate with you if not.
5. Only set expectations you can meet. Nothing irritates customers more than to be placed on hold for extended periods while automated messages reassure them their time is valuable to you. Only companies with excellent complaint-handling procedures should inform customers that communicating with the company will be hassle free.
All the above strategies depend on a company's customer relationship management systems and complaint handling procedures’ ability to deliver on these promises. Companies that invest in improving their complaint-handling systems and procedures will benefit from great returns on their investment. Minimizing the effect of the complaining paradox will reduce customer attrition, improve customer loyalty and provide great word-of-mouth.
Guy Winch, Ph.D. is a licensed psychologist and author of the new book "THE SQUEAKY WHEEL: Complaining the Right Way to Get Results." Guy can be reached on Twitter @GuyWinch or via his website.
