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TGR Exclusive: Why Customer Complaints are a "Good Problem"

One of our favorite sayings here at Zingerman's is, "Success means getting better problems." You see, we don't believe in a world with no problems. There's always something that isn't perfect or that could be going better. But some problems are definitely better than others. For example: "More customers than you can keep up with" and "Not enough customers to meet your sales goals" are both problems. And most business people would have no trouble picking "too many customers" as the better problem. Likewise, most would agree that getting lots of complaints is a problem. But would they agree that not getting any complaints is also a problem? In fact, I think—of the two—lots of complaints is a better problem than not getting any.

First, let me clarify that I'm not saying that you should make mistakes and be rude to customers in order to generate lots of customer complaints. Rather, I believe that when we, as retailers, do a good job of handling customer complaints, we're going to get more people complaining to us. People don't bother complaining when they think nothing will come of it, or—even worse—if they assume that they'll end up feeling angrier or more annoyed because their complaint was ignored or dismissed as unimportant.

Why People Don't Complain
According to TARP Worldwide, the organization that conducted some of the original research on customer complaints back in the late 1980s, only 50 percent of customers, on average, will complain to a front-line person, with no more than 10 percent complaining to a manager. Does this mean that those people don't complain at all? No, it just means that they aren't telling us—the business they have a complaint about. They are still quite likely to tell their friends, family and others about the problem—spreading negative word-of-mouth without giving us the chance to respond.

Although few business owners I know enjoy hearing a complaint about their business, most of us accept (intellectually, at least) that a customer complaint is an opportunity to connect with that customer and turn the situation around. One of TARP's key findings is that customers who complain and are satisfied with how their complaint is handled are actually more loyal than customers who had no problem at all. And if getting complaints and handling them well is important to building customer loyalty, it also stands to reason that handling complaints poorly will have a negative impact on customer loyalty.

How to Handle Complaints Effectively
It would be wonderful if everyone we hired were experts at handling complaints right from the start. But, at least in our experience here at Zingerman's, very few people handle complaints well without training—and practice.
As hard as it can be to hear a complaint as the owner, it can be even harder if you are a front-line staff person, because all too often employees are not given the tools they need to handle complaints effectively. So, they feel helpless—and often defensive—in the face of a customer's dissatisfaction. Handling complaints effectively takes practice and the right tools, beginning with how to react when someone complains.

At Zingerman's, we've been teaching our "5 Steps to Effectively Handling Complaints" for about 20 years now, so we know it's a recipe that works—both for our organization and for the hundreds of others we’ve shared it with through ZingTrain seminars, "Zingerman's Guide to Giving Great Service" book and our two training DVDs. We've also heard from former staff who have gone on to teach the steps in new jobs—both within and beyond the specialty foods industry. In case you don’t have the steps committed to memory, I'll repeat them here.

Zingerman's 5 Steps to Effectively Handling Complaints
1. Acknowledge the complaint. When people complain, more than anything else, they want to be heard. If they know we're listening, their stress level goes down—and so does ours.
2. Sincerely apologize. We don't need to know exactly what happened in order to apologize. If someone is complaining, we know that they didn't have the great experience that we wanted them to have, so we apologize. Because regardless of what happened, we are truly sorry that they are dissatisfied. This is no place for jokes, excuses or explanations—just for genuine remorse.
3. Make it right. TARP's research shows that customer satisfaction and loyalty are significantly higher when a complaint can be resolved on the first contact. So, at Zingerman's, we authorize our staff to do whatever it takes to make things right for the customer. Usually, the employee knows what needs to be done, and we want them to take action. If they need to ask for help, that's OK—but we request that they become the customer's advocate and explain the situation to the supervisor or manager, so that the customer doesn't have to repeat his story.
4. Say thanks. As the research shows, at least half of the time people don't complain—and don't give us the chance to resolve the problem. So, we do really appreciate those who let us know what's going on and have faith that we'll take care of them.
5. Write it up. It's easy to react emotionally to complaints and be tempted to change products, systems or processes in reaction to the most vocal complainers. But when we document complaints in a way that allows us to collect some objective data, we often get a different picture of where to focus organizational time and resources. Because we want to fix recurring problems—and eliminate the mistakes that are leading to complaints. Zingerman's form for documenting complaints is called a Code Red. We've been using a paper version for years and are in the process of phasing in an electronic option as well.

Why Handling Complaints Effectively Leads to More Complaints
(Remember—that's a good problem)
The Catch-22 of handling complaints is that the better you are at it, the more complaints you'll hear. Let me say again that getting more complaints doesn't mean your organization isn't giving good service. At Zingerman's, some of our best customers are also the people who complain the most—because they have strong opinions about how we can get better and because they know we listen to them. Does this mean we sometimes get complaints about things that people would never dream of complaining about to a "big box" store? Sure! But that tells us that our customers know we want to hear from them, and that they feel it is worth their time to share their concerns—which in turn helps us get better.

The bottom line is that handling complaints well increases customer loyalty. Customer loyalty is always important, but never more so than in tough economic times, when people are spending less and being more mindful of where they are shopping. We are always hiring new staff, and we're always trying to improve our service—which means we'll never be done teaching and modeling how to handle complaints effectively. If you don't have your own recipe for handling complaints, give our 5 Steps a try—and let me know how they work for you. I love hearing from Gourmet Retailer readers. To get a copy of our Code Red form or to see Zingerman's employees talking about handling complaints in a clip from our new training DVD, please visit the ZingTrain Website.

Maggie Bayless is the managing partner of ZingTrain, which is the consulting arm of Zingerman's, the specialty food retailer in Ann Arbor, Mich. If you have specific topics you would like to see addressed, please send your suggestions to Maggie at mbayless@zingermans.com.

--The Gourmet Retailer