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Five Ways to Turn Complaints into Profits


It is time for organizations to think of complaint handling as a strategic tool…rather than as a nuisance or cost.

Janelle Barlow and Claus Moller, A Complaint Is A Gift

The ultimate goal of the complaint resolution process is not to resolve the problem, but to retain the customer. Our response to complaint situations should not only resolve the problem, but should also keep the customer from even thinking about defecting to the competition. Here are five field-tested and proven ways I help my clients turn complaints into profits.



1. Resolve the complaint immediately – TARP, Inc. has found that 95% of complaining customers will remain loyal if their complaint is resolved on the spot. That number drops to 70% if there is a delay in resolution.



2. Make it easy for customers to complain – The mere voicing of a complaint, even in the absence of resolution, actually increases the chances an unhappy customer will return. TARP, Inc. found that customers who complained and did not receive a satisfactory resolution to their problems, were 10% more likely to remain loyal than dissatisfied customers who did not complain.



3. Follow up after resolution – The company’s idea of problem resolution may not necessarily be the customer’s idea of a satisfactory resolution. For this reason, it’s a great idea to follow up with customers 30 – 90 days after you’ve resolved the problem to ensure they are satisfied with your resolution. This extra step helps you capture problems that weren’t identified at the initial point of contact and helps you completely regain customer goodwill after service mishaps.



4. Give a token item - Coupons and product samples have a definite impact on loyalty after a service failure has occurred. A study conducted for SOCAP found that 58% of complaining consumers who received something in the mail following their contact with consumer affairs departments were delighted, versus only 40% of those who did not receive anything. Giving customers token items, such as coupons or product samples, after a service failure both increases the perception of value and serves to maintain loyalty.



5. Equip staff with product knowledge -Customers, particularly customers who have experienced a problem, want to talk to knowledgeable professionals who can quickly and completely answer questions. While it is not possible for your staff to know everything customers want them to know, you should strive to keep customer service professionals in the know in such areas as current promotions, warranties, recalls, policies and procedures. This knowledge creates value for customers and expedites transaction time, which cuts costs.


Given the fact that it cost 4 – 5 times more to win a customer than to keep a customer, it makes sense to view the complaint handling process as a critical component of the organization’s sales process. Each time you resolve a complaint to the customer’s satisfaction, you have sold your company back to the unhappy customer. In other words, you have retained the customers who were at serious risk for defection and saved the

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