Tips for Responding to Customer Complaints

No matter how skilled you are at customer service, you’re never going to make every customer happy. Eventually, a customer will have an issue with something pertaining to your business, and you need to be prepared to handle those customer complaints in a professional manner.

According to research, just one negative review of your business online drives away roughly 22% of prospects.[1] Three negative reviews drives away nearly 60% of prospects. In other words, being able to handle customer complaints in a way that doesn’t exasperate the situation is pretty much required for the long-term survival of your business. 

“Twenty years ago, customer complaints were bad, but the threat of them going viral online wasn’t there,” says Gary Cubeta, founder of the insurance firm Insurance for Final Expense. “So today it’s critical that you service customer complaints before they get out of control online and pretty much put you out of business.”

We spoke with small business owners across the country about what they do when they receive customer complaints and compiled their suggestions into this guide. By the end, you should have a strong understanding of how to handle customer complaints, as well as strategies you can implement to avoid customer complaints in the future.

Why Customer Complaints Matter

It’s important not to look at customer complaints negatively. In fact, if a customer does complain to you, consider yourself lucky. Most unhappy customers won’t contact you directly—they’ll turn directly to customer review websites like Yelp and write a negative review without first giving you the opportunity to right the situation.

customer complaintsSource: Yelp

For the few who do complain directly to your business, they’re actually doing you a favor by providing you with valuable feedback you can use to improve your operations.

Did a delivery not arrive within the allotted time frame? Maybe you need to rethink how your fulfillment process operates. Did your product break shortly after purchase? Perhaps your manufacturers aren’t living up to their end of the bargain.

“I reach out to every single person who has posted a negative review and ask them to explain their experience,” says Ladan Davia, CEO of the job search website Beeya. “I try to understand what went wrong, why they were left unhappy, and how I can change their minds. When I first started my company, a lot of the bad feedback was stuff I needed to hear and change about our product.”

If you handle a customer complaint well, it could actually be better than if the customer had not complained in the first place. According to research published in the Harvard Business Review, customers who have a complaint handled in less than five minutes go on to spend more on future purchases.[2]

For these reasons, it’s not only important to embrace customer complaints, but also solicit feedback whenever you can. Knowing what customers like and dislike about your business is arguably the most valuable intel you can have as a small business owner.

How to Respond to Customer Complaints: A Step-by-Step Guide

Now that you know the importance of dealing with complaining customers, it’s time we provided you with some steps to take when you do receive a customer complaint. Follow these steps and you’ll turn that customer complaint into a net positive for your business.

Step 1: Set Standards Beforehand

You can preempt customer complaints by educating your customers on potential risks before they engage with your business. This is the approach Chris Facey takes as owner of the freight broker service Freight Savvy.

“I educate my customer ahead of time on the possibilities of a failure no matter how remote,” Facey says. “For example, if a shipment is time-sensitive, I will ask them how important on-time arrival is on a scale from one to 10. Then, framed by their own response, I let them know the reality of the chances of success. Of course, I always give them any other options I can find and let them choose the amount of risk. With the choice being theirs, customers are much more understanding if something goes sideways.”

This approach isn’t specific to service businesses. If you’re a brick-and-mortar retailer or ecommerce merchant, you should clearly lay out your business’s terms and conditions, so customers understand what your business is and is not responsible for.

Step 2: Respond as Quickly as Possible

If and when you do receive a customer complaint, it’s important to jump on it right away. You don’t want to give a customer time to stew in their anger, lest they start spouting off about your business to others. 

“In the event that an SMB receives a negative review, they should respond within 12 hours with an acknowledgment of what went wrong and an effort to remedy the situation by offering to help the customer,” says Osiris Parikh, marketing coordinator at Summit Mindfulness.

To make sure he can respond quickly, Jacob Landis-Eigisti, who operates his own marketing consultancy, leverages online tools that alert him when someone is talking about his business.

“We’ve set up Google alerts so we’re notified when we’ve been mentioned in an article or review. We also use Review Tracker to help us monitor all of our reviews,” he says. “This way, we are able to jump on negative reviews as quickly as possible. Customers notice that kind of thing.” 

Other tools small business owners recommend for monitoring customer reviews include Hubspot CRM, LiveAgent, BrandWatch, Yext, and YouScan. 

Step 3: Make Sure You’re the One Responding

When a customer has a complaint, they don’t want to talk to a lower-level employee, they want to talk to the person in charge—especially if your business is very small. As a small business owner, you should be the one who speaks on behalf of your business in the event of a negative customer experience. After all, you’re best suited to resolve their issue, and you can also use their complaint to identify larger issues that need to be resolved.

“I almost always make the calls myself if it’s escalated to the point of people being really upset with us for some reason,” says Benjamin Walker, CEO of Transcription Outsourcing, LLC. “It helps when I tell them I am the owner of the company and I will do whatever it takes to make the situation right. Mistakes happen, most people realize that, and if I can get them on the phone myself and explain to them what happened and make it right, we always end up okay in the long run.” 

Step 4: Listen and Gather Information

This may seem obvious, but hearing the customer out is arguably the most essential step to resolving customer complaints. If the customer is especially hostile, it may be difficult to hear them disparage your business. But within all that vitriol is a lesson on how you can improve, so make sure you understand what happened and how you can make sure it won’t happen again.

“When someone is unhappy with you or your organization the most important thing to do is listen,” says Sarah Feldscher, founder of Total Senior Services. “Most of the time I find that unhappy customers will tell you exactly what you need to do in order to correct the situation.”

“The goal is to obtain as much information about the complaint at the onset, so the customer isn’t left feeling like something from the interaction is missing,” adds Nathan Kirk, marketing director at Palmetto Cheese. “When customers are given clear explanations in a timely manner that is in regards to their issue, most issues can be immediately resolved.”

Step 5: Validate Their Concerns

The tricky thing about customer complaints is that business owners have very little leverage because of the overwhelming influence of customer review websites. So once you’ve listened to what the customer has to say—whether you believe their complaint is fair or not—you’re going to want to de-escalate the situation by validating their concerns. This means acknowledging what they have to say and promising them you’ll work toward a resolution to their issue.

“Validating a customer complaint means showing them you care,” says Kim Hawkins, owner of Events Wholesale. “So when we get a complaint, we do everything we can to make it right. When the customer feels like you care, they’re more than willing to give you a good review.”

Step 6: Apologize

Whether you feel like your business is in the wrong or not, your customer still had a bad experience and apologizing for this can go a long way. This goes hand-in-hand with validating the customer’s concern. The customer wants to feel like you care and that you are truly sorry for the trouble you’ve caused them. 

More often than not, an apology is all the customer is looking for.

“Once we have listened to their complaint in its entirety, we apologize,” says Shahram Zarshenas, founder of accounting firm Financial Cents. “You don’t have to admit guilt, but you need to make it clear that you understand why they are upset. This alone can be therapeutic enough to diffuse the tension or even resolve the problem.”

Step 7: Find a Solution

The next step is to offer them something that will (hopefully) serve to resolve their issue. This could be a free refund, voucher, coupon, or some other form of compensation that leaves the customer feeling like they weren’t cheated or ignored.

“I have refunded people money, sent them gift cards, emailed them apologies, and even called their bosses and explained what happened to help keep someone from being let go because of a mistake we made,” says Walker.

Step 8: Make a Record of the Complaint

Once you’ve resolved a customer’s complaint, it’s important you make a record of it, as this will help you resolve complaints in the future, as well as identify trends. 

By having a log of all your customer complaints, you’ll be able to tell what kinds of complaints happen most often, whether or not the same customer has complained more than once, if there are any patterns that led to a recurring complaint, and what you have done in the past to resolve a certain type of complaint. 

All of this information will help you make more informed decisions going forward. 

Step 9: Follow up With the Customer

As an added touch, you can reach back out to the customer a few days after handling their complaint to see how they’re feeling. This shows them once more that you care, and that their concerns are top of mind for your business. 

Additional Tips for Handling Customer Complaints

Handling customer complaints is more art than science. After all, you’re dealing with human beings, and they can be quite unpredictable (especially if they’re angry). For this reason, here are some other things to keep in mind when it comes to providing customer service:

Keep Your Emotions in Check

The customer is already annoyed, if not outright angry. If you lose your cool as well, things could get ugly. We understand that you may not want to hear people say negative things about your business, but it comes with the territory so it’s of the utmost importance that you keep your emotions in check.

“Whether you feel anger, guilt, or disappointment, don’t let it interfere with logic,” says Colum McGauley, CEO of Kariyo. “Making decisions based on emotion is only going to lead to chaos. The best thing to do is to review the complaint with logic and ask yourself or your team ‘why?’”

Decide If the Customer Is the Problem

Customers who complain repeatedly and are impossible to please are probably more trouble than they’re worth. If you’re dealing with someone like this, your best course of action is to cut and run.

“When I get a complaint, I talk to everyone involved so I can get an honest opinion from both sides,” says Taylor Hill, CEO of Spark Marketer. “Based on my findings, I may decide whether or not the company can live without this customer’s business and proceed accordingly.”

Be Careful About Who You Do Business With

Rather than find out a customer is problematic after the fact, try and gauge it before you agree to do business with them. Now, not every business owner has the luxury of choosing who they do business with. At the same time, finding the right people to work with can be more beneficial to your business than investing time and resources into serving clients who are going to cause you problems.

“If I get a bad vibe from someone from the outset (too rushed, untruthful, or gut feeling) I will politely decline their business,” says Facey. “On the other hand, for good customers, I will build a relationship with them and if something bad does happen, I will do whatever I can to protect that relationship and that business.”

Proactively Solicit Feedback

Instead of waiting for customers to complain, preempt the situation by asking them to leave feedback. Customers are less likely to be harsh to businesses that are proactively trying to improve. If you do receive negative feedback, you’ll be better positioned to get out in front of it and resolve the issue by responding directly to their comments.

“I encourage my customers to leave our company reviews on websites like Yelp and Trustpilot,” says Deborah Sweeney, CEO of My Corporation. “We do not ignore online reviews or comments where a customer has had a less-than-satisfactory experience with us, and we do take care with our response.”

Hire for Customer Service

If your business has grown to the point where you can no longer handle every customer complaint personally, we recommend hiring a customer service representative. This is an individual who will make sure customer complaints are resolved professionally and quickly so that your business’s brand can remain intact. 

“We employ ‘customer advocates’ whose job is to listen and see every situation from the customer’s perspective,” says Leah Hazelwood, owner of Go Forth Pest Control. “They present circumstances to the rest of the customer service team from the customer’s perspective and advocate internally on behalf of the customer to reach the best solution for them.”

See Customer Complaints as a Positive, Not a Negative

Nobody likes to get complaints, but if you view them as an opportunity to improve, you’ll be better equipped to handle them. Remember, resolving customer complaints isn’t just about making one customer happy. Others will see how you approach a disgruntled customer, and it will color their perception of your business.

So, how do you want other customers to look at your business? Consider that the next time you’re dealing with a customer complaint.

Article Sources:

  1. CMGLocalSolutions.com. “Digital Marketing Solved Blog
  2. HBR.org. “How Customer Service Can Turn Angry Customers into Loyal Ones

Matthew Speiser

Matthew Speiser is a former staff writer at Fundera.

He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Prior to Fundera, Matthew was an editorial lead at Google and an intern reporter at Business Insider. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world.

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