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How can customer complaints make your business stronger?

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Are customer complaints your biggest fear or your hidden asset? The response could be unexpected.

In the current highly competitive business environment, companies that neglect to heed and glean insights from dissatisfied customers risk lagging behind. This article reveals the counterintuitive reality – complaints can serve as the catalyst propelling you to success.

This week on Let’s Talk, our experts explore how businesses can turn consumer complaints into a competitive advantage.

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Silvana Tagand, Regional Vice President of Revenue, APJ at SAP Emarsys

Silvana Tagand, Regional Vice President of Revenue, APJ at SAP Emarsys

“In the world of retail, customer complaints are invaluable as it serves as a learning opportunity for businesses to work towards excellence.

“In fact, between 2022 and 2023, the Australian Financial Complaints Authority received more than 10, 000 complaints on businesses across varying industries which was a 23 per cent year-on-year increase. Although this may seem like an overwhelmingly large number of complaints, every complaint echoes the sentiment of customers who have placed trust in these brands. Rather than viewing complaints as problems, businesses should recognise them as an opportunity for continuous improvement.

“With businesses reliant on customers’ discretionary spending, customer engagement is especially critical today in Australia. Therefore, the perception of complaints must change and be viewed as a vehicle for insights. In doing so, businesses are presented opportunities to refine their offerings, address shortcomings and elevate their commitment to customer engagement and satisfaction.

“In our Omnichannel Difference report, 46 per cent of respondents reported that their firm saw a rise in customer lifetime value in response to omnichannel engagement.  Remember: omnichannel isn’t just about connecting dots, it’s about understanding a customer’s multifaceted journey with a brand. When adopted, businesses are able to make efficient decisions on areas they need to invest in, identify processes requiring optimisation and forging a relationship with the customer through dialogue. After all, feedback really is a gift.”

Phillip Zammit, Head of Customer Experience for APJ at Zoom

Phillip Zammit, Head of Customer Experience for APJ at Zoom

“A customer complaint may not seem like it, but it is always an improvement opportunity. Whether it’s an opportunity to implement new technology or new staff training. If nothing else, customer complaints provide invaluable insight into your customer base.

“When you receive a complaint, analyse the root causes behind the complaints to address underlying issues rather than just treating symptoms. For instance, if customers frequently complain about long wait times, assess staffing levels, optimise workflows, and invest in technology that expedites customer service.

“Encourage open communication with customers by acknowledging their complaints promptly and transparently. Implementing a robust system for tracking, responding and documenting customer complaints can be instrumental in identifying trends over time and measuring the effectiveness of business processes.

“Use your customer complaints to drive product or service enhancements, demonstrating a commitment to continuous improvement. Communicate these improvements to customers, showing them their feedback contributes to positive changes.

“Lastly, train and empower customer service teams to proactively address potential issues before they escalate into complaints. By fostering a culture of continuous improvement and customer-centricity, businesses can transform customer complaints into opportunities for growth and enhanced customer satisfaction that lead to recovered sales and repeat business.”

Tracy Ford, Founder & HR Consultant at Concept HR Services

Tracy Ford, Founder & HR Consultant at Concept HR Services

“Customer complaints, often seen as challenges, are a treasure trove for employee development and organisational enhancement.

“Customer complaints signify an engaged customer base, providing organisations with opportunities for continuous improvement. It's far better to have customers vocalise concerns rather than harbouring silent dissatisfaction, thereby fostering an environment where customers feel heard and valued.

“Customer complaints offer opportunities for improving processes and, where applicable, employee skill and knowledge gaps. Analysing the root causes of complaints allows organisations to implement preventive measures, such as employee coaching and development, minimising the likelihood of similar issues in the future.

“For this process to thrive, employees should feel safe in expressing and handling customer complaints. A culture that emphasises learning from mistakes rather than punitive measures is crucial. Employees should be encouraged to view complaints as opportunities for growth, not fear retribution. When a safe and open environment is cultivated, continuous improvement becomes more likely, as employees are empowered to address and learn from customer feedback without apprehension.

“Customer complaints, when approached constructively and within a safe culture, transform challenges into opportunities for growth and improvement, benefiting customers, employees, and the organisation.”

Pamela Jabbour, CEO at Total Image Group

Pamela Jabbour, CEO at Total Image Group

“I’ve always loved the quote “if you Stumble, make it part of the dance” and this rings true in all facets of what we do at Total Image Group. Customer complaints are seen as “nuggets of gold” and if we fall short of meeting a client’s expectations and we are lucky enough for them to share this with us, we take this as an opportunity to review what we are doing and what we can do better.

“At Total Image Group, we adopt a proactive and customer-centric approach to transform complaints into catalysts for improvement. Our sales team is not just trained to attentively listen to customer concerns, but also to ensure that customers genuinely feel heard—a fundamental aspect of our commitment to customer satisfaction. We go beyond merely addressing the immediate issue; we delve into the root causes, identify any patterns, and maintain transparent communication with the customer regarding the changes or remedies we’ve implemented.

“Crucially, we leverage customer complaints as a springboard for strategic improvements across our products, services, and processes. This proactive stance allows us to turn challenges into stepping stones for growth and to make the stumble a part of our dance.

“It’s an ongoing journey, but with the right mindset, it proves to be a valuable one.”

Elise Balsillie, Head of Thryv Australia

Elise Balsillie, Head of Thryv Australia

“It happens. We’re all human and make mistakes, so when a customer complaint comes, instead of pointing fingers or blaming yourself, use this as an opportunity to really look under the hood of your business and dig for improvements.

“It’s a valuable moment to take some steps to improve your business. As I often say to small business owners, when you receive negative feedback about your product or service, it might hurt a little bit to hear or read, but it provides you with a critical lens to do things differently.

“So firstly, you can ask yourself, If the complaint is centred on communication (or lack thereof) with a customer, is this an opportunity to put in place some operational efficiencies to help with customer communication? Make sure you’re open and communicative with the customer (so as to avoid more issues!) and invest in some tools that will help you stay on top of your communications, like combined inboxes or notification alerts.

“Also, it’s important to communicate your findings with staff. Share your learnings with them, and make sure you’re honest with what’s occurred. Honesty and transparency builds trusts within teams so sharing the good with the ‘bad’ will mean everyone is aware of the complaint and can learn from it.”

Simon Daniels, Sales Director at ipSCAPE

Simon Daniels, Sales Director at ipSCAPE

“Business leaders can harness the power of Artificial Intelligence to quickly identify a complaint when it happens, diagnose the reasons behind each customer complaint and address these with data-driven improvements.

“One way of using AI for real-time identification of customer complaints is through Advanced AI Speech Analytics. While a service representative is on a phone call with a customer, language models analyse the conversation and pinpoint critical customer metrics including intent, emotion and sentiment (of both parties). These insights can help guide the agent throughout the conversation and if necessary, the agent can make adjustments to deliver an optimal customer experience.

“This solution is especially helpful for Financial Services organisations who are required to manage obligations under ASIC’s ‘Regulatory Guide 271’ which defines a complaint as an ‘expression of dissatisfaction’, encompassing signs of vulnerability, hardship or frustration. Sophisticated Speech Analytics AI models can identify if a customer made a complaint or expressed dissatisfaction so an organisation can enact their Internal Dispute Resolution processes.

“Capturing customer satisfaction post-interaction presents another valuable opportunity to transform complaints into improvements. ipSCAPE Advocate is an AI-based customer experience tool that records and stores after-call satisfaction data such as the customer’s NPS and feedback within ipSCAPE Vault – a secure cloud call recording storage solution. Managers can use the AI to surface specific phrases and words i.e. “my enquiry was not resolved” or “unhappy”. Surfacing negative customer experiences facilitates fast action to help reduce potential churn and aim to improve the customer’s satisfaction.”

Helen Stefanis, General Manager Customer Experience, Cloud and Managed Services at Interactive

Helen Stefanis, General Manager Customer Experience, Cloud and Managed Services at Interactive

“Turning customer complaints into opportunities for improvement is a delicate art. Recognising that the smallest issues for us can be significant for customers, and what it means for their customers, is crucial. Understanding the impact of their complaints, whether rooted in reality or perception, is key to customer-centric improvement.

“Every issue, regardless of its origin, is an opportunity to identify process gaps and enhance customer satisfaction. Acknowledging and addressing human errors, technological failures, or procedural deficiencies requires humility but sets the stage for improvement.

“Establishing a structured approach within teams or organisations is paramount. Acknowledging and sharing feedback, being accountable for actions, and holding individuals responsible for customer satisfaction fosters a customer-centric culture.

“When exceptional service delivery is a non-negotiable, exceeding expectations becomes the goal. Complaints, when handled adeptly, can lead to customer delight. Responding with transparency, avoiding defensiveness, and turning negative experiences into positive outcomes showcase organisational maturity.

“Expressing gratitude for feedback, regardless of its nature, reinforces a culture of openness. Balancing responses to negative and positive feedback is essential, as is internal transparency to learn from mistakes. Ultimately, transforming complaints into opportunities hinges on turning the process, not the person, into the focal point of improvement.”

Antoniette De Marco, General Manager – Technology at Konica Minolta Australia

Antoniette De Marco, General Manager – Technology at Konica Minolta Australia

“Customer centricity is essential for every business to succeed, even more so now than at any other time due to how fast a negative experience can be shared online. For business-to-business (B2B) organisations, it’s important to understand where they sit in their digital transformation journeys. Digital transformation underpins how a business operates; however, it only delivers the best outcomes for the business and customers if the correct solution is in place to support the journey.

“Why is customer experience so important to get it right?

“Usually, if there is a gap in operations, your customers are the first to find it. That’s why it’s so important to listen carefully to the complaints because these hold the seeds for improvement. This is how you build a business that prioritises the customer experience, values customer feedback, and stands out for its customer service.”

Konstantin Klyagin, Founder and CEO of Redwerk

Konstantin Klyagin, Founder and CEO of Redwerk

“Complaints are a fact of life for any business. But they can be a good thing. Recurring complaints about the same issue help identify systematic problems that require immediate intervention. Understanding customer pain points helps develop relevant features or even new offerings. Some complaints may reveal inefficient workflows, pushing you to search for bottlenecks and innovate.

“Also, you can use complaints to strengthen your customer relationships. By empathizing with customers and taking action to resolve their problems, you can win their trust. Let them know what you’ve done to address their feedback and how it will benefit them. Check in with them regularly to ensure they are happy. Keep an open line of communication and show appreciation for their feedback. That’s how you build a trustful and long-standing relationship from a customer complaint.

“With over 18 years in software development, we’ve seen some complaints. But they’ve helped streamline our operations across departments – from sales to project delivery. One lesson we’ve learned is to adapt our communication style and reporting for non-technical customers, avoiding technical jargon and explaining everything we do in simple terms. A simple change like that has helped us secure many partnerships with established brands.”

Jonathan Reeve, Vice President APAC at Eagle Eye

Jonathan Reeve, Vice President APAC at Eagle Eye

“Customer complaints offer a significant opportunity for improvement. However, the key to

getting it right comes down to three things:

Treat people as they want to be treated: Demonstrate that you care about the customer experience by not only listening but taking actions that are tailored to each individual scenario.

Use feedback to improve and innovate: When customers provide feedback (whether it’s good, bad or ugly), use that as an opportunity to evolve and enhance your services.

Foster a culture of transparency and proactive improvement: Embrace the principle of challenging the status quo and create a culture focused on always delivering even small, incremental improvements.

“Remember, the goal is not just to resolve complaints but to turn them into opportunities for growth. Regularly assess your processes and services, and be willing to adapt based on customer insights.

“This iterative approach positions your business for long-term success, building trust and loyalty. Ultimately, treating customer complaints as stepping stones toward improvement will not only satisfy current customers but also attract new ones who appreciate your commitment to evolving and delivering an exceptional experience.”

Ben Wright, Director at Stronger Sales Teams

Ben Wright, Director at Stronger Sales Teams

“A business is first judged by the initial impressions it makes.  A longer lasting legacy is decided by its final Customer interactions.  In between lies a series of opportunities to build, and destroy, trust and credibility.

“Within the numerous Customer interactions that occur between that first and last contact, there often arises a level of Customer dissatisfaction.  Businesses who thrive on great reputations act swiftly to address the complaints and ensure the Customer issue is resolved.  How a business responds during a level of adversity is when true capabilities shine through and long-term Customer relationships are made (or broken).

“Every business has the opportunity to learn quickly from Customer complaints, with some of the best taking an organisation wide approach by:

Building KPI’s into Customer Service teams to be responsible for collecting complaint data and identifying consistent trends.

Empowering cross-functional teams to review complaint trends and make suggestions for improvements.

Providing the resources to leaders to execute rapid and agile changes to their offerings. And,

Embedding a top-down culture that celebrates identifying how Customers can be better served at any point in their business journey.

“‘Being Easy to Work With’ is a tagline many businesses could do so well to embrace.”

Aprille Lim, Founder of Seaquatix

Aprille Lim, Founder of Seaquatix

“Our customers are our biggest motivation for innovation. Customer feedback (both good and bad) provides us with a barometer reading of how well we are doing in market and what we can do to improve. In fact, the last two iterations to our waterproof phone cases were catalysed from customer complaints. Since our customers are engaging with our product every day and in a number of situations we may not have originally factored in, they are best placed to tell us how we can improve. At the end of the day, our job as founders is to develop a product or service that speaks to the end user and makes their lives easier. Therefore, we welcome feedback from our customers as it helps us to deliver a better end product or service, and keeps us motivated to innovate. It’s a win-win because the flow-on effect for businesses is having customers become your number one advocate, while delivering a product or service that truly addresses your customer’s needs.”

Danica Bunch, Australian Award Winning Strategic PR and Crisi PR Specialist, DanicaB PR

Danica Bunch, Australian Award Winning Strategic PR and Crisi PR Specialist, DanicaB PR

“Turning customer complaints into opportunities for improvement is an essential strategy for businesses aiming to thrive in today’s market. Listening to your customer base is not just about addressing immediate concerns; it’s about understanding the evolving needs and expectations of your market. Every complaint offers invaluable insights into the customer experience, highlighting areas that require attention and refinement.

“The value of customer feedback cannot be overstated. It serves as a direct line of communication from those who matter most – the end-users of your services or products. By actively seeking and embracing this feedback, businesses can pinpoint specific issues and implement targeted improvements. This proactive approach not only resolves current problems but also pre-empts potential future challenges, leading to continuous enhancement of products and services.

“Effective communication is crucial in handling complaints. It’s vital to acknowledge the customer’s concerns promptly and empathetically, ensuring they feel heard and valued. Transparent and open communication fosters trust and demonstrates a genuine commitment to customer satisfaction. By addressing and rectifying issues, businesses can turn negative experiences into positive outcomes, showcasing their dedication to excellence and customer service.”

Andy Bowen, Director and Chief Investment Officer at Bowens

Andy Bowen, Director and Chief Investment Officer at Bowens

“A common frustration for Australian builders has long been the disruption of sending trades offsite for building supplies, costing them time and, ultimately, money. That’s why we addressed this issue by partnering with Uber Direct to launch a new delivery service that allows hardware supplies to be delivered to work sites and homes in under 90 minutes for a $10 flat fee.

“Builders and weekend ‘do-it-yourselfers’ (DIY) can access the new service by selecting Uber delivery at the checkout via bowens.com.au and tracking their orders in real-time. We recognise the industry is under pressure in the face of rising costs and labour shortages, so delivering orders with minimal onsite disruption is another step forward for our industry. Our customers are excited about this offering, and, as industry leaders, we remain committed to furthering the ways we innovate through improved serviceability and digital integration. Helping our builders build better is at the core of our family-business values and we are constantly reviewing the ways we engage with and service our customers to better support their needs.”

Sally Branson, Crisis and Reputation Authority/Managing Director at The Sally Branson Consulting Group

Sally Branson, Crisis and Reputation Authority/Managing Director at The Sally Branson Consulting Group

“I bang on all the time that a crisis is the greatest driver for growth in a business – the key though is to see the opportunity for growth before the crisis happens.

“Customer Complaints are one of the very best red flags for crisis and growth in a business.

“One of my favourite sayings – because it’s true  – is that where there is smoke there is fire. Almost all businesses can get one bad review or one complaint from a customer who will never be happy or can not be pleased. But more than three becomes a pattern. My best advice is to be aware of patterns, take notice of what the issue is, and work out a plan to mitigate and manage the issue as soon as it happens. This sort of crisis is called a creeping crisis, and it’s one of the very most common ones. These are the types that can do the greatest reputational damage to your brand or your business.

“It can seem overwhelming but the easiest steps to be on top of this are to log every single complaint and watch for patterns. See what emerges, talk to your customer service person or team, and look for patterns. Another great tool is to put yourself in the shoes of your client or customer and go through your workflow to look for any pain points. When you’re clear on pain points, it becomes super easy to start to see your best opportunities and where you need to focus your attention for growth.”

Ged Mansour, Director at Same Wave Communications

Ged Mansour, Director at Same Wave Communications

“Listen, listen, listen!

“It’s easy to acknowledge and respond to positive feedback. The real test is how companies respond to criticism.

“For example, I worked with a startup for several years who offered a range of innovative telco plans. Feedback early on was that we were missing a product for the mid-level user who wanted flexibility in how they spent their mobile dollars (this was before the days of eye-watering data inclusions). From the CEO to the comms team, IT and customer service, we all reviewed the feedback and the decision was made to fill the gap with a product for this audience.

“While this isn’t always feasible, what is practical is making it part of everyone’s job to spend time on the company’s social media platforms and reviews websites, share key areas of customer discontent and focus on common themes, be they customer service, product inclusions or whatever else is causing dissatisfaction.

“Work on these issues and let people know when you’ve made improvements. The empowerment customers will feel at knowing they’ve been listened to is amazing.

“It’s not just good PR. It’s good business.”

Madelene Ragno, Founder of MADE Marketing

Madelene Ragno, Founder of MADE Marketing

“We’ve all been there—pouring our heart and soul into a project or client, only to encounter a complaint about deliverables, timeframes or communication. Customer dissatisfaction is an inevitable part of business, and it’s naive to assume there won’t be moments when someone isn’t pleased with your output.

“When confronted with a complaint, our agency takes it upon itself to delve deep into the matter. We dissect every facet of our business that may have let down the customer. Did the client feel a lack of communication? Were our goals not clear enough? At which point in the client’s journey did the breakdown occur? Reflecting on this level identifies weaknesses in our pipelines that we may not have initially considered, prompting us to implement systematic changes to prevent similar problems in the future.

“If clients express dissatisfaction with specific aspects of our marketing services, we consider these insights as valuable data points. We use this information to refine and optimise our service offerings, ensuring that they align more closely with client expectations. This proactive approach not only addresses existing concerns but also positions our agency as one that actively listens and evolves to meet client needs.

“Complaints help us spot weaknesses, make necessary changes, and ensure our agency not only tackles issues but evolves to better meet our clients’ needs.”

Tristan Wright, CEO and Founder of Evolve to Grow

Tristan Wright, CEO and Founder of Evolve to Grow

“Transforming customer complaints into opportunities for improvement requires a proactive approach that prioritises feedback as a valuable resource. Firstly, organisations must view complaints as insightful indicators rather than mere problems. Analysing patterns in customer grievances helps identify systemic issues within products or services. This information becomes a roadmap for targeted improvements, ultimately enhancing overall customer satisfaction.

“Establishing a robust feedback loop is equally vital. Encouraging customers to share their experiences, whether positive or negative, fosters an ongoing dialogue. This continuous exchange of information enables companies to adapt in real-time, refining their offerings and processes based on customer input. By addressing concerns and implementing tangible improvements, organisations not only resolve specific issues but also cultivate a reputation for responsiveness and customer-centricity. This approach turns complaints into opportunities, allowing companies to strengthen customer relationships, build trust, and enhance overall product or service quality.”

Trena Blair, CEO of FD Global Connections

Trena Blair, CEO of FD Global Connections

“In the USA, the economic impact of poor customer service is estimated between $75 billion to $1.6 trillion annually. Customer influence is at an all-time high, where positive experiences can generate cost-free word-of-mouth referrals and new business opportunities. Conversely, failure to deliver a positive customer experience can significantly tarnish a business’s reputation.

“Studies indicate that 13% of dissatisfied customers share their complaints with 15 or more people, while only 1 in 25 directly complain to the company. Moreover, a substantial 91% of dissatisfied customers who refrain from complaining cease doing business with the company.

“Despite the negative repercussions, customer complaints can offer valuable insights. Each grievance serves as a direct indicator of product flaws, employee issues, or internal process deficiencies. Addressing these concerns promptly allows companies to investigate and improve, preventing future complaints. As highlighted by Harvard Business Review, swift resolution of customer complaints within 5 minutes increases customers’ willingness to spend on future purchases.

“In conclusion, developing a robust customer complaints process is crucial for companies expanding into the USA. By doing so, they can pinpoint areas for improvement, retain customers, and foster a loyal customer base, contributing to the growth and success of businesses in the USA.”

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