Introduction: The story presented below was a part of an invitation mail to attend one day training on “Complaints Handling/Customer Retention” that hit my inbox years back, in Jan’2007. Due to some functional limitations, I did not respond to the mail, but the story was continually spinning in my mind. I started blogging nowadays, therefore, sharing my thoughts here. Author of the story was not mentioned in the mail so I am also unable name the author.
Are “Nice Customers” Ruining Your Business?
I’m a nice customer. You all know me. I’m the one who never complains, no matter what kind of service I get.
I’ll go into a restaurant and sit quietly while the waiters and waitresses gossip and never bother to ask if anyone has taken my order. Sometimes a party that came in after I did gets my order, but I don’t complain. I just wait.
And when I go to a store to buy something. I don’t throw my weight around. I try to be thoughtful of the other person. If a snooty salesperson gets upset because I want to look at several things before making up my mind, I’m just as polite as can be. I don’t believe rudeness in return is the answer.
The other day I stopped at a full service gas station and waited for almost five minutes before the attendant took care of me. And when he did, he spilled gas and wiped the windshield with an oily rag. But did I complain about the service? Of course not!
I never kick. I never nag. I never criticize. And I wouldn’t dream of making a scene, as I’ve seen some people do in public places. I think that’s uncalled for. No, I’m the nice customer. And I’ll tell you who else I am.
I’m the customer who never comes back!
The story was astounding and seriously drew my attention. This is contrary to the general perception about a “nice customer” who helps keep the complaint register neat as he never complains. For sales persons what else would be better than presenting a blank complaint register during the annual sales and service review! Agree? Are they really “nice customers”? Are they really nice for the business?
The Present Situation: Today each business desperately wants to keep it’s existing customers. Few surveys, as mentioned below, portray the benefit of customer retention:
“Attracting a new customer costs 5 times as much as keeping an existing one.” • Source: Lee Resource Inc.
“A 2% increase in customer retention has the same effect as decreasing costs by 10%.” • Source: Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
If a customer is unhappy, he may quit. A tentative list of what makes a customer unhappy is mentioned below:
- He has to wait too long for the product (Physical Inadequacies)
- He is given defective or inferior quality product (Physical Inadequacies)
- He has to wait too long in queue for service (Physical Inadequacies)
- Quality of service is not up to the mark (Physical Inadequacies)
- He feels cheated over guarantee/warranty issue (Physical Inadequacies)
- He is over promised (Behavioural Inadequacies)
- He feels his expectations are not met (Behavioural Inadequacies)
- Negligent behaviour and careless attitude of the employees (Behavioural Inadequacies)
- He Is treated impolitely (Behavioural Inadequacies)
- Lack of information on status of his complaint (Behavioural Inadequacies)
If physical inadequacies of the product or service make a customer unhappy, he may complain about it and can quit if his complaint is not resolved appropriately. If he is upset with behavioural inadequacies, viz., careless attitude and negligent behaviour of the employees, he may quit forever without making any complaint. Businesses give priority to the complaints that it receives officially because of some legal consequences. Most of the times, a customer is unable to prove or produce evidence of misbehavior or negative attitude of the employees, thus, he prefers to keep quiet. Businesses do not bother much about them. In fact they mistake them as “nice customers.” Most of the businesses have adapted a specific “Complaint Management System (CMS)” to redress customer’s complaints and grievances and to estimate the level of customer satisfaction. Getting “Post Sales/Service Feedback (PSF)” from the customers have become a ritual today. A dedicated PSF team is seamlessly engaged in collecting customer’s opinion on the products or services offered or delivered. The analytics team classifies, analyze and interpret the PSF data in a statistical form to get an idea of customer’s satisfaction level. The outcome is popularly known as “Customer Satisfaction Index (CSI)” being used without a glitch across the industry. Businesses use the CSI facts to work out right retention tactics and loyalty programs to lure existing customers and to broaden the customer base to take an edge over competition. A high CSI score indicates higher level of customer satisfaction and vice-versa. To maintain high CSI score, some big businesses often run CSI improvement campaigns, which, inter-alia, involve employees, dealers, distributors, and other channel partners.
The Hitch & The Glitch: No doubt businesses are striving to keep CSI score high and periodically monitoring it to make necessary change (if required) in the business processes to get rid of any glitch that affects customers adversely. In most of the businesses, a CMS is put in place. But the approach is a bit mechanistic and static. It helps a customer raise complaints about physical inadequacies of the product or service, but fails to capture data on behavioural inadequacies viz., pains, sufferings, feelings, emotions and sentiments of the customers, careless attitude and negligent behaviour of the employees, etc. This shortcoming of the CMS makes the entire exercise redundant. To overcome the shortcoming, during PSF process, some businesses ask customers whether behaviour of the employees was good. Though it sounds well but most businesses are hesitant of inciting them on bitter customer experience and just overlook because, in their opinion, they are “nice customers.”
The Truth: The fact is something else. The businesses boast of logical way out of each complaint they receive and proudly flash their CSI score revolving around, e.g., 94 – 96%. But this doesn’t seem true. The following survey report says aloud that most of the customers quit because of the bad customer experience (Behavioural Inadequacies) which the CMS captures rarely.
“86% of consumers quit doing business with a company because of a bad customer experience, up from 59% four years ago.” • Source: Harris Interactive, Customer Experience Impact Report.
Thus the CSI score doesn’t stand for 94 – 96% satisfied customers. Following survey reports through light on the truth:
“A typical business hears from only about 4% of its dissatisfied customers. 96% just go away and 91% will never come back.” • Source: “Understanding Customers” by Ruby Newell-Legner
“For every customer complaint, there are 26 other customers who have remained silent. *Source: Lee Resource Inc.”
In the process of redressing the customer’s complaint, albeit the businesses offer a new product in lieu of defective one or offer more service in lieu of improper service delivery or refund the money the customer spent, the customer doesn’t come to ease. According to a survey:
“A dissatisfied consumer will tell between 9 and 15 people about their experience. About 13% of dissatisfied customers tell more than 20 people.” • Source: White House Office of Consumer Affairs, Washington, DC.
The following survey reveals that if we assure better customer experience to the customer, he would eagerly spend more on our product or services:
“Even in a negative economy, customer experience is a high priority for consumers, with 60% often or always paying more for a better experience.” • Source: Harris Interactive, Customer Experience Impact Report.
One can easily foresee the level of frustration if customer’s expectations are not met.
The key: A survey on “Why customers quit” found the following:
- 1% die
- 3% move away
- 68% quit because of an attitude of indifference towards the customer by the staff
- 14% are dissatisfied with the product
- 9% leave because of competitive reasons
• Source: How to win customers and keep them for life – Michael Leboeuf.
Another independent survey also shows:
“68% of customer defection takes place because customers feel poorly treated.” • Source: TARP.
It is exciting to see the above two surveys, which are showing similar findings. The CMS is able to take care of only up to 14% customers. Even if the businesses redress 100% product or service related complaints, a major fraction (68%) of the customers would remain unhappy and very much likely to quit because of negative attitude and negligent behaviour of the employee. It is, therefore, imperative for the businesses to do something concrete to streamline the employee’s attitude of indifference towards the customer.
“This is the time to contemplate: Are nice customers really nice for your business?”
Given below is a tentative list of doable actions, which if put into practice, would help create an environment where customers could have better and positive experiences:
- Create a customer profile
- Prepare customer experience or journey map
- Arrange soft skills and behavioural training for the employees
- Caution employees for over promises and making up unrealistic expectations
- Make the employees accountable for proper customer handling
- Inculcate culture of management by criticism
- Welcome customer complaints
- Share escalation matrix
- Assure them of quick and logical resolution to their complaints
- Get in touch with the customer and keep him updated
- Make them think that their complaints are important as this shall help us develop even better product or service