Why customer complaints are good for your business

Very rarely, if ever, are customer complaints a pleasant experience for either party involved.

For customers, they are often the last resort before abandoning a business whose conduct disappointed them. For businesses, they may range from unpleasant, albeit well-meaning, blows to their public image to unwarranted, indiscriminate personal remarks.

Still, customer complaints are good for your business if analysed and addressed properly.

What is a customer complaint?

Typically, customer complaints are not deliberately mean-spirited or devoid of substance. Yes, the impact of COVID-19 on customer behaviours may slightly affect complaint substance, style, or frequency, but the average complaining customer still just wants to be heard.

In essence, then, a customer complaint pinpoints perceived shortcomings in such areas as:

• Communication and messaging
• Service quality
• Post-purchase engagement

Through that definition, we might argue that receiving customer complaints are good for your business. They may indeed have a serious impact on your image and revenue if left unchecked. However, they may also reveal opportunities for improvement, growth, and even renewed customer loyalty.

Why minding customer complaints is crucial

First, let us discuss why customer complaints carry as much weight as they do. It is easy enough to claim they are crucial, but statistics may illustrate it in depth.

They matter to your customers

First and foremost, customer complaints matter to your customers themselves. It is no coincidence that such marketing agencies as Digital Dot focus on addressing complaints swiftly and effectively. Customers would not bother complaining unless they valued your business, to begin with.

Esteban Kolsky finds that only 1 in 26 dissatisfied customers complain at all - the rest just leave. That 1 in 26 who does, however, seeks satisfaction to continue doing business with you.

They get shared

Moreover, customer complaints get shared en masse. Consumer Affairs finds that a staggering 88% of dissatisfied customers share their experiences with others. Conversely, only 35% actually share their complaints with the business directly - echoing the above figures.

To support this notion further, Esteban Kolsky also found that 13% of dissatisfied customers will share their complaints with 15 or more people. 

They lead to churn

Of course, these complaints will naturally lead to increased customer churn. Relevant findings here include customer perceptions like:

• 88% of consumers' purchasing decisions are influenced by customer service reviews, according to Zendesk.
• The same research quantifies this influence at 86% for millennials specifically - a crucial demographic in the coming years.
• 48% of consumers expect their complaints and questions on social media to be answered within 24 hours, according to Statista.

Coupled with the above, unanswered customer complaints will have both these customers themselves and their acquaintances leave your business. When customer retention is such a crucial metric, this is a very substantive concern.

They affect revenue

In turn, enough customers being driven away will visibly affect revenue. That's not due to direct revenue loss alone, or even due to a damaged public image by shared complaints. Rather, it's also because of customer acquisition costs being exponentially higher than customer retention costs. 

Outbound Engine reports that the former can cost up to a staggering 5 times as much as the latter. However, by the same token, this may reveal how customer complaints are good for your business; if addressing them can increase retention rates, it can yield very substantial benefits.

They matter to Google

Finally, negative reviews matter to Google. In much the same way as positive reviews can enhance local SEO, negative ones can hamper it.

In this regard, customer complaints go beyond human visitors themselves and affect your digital presence. Reviews are a significant signal in regard to your business's quality, authoritativeness, and trustworthiness. Of course, this too means that satisfying complaining customers into leaving positive reviews can offer benefits.

Why customer complaints are good for your business

Having highlighted all the harm they can cause, what are the benefits of customer complaints?

They highlight gaps in your services

Initially, complaints are likely among the best ways to acquire insights on customer pain points and underperformance. 

Not every complaint will do so, of course, so due analysis is in order. To pinpoint actionable insights, examine complaints at scale and within context:

• Does any given complaint arise consistently? If so, how frequently does it arise?
• Is it a recurring complaint of specific customers? If so, does their interaction history reveal additional information?
• Are there any other discernible patterns around it, like specific complaint types or submission times? 

In this initial regard, then, complaints offer an excellent opportunity for introspection and improvement - one which may have otherwise slipped.

They offer honest, direct feedback

Then, customer complaints offer honest feedback on said issues. Qualitative analytics typically rely on direct feedback through such sources as:

• Reviews
• Surveys
• Direct engagement

However, such methods may not be infallible or sufficient. For one, as highlighted above, satisfied customers will interact less. Moreover, customers may not want to engage with such outreach or provide superficial feedback with little actionable value.

However, customer complaints are organic, spontaneous, and purposeful, and are thus more likely, to be honest.

Addressing them enhances your brand image

Introspection and feedback itself aside, customer complaints are good for your business regarding public perception and brand image.

In this regard, consider the aforelinked statistics; online reviews hold undeniable sway over customers. A Podium survey on this found that a massive 93% of consumers are influenced by them, cementing this conclusion. 

In turn, it follows that addressing customer complaints bolsters your brand image. Consider the above research as further proof; customers expect swift responses and effective resolutions. Nothing will reassure them quite as effectively as seeing your brand do so for others before them. 

Swift responses can incite loyalty

Moreover, timely responses specifically incite loyalty all by themselves. 

Of course, following up with further action can only help, but Harvard Business Review finds that simple responses affect loyalty. Specifically, using a Net Promoter Score (NPS), they found that complaining customers that simply received a response “improved NPS by 37 points for airlines and 59 points for wireless carriers”. 

Still, shifting customer expectations may need to inform this metric. For instance, Accenture notes that 75% of customers expect fast response times, while other research places response quality higher than response speed. Thus, you may need to balance the two to best satisfy your specific audience.

Effective responses can reduce churn

Finally, on practical results, effectively addressing customer complaints reduces customer churn, thus reducing customer acquisition costs. Here, SuperOffice finds the following:

• 70% of customers leave due to poor customer service.
• 68% of customers leave a company because they feel it doesn't care for them.
• Yet, 45% of unhappy customers withdraw negative evaluations after a simple apology, and 23% do so after receiving compensation.

Of course, simply responding to complaints will not address these grievances. Rather, what will do is addressing the underlying problems - as highlighted at first. 

But that's precisely where the value of customer complaints lies; in bringing these issues to the forefront for you to solve. Coupled with public perceptions, customer complaints are good for your business because they facilitate data-driven positive change.

Conclusion

In summary, customer complaints present an invaluable opportunity for introspection and growth. Addressing them effectively can enhance your brand image, as other customers see your sincere effort and genuine concern. It can incite loyalty, satisfying your customers' immediate grievances, and reduce churn as satisfaction fosters retention. While complaints may sometimes be unpleasant to receive, remember that they can also act in your favour with due care.