When customers have a problem, you’d think that would be the main thing they cared about. But new research suggests one thing is more important.
How you take care of the problem.
The way they see it
“Customers care more about how companies handle their problems than about the existence of the problems in the first place,” say Gallup researchers John Timmerman and Daniela Yu, who recently completed The Silver Lining of Customer Problems study.
Almost 60% of customers have had problems — and had to reach out to customer service for help — in the last six months, the Gallup study found. And, it turns out, they’re the customers who are more likely to be loyal.
When front-line employees handle problems effectively, they usually help the company dodge customer badmouthing and broken loyalty. They actually end up increasing customer engagement.
Customers who don’t experience problems — along with the company’s rebound — are engaged, but not at the level of those who had problems that were well-handled.
What a well-handled problem looks like
But what is a “well-handled” problem in the eyes of customers?
Gallup found that these three factors have the biggest impact on whether customers felt their problem was well-handled:
- incident rate (the number of times this or a similar problem happened and/or the number of times they had to reach out for help)
- severity (how badly the problem affected them), and
- resolution satisfaction (how happy they were with the solution).
Here’s how you can positively affect each factor.
Incident rates vary by industry. For instance, there are many more customer problems in the retail industry than there are in the social assistance to healthcare industry. But the severity is low in retail and high in healthcare.
The key to reducing the rate of issues is follow-through. A problem-resolution process is practically useless if there’s no plan to close the loop. Once issues are resolved, someone or something needs to look for the root cause and eliminate it.
One organization, that follows Six Sigma principles of quality, practices the “5 Whys.” If you don’t do it formally, you can informally to help dig up root causes and eliminate them when you see patterns of customer problems. Simply put, you ask five (or more) “Why?” questions (Why did X happen?, Why didn’t Y happen?, Why didn’t we see Z?, etc.), each based on the previous question’s answer, to uncover the issue. You can get more details on the benefits of the 5 Why Process and how to do it here.
Not surprisingly, customers who experience minor problems are willing to come back. But customers who have moderate or major problems are not likely to come back, the researchers found.
So how can you minimize the severity of any customer problem? Know your weaknesses.
Rarely is a company good at everything. Regularly audit your processes to find out where the most frequent mistakes happen. Big mistakes are more often the result of faulty processes or a counterproductive culture than they are caused by a single employee or incident.
Researchers found that more than 90% of customers felt satisfied with the outcome after a problem when:
- the company (or an employee) took ownership of the problem
- the company made the customer feel valued and trusted
- the issue was resolved quickly, and
- employees expressed sincere regret.
Very few customers said restitution or compensation satisfied them. So your resolution process and efforts need to focus on the four factors that affect how customers feel.