By Graeme Crossley, CEO of brand communications agency Brand Reputation.
Complaining customers have the potential to become a Brand’s greatest advocate, so why aren’t brand owners doing more to ensure that their customer service is hitting the mark?
We all know that bad news travels fast and in the current climate where customers are justifying every pound they spend, Brands should remember the importance of a good customer complaints resolution strategy in creating a loyal and solid customer base, good referrals and a consistently strong brand reputation.
Recent research has revealed that over 70% of customers would walk out of a store and into a competing store if they experienced poor customer service.
With reports suggesting that one dissatisfied customer will tell and average of thirteen people about their poor experience, brand owners need to recognise the importance of tackling customer complaints effectively as a route to increasing brand reputation.
I often find that brand owners fail to understand the link between customer service and reputation. How customer complaints are handled can have a significant impact on brand perception and is an opportunity, if handled correctly, to turn complaining customers into advocates for the Brand.
The situation with a particular Energy company several months ago is a classic example of how brand reputation can suffer due to poor customer service and customers complaints not being handled correctly.
Like any other commodity, customers can purchase their energy from a number of providers and thanks to comparison websites, the majority of customers have become perpetual ‘switchers’, simply moving onto the next deal that saves them money because they have no other way of differentiating between suppliers.
As a result, energy brands are consistently having to attract new customers, simply to replace those leaving in droves in search of the next money-saving deal.
For these companies, having a sound complaints process should be a critical component of their brand reputation strategy but is rarely a top priority and so customers continue struggle making purchase decision based on anything but price, which is a highly risky strategy. Remember, there is only ever one winner in a price war.
Perhaps one of the biggest reasons to focus on customer complaint resolution is the speed at which complaints can be spread across the web, often in real time, thanks to social media tools and online forums.
Experience shows that customers who have had their complaints resolved can be more loyal than those who haven’t experienced a problem at all if the complaint is handled in the right way. Brands need to realise the value in fully solving customer complaints and using the opportunity to create brand advocates.
Social media advancements mean that brands need to increase their focus on customer service levels, given that news can be broadcast immediately by the customers themselves. The danger of brand damage has increased fourfold and brands need to ensure that their customer service levels stand up to customer expectations both in good times and in bad.
I often find that many Brands are unaware just how many consumers make ‘Google Enabled Choices’ when making important purchasing decisions. These customers rely heavily on web reviews to aid their purchase decisions, with some opting to have no contact whatsoever with brands offline prior to deciding to buy.
Brands need to recognise that the online world has much more power than they realise and can often be the only resource a consumer needs when evaluating which brand to buy.
We are seeing more people making purchase decisions on high value items such as cars and electronic equipment based purely on online reviews from other customers and this is a trend which will only get stronger.
But what is the impact of this trend? You only need to look at a recent survey by Lightspeed Research, which revealed that 71% of all respondents said they would read a review before making a purchase decision about a new camera, MP3 player or mobile phone and 33% of respondents said they would be dissuaded from buying a product after reading just two negative reviews.
Over three quarters of respondents also said they would be deterred from buying after reading three bad reviews.
It is clear that brands need to become more vocal online, interact directly with consumers in the places where they are most active and tackle the issue of negative comments proactively, rather than 'burying their heads in the sand and hoping the noise will die down'.
When you think of the huge budgets that consumer brands spend on campaigns, the fact that the views of just two individuals could undo so much of the brand messaging shows why brands need to take customer service seriously.
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