Handling Customer Service Problems


“If we don’t take care of our customers, someone else will.” –Edgar Mitchell

Despite your business’ commitment to 100% customer satisfaction, things will occasionally go wrong.  People have bad days, employees make mistakes, and communications break down.  This being the case, you need a contingency plan that will kick into action when all else fails.  You need a safety net to catch any unhappy customers that might fall through the cracks.

What’s your contingency plan?

Always have a safety net to catch any unhappy customers that might fall through the cracks.

Regular mistakes can cause you to lose business, but the occasional honest mistake shouldn’t drive your customers away.  In fact, handled properly, a mistake can create an opportunity to show your customers just how much you care.  The way your company deals with the things that go wrong often makes the difference between a loyal customer and an ex-customer.

Although most unhappy customers never complain, 90% of dissatisfied customers never buy the product again.  Furthermore, an unhappy customer will typically tell at least 9 other people about their bad experience.  That’s why it is always the best policy to take a proactive approach by immediately correcting any mistakes that you catch, rather than letting the little ones slide.

Recurring problems can be managed through systems and policies.  Following your customer service systems, providing customers with more training or answering FAQs can help reduce issues from cropping up regularly.

Random situations, on the other hand, are too unpredictable to fully plan for.  These must be managed on a case-by-case basis.  This doesn’t mean that these problems can’t be solved using systems, but it does mean that the appropriate flexibility must be built in.

Consider the following concepts to reduce the impact of your random customer service problems:

1. Preventative Action

To head off customer service problems before they have a chance to grow, regularly initiate contact with recent customers to find out if they are still happy with their purchases.  A quick follow-up, be it by phone, email, or survey, is often all it takes to draw valuable feedback from customers and enable you to reach out if they are unhappy. 

2. Communicate Bad News Ahead of Time

When you’ve got bad news, it is always better to let your customers know in advance, rather than let them find out on their own.  They may still be upset, but the after-effects will be much less damaging.  Letting your customer know that their order is delayed but that you will personally drop it off the moment it is ready, for example, will cause much less damage to your customer relations than simply letting it arrive late and apologizing for it later.

3. The Customer is Right

Begin your problem-solving process from your customer’s perspective, with the assumption that the customer is always right.  This can be hard to do, but assuming that they are wrong will only make you appear condescending.  This will get their backs up and they’ll dig their heels in that much harder.  Your goal is to diffuse the situation, not inflame it.  Your customer believes they are right, so start there and work towards a solution.

4. Apologize

To show your customer that you understand their point of view you need to empathize with them and you need to apologize.  If you are in the wrong, quickly admit your mistakes and begin the process of repairing any damaged trust.

Saying you are sorry doesn’t necessarily mean that you admit that you made a mistake.  If your customer is in the wrong, don’t go out of your way to prove it to them.  Instead, try saying something like, “I’m sorry this happened to you, I’d feel exactly the same way if I were in your shoes.  What can we do to make it right?”

When you admit your mistakes and commit your resources to resolving them, your customers will respect and appreciate your honesty and integrity. 

5.  Solve the Problem

Focus on solutions rather than on blame. Take the attitude that every problem has a solution, and you will not give up until you find it.  Think of solving your customer’s problem as a joint mission, taking your customer on a search for the solution to their problem.  Solve the problem by offering a fair resolution.  One way to do this is to ask your customers what they feel would be fair.  Given the choice, most customers will respond with a fair and reasonable request.  Acting on your customers’ resolutions goes a long way towards re-establishing trust.

6. Mend the Relationship

When your customer feels injured in some way as a result of their complaint, it may be appropriate to try to mend the relationship by offering something that is of value to them.  A free dessert or appetizer at a restaurant is a good example, but the concept can be applied to any industry.  Set some parameters and empower your employees to follow through.  In most cases the atonement doesn’t need to be overly substantial in order to have a positive impact.  Showing your customers that you care is often more important than the amount that you spend.

7. Use the Information as Feedback

Customers with legitimate complaints are your best sources of information about your company.  They let you see your most pressing problems, up close and personal.  Remember, most customers who are unhappy with your business don’t complain.  They simply don’t come back.  You are then left with the difficulty of guessing what went wrong.  Luckily, complainers are willing to let you know right up front.  It is amazing how many companies hire consultants to tell them what they would have already known if they had only listened to their customers in the first place.


Going forward, you may want to consider some of the following to enable your team to effectively respond to unhappy customers:

Customer Service Training

Teach your employees basic customer relations skills and explore various methods of handling complaints.  By training your employees to problem solve “on their feet,” they will be better prepared to diffuse customer service problems quickly.

Empowered Employees

Customers never like to wait, especially when they are upset about something.  Give your employees the authority to make decisions on the spot and they will be better able to take care of your customers’ concerns without delay.

Corporate Values

An understanding of your basic business values gives everyone on your staff a place to start when faced with an issue.  It will also inform your employees’ decisions, actions and attitudes towards customers.

As Sam Walton says, “There is only one boss.  The customer.  And he can fire everyone in the company from the chairman on down, simply by spending his money somewhere else.”

In today’s competitive marketplace, outstanding customer service is surprisingly rare.  This makes customer service one of the best opportunities around for adding value.  Responding well to an unhappy customer plays a big part in customer satisfaction: how your company handles problems can be a game-changer.  Become a frontrunner in customer service and your company will stand out from the pack in a big way.  

How to Gain a Competitive Advantage in Any Market

Many business consultants will encourage you to keep your focus on the customer, which to a large extent is good advice. After all, you can’t build a business without customers, but is it really as simple as that? What is equally important is to focus on your core competencies: to identify and develop the things your business does particularly well. Your niche, if you will.

Ask yourself what your business does particularly well. Is it the way you manage customer relationships? Is it your ability to innovate in a particular area? Or is it a unique specialization of skills within your industry? Think about the people who work with you. Why are they there? Do they share any unique qualities? If your employees are few, or non-existent, think about yourself, your partners, or the people you would like to hire and consider the same questions.

Your core competencies are not simply your ability to produce a particular product or service, it is the one or two outstanding abilities of your business.

It is better to be outstanding in a few areas than to be average in many. In other words, focus on what you do well.

Building on your strengths can also be an effective way to distinguish and distance yourself from your competition.

For instance when Megan Driscoll founded EvolveMKD, a New York public relations firm, she carved out a niche by specializing in two subjects she knew well: beauty and health care. Driscoll’s decision to specialize led to so much growth in her small company that she had hired 10 employees within its first 6 months to keep up with demand.

Of course, you don’t like to brag, but if you were pushed, you would be able to come up with a few things that your company does very well. You may be masters of marketing, or you may have a secret blend of 11 herbs and spices that really set you apart. When people talk about your company, they talk about these things. These are your core competencies. They are the thing you do that makes you the most money. They make your company special, and your products desirable in the eyes of your customers. You will know you’ve landed on a core competency that can be developed into a competitive advantage if it is:

1. Valuable – it allows your company to exploit opportunities or neutralize threats in the business environment.

2. Rare – it’s a capability that few, if any, competitors possess

3. Costly or difficult to imitate- it’s a capability that competitors can’t easily develop either because they don’t have the ability, depth of understanding, or corporate culture to support.

4. Non-substitutable-Your offering can’t be replaced by another.

According to Leslie Balmorth, COO of Tauber & Balser, “Today, firms need to become famous for the specialized services they provide to remain competitive in the business marketplace.” A core competency especially has the potential to give you a competitive advantage when it is valuable and unique from your customer’s point of view.

Just remember to hold back from developing too many core competencies! You can get stretched thin, and have your focus divided. As Marty Neumeier says, “The three most important words in differentiating your brand: focus, focus and focus.”

Invest your resources into a few areas where you know you can make a good return on them. Identify and develop your company’s niche offerings and watch as you distinguish yourself from your competitors and gain the advantage in your market.


If you want customer loyalty, your business needs quality standards.

Ray Kroc, the founder of McDonald’s was once visiting Canadian McDonald’s franchise and found a single fly.  Two weeks later, the franchise was shut down.

The founder of Mrs. Fields Cookies once tossed out over $500 worth of cookies and temporarily closed a store because its samples were not acceptable.

Colonel Sanders, the founder of KFC, once destroyed his proprietary cooking ware on the spot at a franchise that was not operating up to his standards.

What does quality control mean to your business?

Your first goal must be to meet your customers’ minimum expectations 100% of the time.  Fall short, and you may not get a second chance.  Your customers want to know that they can depend on your products and services to be everything they expect them to be; each and every time they use them.  From your customers’ perspective, quality means ‘dependability.’

Building customer loyalty demands that you consistently delight your customers.  Set your own minimum standards higher than your customers’, and then continuously raise the bar on quality.  Not only will your customers be pleasantly surprised, they’ll be induced to return to your business.  As J.C. Penney said: “It is the service we are not obliged to give that people value the most.”

Raise the bar on quality once, however, and you must never lower it back down.  Once your customers experience an improvement from your business, they will begin to expect it.  Anything less after that can shake your customers’ confidence in you.  This shouldn’t be a problem, if you take the time to properly prepare.  Make improvements to your business through rock solid systems, and they will stick like glue.

Build Loyalty.  Set your business minimum standards higher than your customers'.

Incidentally, maintaining the improvements you make to your business must go well beyond quality inspection checks.  Inspection checks are useful, but they only deal with symptoms.  True quality control will mean getting to the root of problems when they arise.  Tools that help track data within your business can be helpful to highlight elements that may not be performing to standard.

I like how H. James Harrington sums it up: “Measurement is the first step that leads to control and eventually to improvement.  If you can’t measure something, you can’t understand it.  If you can’t understand it, you can’t control it.  If you can’t control it, you can’t improve it.”

Keeping strong, lifelong customer relationships takes more than a smile and a friendly handshake, it takes consistent effort.  The effort your company puts into maintaining quality standards will be rewarded by your customers’ loyalty; an investment that is well worth the effort in the long run. When your customers can depend on the quality of your service or product they will trust the integrity of your business.  Hands down, this is the most valuable way to make a sale.  Gaining the loyalty of your customers and their network can mean multiple and ongoing sales, ultimately growing the bottom line of your company.




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