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Customer service stats

post #1 of 8
Thread Starter 
I'm cleaning out files and came across this tidbit I wrote on a sticky note:

For each customer who complains about a product or service, there are 15 to 26 more who are also unhappy but will not tell you about it. And it takes 5 times more time, money, and effort to obtain a new customer than it does to keep an existing one. Further, every satisfied customer will influence 2-5 others.
From David M. Kohl, Weighing the Variables, p. 9.
post #2 of 8
some academics have absolutely no problem going way out on a limb, turning around, and proceeding to saw the limb off the trunk.

**if Kohl isn't an academic, please replace "academic" with the title appropriate to Kohl.
post #3 of 8
Yes, this is traditional marketing knowledge. However, there is a current "exception" trend being practiced by some companies. "Serial" complainers are getting their source of free goodies cut off. For example, some retailers are limiting the number of returns that they will take from a specific customer.

I have seen this happen at our ski school. One regular lesson taking customer was also a regular complainer and had very specific requests for service which basically amounted to requesting a private lesson for a group lesson price (from management's perspective) or amounted to only accepting lessons from the very best instructors on staff as being of acceptable quality (from the customer's perspective - you reading this Stache?). This customer ended up being told "this is what a group lesson is, what you are asking for comes only with private lessons" (i.e. no more free retakes). A first time complainer with the same complaint is likely to get a free lesson retake from a higher quality pro.
post #4 of 8
rusty, if somebody is a regular complainer, does that automatically mean that their point is not valid?

Could it also mean that nobody is actually fixing the problem?
post #5 of 8
Thread Starter 
I thought it was interesting that there are so many who suffer in silence. I suppose they just quietly take their business elsewhere, and the offending company never learns why they're one customer short.

Maybe with feedback, like publicity, there's no such thing as bad, and product manufacturers and service providers should be thankful for the people who do speak up with a complaint.
post #6 of 8
A chronic complainer can be individually dismissed.
However, a chronic complaint from many different individuals is a real red flag.
post #7 of 8
yes and no O lurking bear.

In the retail customer return case that I read about, customers were purchasing with no intent of permanent ownership (e.g. averaging over 300 returns of clothing articles per year). They were abusing customer friendly policies and in essence getting premium level services at normal prices. This in essence was forcing the bulk of the retailers customers to subsidize the abuser's wasteful shopping habits. However, the article I was reading about also included a story of a customer who returned only a small percentage of what they bought who got hit by a limit of returns that was a very bad thing for the retailer to do.

If a customer is assigned an instructor for a group lesson and the response from the customer is "No, I don't like that instructor, I will only accept instructor y or z", is this a problem that needs to be fixed?

I had an interesting experience with a well known pizza company. They were all a tizzy because some stores were getting customer complaints about the pizza sauce being too spicy. I tasted the suspect sauce. There was nothing "wrong" with it. But it was subtly spicier than the quote standard unquote sauce. If you have any knowledge of the difficulty of getting millions of gallons of pizza sauce to taste the same year after year when the tomatoes themselves have different tastes every year and taste different depending on where they come from, such complaints seem laughable. Nonetheless, that was the standard of the company and every complainer got free pizza and crap hit the fan until the problem was discovered and fixed.

Unfortunately, minimal acceptable quality of ski instruction is pretty hard to define. Most resorts will use a higher than average number of complaints (or injuries) to help identify which instructors are not delivering a quality lesson. But when you get a markedly higher than average number of complaints coming from a specific customer, looking at the source takes on a different meaning. Nonetheless, as a trainer and part time "Stupidvisor", my experience is that there is an attempt to evaluate and improve instructor quality outside of the complaint system through clinics and direct observation of lessons. If a complaint comes in about a pro on the "Watch" list, there will be less questioning about what the problem was.

The reaility is that some pros are better than others. Buying a group lesson does not entitle one to a guarantee of lesson quality equal to what the best instructor on staff would deliver. It's certainly possible that the least skilled pro on staff can deliver the minimally acceptable quality of lesson that the resort can guarantee. I would think most ski school directors believe that of their staff. Nonetheless, on any given day any given pro can make a mistake that would entitle a guest to ask for and receive a do over (I can think of 45 guests from one of my lessons who were kind enough not to do so). Given the "gray"ness of what is good or bad (e.g. depending on the students 10 people can be a good class size or 6 people can be too many), erring on the side of responding to customer complaints, but cutting off chronic complainers is not so bad as long as you make sure that the pro is not the real problem. But it's still a judgement call.
post #8 of 8

It's very hard to look at feedback with the idea of "no such thing as bad". I once flunked a job interview over "the customer is always right". My view is even when they are dead wrong, you need to find a way to tell them they are right. Yet, I'm sensitive to the marketing advice that some customers may be bad for your business (e.g. you may need to "fire" a customer). Sometimes customer feedback of what you need to do is very bad for your business. Per Weem's idea of getting the positive out of everything, there's nothing wrong with cheerfully recieving the feedback and using it. The trick is how you use it.

So in that sense, all feedback is good, up to a point. If you've got a 100 customers and 20 say the same thing, listening to the other 80 is mostly a waste of time. I once tried out a golf course for the first time. On the fourth hole I played, the pin was placed such that from the center of the green if you did not putt perfectly the ball would simply roll back to the center. I was playing 2 balls and each took me over 8 tries to hole out with misses of inches to 3 feet always "resetting" back to 20 feet away. As any golfer would recognize, this is simply not acceptable, even for tournament golf. I was still steaming when I made the turn (went by the clubhouse from the 9th to the 10th hole). I guess I managed to hide it well enough, because the manager casually asked me how things were going. While I was taking a moment to compose a civilized response, the manager interrupted by saying "we've already fixed that" without me ever having to tell him what the problem was. At the end of the round, the manager again asked how I liked the course. When I explained that I did not enjoy myself and for other reasons besides the bad hole and that I had no interest in returning, he calmly made an impromptu "free round" certificate out of his business card and gave a very short sales pitch of how the course was good enough for another try. The lesson here was that after enough feedback was received, they did not need to hear any more complaints about the problem, they only needed to determine who the problem effected and address that. They used one type of feedback to solicit an even more valuable type of feedback.

Oftentimes when a customer makes a complaint about a problem with your product that you know for sure does not exist, it's only natural to get defensive to protect your reputation. It's very difficult to say to the customer "I agree you have a problem and that you are using my product. I'm willing to help you resolve the problem, but if the problem is truly not caused by my product I need to be compensated for my efforts."
In my golf story above, the bad hole was an immediate showstopper for coming back, but having them acknowledge that it was serious enough to fix immediately made up for that. But the foul mood I was in made me see the rest of the challenges of the course as rediculously annoying bad things. That was my showstopper for ever paying for a return visit. Without the bad hole experience, would it be right for the course to offer a free return trip simply because I did not happen to like the challenges? All golf course are supposed to have challenges, and these particular challenges turn out to be what creates "charm" for this course. What are they supposed to say when I tell them I don't like their charm (e.g. having huge trees in the middle of the fairway)? Is it my problem or theirs? Hard to say. But only because they solicited feedback, this is now one of my favorites. Because they were willing to work with me, I discovered that the problems I had with this course were my problems and not theirs and they are being compensated by my return visits.
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