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Ignoring Customer Complaints Costs Sales and Cashflow

Kim Radok22 June 2012

IGNORING CUSTOMER COMPLAINTS COSTS SALES AND CASHFLOW

Customer complaints are valuable customer interactions; if viewed correctly.

There are undoubtedly those business people who consider all complaints a waste of time, a hindrance to future sales or a customer trying to slow down their payments. Whilst there is some truth in all these statements, many business people also miss the message of the complaint itself.

Yet even in these situations where the complaint is considered in the negative, there is one positive. The customer is still willing to talk with you. If the customer stops talking, then your business is in trouble and therefore must ultimately, affect your sales and cashflow.

TAKING THE NEGATIVE AND MAKING IT A POSITIVE

Let us take the other view for a minute. From a positive perspective, every customer complaint is an opportunity to engage with your customer. Furthermore, if we consider this situation from an adult learning perspective, we would view every customer complaint as a valuable learning event.

To paraphrase one wise adult educator, "Every mistake (or customer complaint) is a fruitful learning situation". A mistake only is only a mistake, when it keeps re-occurring or nothing is learnt from the mistake.

WHY IS A CUSTOMER COMPLAINT SO VALUABLE?

The main reasons customer complaints are so valuable include the following factors.

1  They reinforce the message; the customer is willing to engage your business about issues of concern to them.

2  Every complaint raises an issue which may indicate your business's sales processes are not as perfect as they could be.

3  Each complaint is an opportunity to talk with the customer about the issue, and possibly, to increase sales during the discussion.

4   If the customer account proves to be frivolous, the customer is indicating they may be trying to slow pay you.

HOW DO CUSTOMER COMPLAINTS COST SALES AND CASHFLOW?

Using the same examples above, here are possible sale and cashflow loss situations or where unnecessary expenses are incurred. Cashflow is lost for two reasons: not making sales and/or not being paid.

1  If customers are contacting your businesses about problems, your business is not paying the cost of the contact. Likewise, if the customer stops contacting your business, you need to make resources available to contact the client, whilst missing out on their payments.

2  How do you know if your sales processes are adequate, or as good as they can be if there are no complaints? Being positive again, customer complaints are the equivalent of an unpaid audit test. Each complaint is therefore a warning of a potential problem that needs correction

3  Every opportunity you take to engage with a customer is another marketing or sales opportunity. I know there are quite a few businesses where employees never talk with their customers about new products and services. They are they are too busy doing other work. These businesses therefore rely on the customer asking the question about new products and services. However, you cannot sell if your customer does not ask the question.

4  If customer complaints turn out to be frivolous, then you can act quickly to reinforce the fact you need to be paid. Customers are unlikely to pay if you do not answer their complaints. Frivolous customer complaints are another warning sign of a customer with cashflow issues or a desire to slow pay your business.

In conclusion, every customer complaint is of value, if viewed properly. A failure to respond to customer costs your business SALES and CASH in four ways.

First, an unresolved customer complaint delays the customer's payment.

Second, if the customer that has outstanding enquiries which remain unanswered has been placed on stop supply for the non-payment, sales are lost.

Third, if a customer is sick and tired of your mistakes or the non-resolution of mistakes, they take their business elsewhere.

Fourth, a customer complaint which is a process problem and is not resolved; continues to add to expenses unnecessarily.

As the tile of this blog says, "Ignoring customer complaints costs sales and cashflow."

May you be paid today rather than tomorrow

Kim Radok

kim@creditmatters.com.au

www.creditmatters.com.au

 

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