3 Ways to Win Back Unhappy Customers

by Karl Walinskas

How can you win back customers after they've been disappointed by your product or customer service? Here are 3 solutions that work to regain customer loyalty and confidence.

customer recovery
Image source: Photospin.com

If you’re like me, you make a study out of the customer service you receive on a daily basis. You study it, analyze what’s happening, and try and learn from the good, and especially the bad. You see, poor service allows us to say to ourselves, “Wow! I’ll never do that with my business.” The best part is that some of the time, that statement turns out to be true. What about customer service recovery procedures?

Here’s what I’ve found in studying the literature on customer service. There is plenty of material published on best practices and companies who excel in doing things right--going the extra mile, loyalty bonuses--it runs the gambit. What I don’t see are customer service recovery practices to bounce back my own mistakes. How should I behave when my company hasn’t delivered, when I have dropped the ball?

RELATED: 7 Signs You're About to Lose a Customer

Painful experience tells me that this stuff isn’t common knowledge. Many companies simply walk away, effectively firing the customer, when a recovery strategy could earn their loyalty for years. They simply don’t have any customer service quality practices to follow.

I’ve developed three tips so that when your company finds itself in the unenviable position of having egg on its face, you wipe it off and gently dab with a napkin instead of adding ketchup and salt and making an ugly situation even uglier.



1. Own the mistake.

One thing that drives customers nuts and totally discredits you is to get defensive and blame everybody but your company. You spilled the milk, and you’re not only crying over it, you're blaming the cow. Empathically put yourself in the customer’s position. She hired or contracted with you and doesn’t want to hear about your problems with suppliers, delivery trucks, or acts of God. When you took her money you became responsible for the total solution, so behave like it. This is basic to customer service procedures to resolve customer complaints.

I had a 1993 Ford Explorer back in the late 90s, and if you remember the consumer news in that period of time, you know that this model was one of the vehicles with the notorious Firestone ATX tire stock from the factory. I picked up the car used and had Goodyear tires on it, so I was in the clear. Regardless of what you think of either Ford or Firestone as companies and irrespective of the purity of their motives, I was pleased to get a warning/recall notice from both Ford and Firestone. Each, I assume, dug my name out of registration records and contacted me. The Ford letter did not blame Firestone and make an excuse and then tell me to contact Firestone. No, Ford told me if I had those tires on my car to bring it in and they’d replace them. The Firestone letter said something similar, and even though I wasn’t Firestone’s customer (Ford was), I was an end user of their product and they stepped up and took ownership of the problem.

Contrast this to the company, who shall remain nameless, who was responsible for the high speed DSL line installation at my offices. I was told I’d have the connections in four weeks; it took in excess of six. I had to send new employees home to telecommute off their AOL connections because I couldn’t provide Internet access and email--not exactly a desirable situation for me. This same company demonstrated the same state of chaos on the phone line cutover. There was no hesitation to enroll me in the plan and contract for my business’s money, but ask these jokers about the problem and the answers were astounding. It’s Verizon’s fault, because they didn’t cut over the lines, or they didn’t bring them into the building. We had a snowstorm last week. My dog ate my homework. This company seemed bent on convincing me it was “out of their control.” Did the customer, me, give a rip? If you are whom the customer pays for the product or service, it’s ALL within your control. Don’t make excuses, provide solutions. Most of the time you can do this right over the phone.

2. Solicit the customer’s recommended action.

This is incredibly simple but ignored so often. Ask the customer what they would like you to do to make them whole again. Empower the customer with part of the solution. Make him part of the team, not an adversary. Remember, this guy is torqued off and he has definite ideas on what you should do as a remedy.

Customer recommendations are great for two reasons; first, making the customer part of the solution takes the edge out of their complaints, and second, you just may find answers that you weren’t aware of or that are less painful to your company than your solution would be. Businesses that excel in customer service solicit these opinions and, if at all possible, implement them. At least they listen.

Worst-practice companies reach for the rulebook and break out the magnifying glass, then call the soon-to-be-ex-customer to the fine print that exonerates their company in the unlikely event that they fail to deliver on the promise. Lawyers tell the company that this is great; it saves the company from the downside. Well, lawyers are usually called in when a situation is spiraling out of control, not during the building stages of your business.

I’m dealing with a software vendor right now who has not delivered on the promise to my company. Oh, they’ve tactically done most of the steps I suppose, but the perceived quality and value for the money is not there, and they know my company feels this way. Instead of asking me how to provide a remedy, they point me out to their contract, one to two pages of which talks about the deliverables for the project and four to five pages of legal, fine-print boilerplate that tells me stuff like how any hours spent past 30 minutes roll to another full hour. Ain’t that just peachy. They’re so worried about being compensated for every last minute that they don’t even see me pulling up my roots and taking the long-term solution to my business need right out the door to another company, blocking the former business from tens of thousands in future revenue for upkeep and upgrades.

A better example is my friend Tom at T&F Tire Co. in Kingston. He verbally quoted me (no legal document) an hour’s work to fix an electrical problem on my watercraft trailer lights a couple of years back. Three hours later it still wasn’t fixed. He apologized and asked me what to do, to which I responded that I’d like not to have to pay for 3 hours of labor on an unsolved problem. No hesitation, I was charged for ½ hour of time. Now it cost Tom real time and money to diagnose this problem, but he didn’t pass it along to me because I didn’t think it was fair. Tom’s business makes about one-thousand dollars per year directly from my wife and I, yet he was willing to part with a few hundred bucks easier than a software company that made 100 times that amount off my company in six months. I can’t tell you how much money Tom’s business has earned from my referrals and articles and sales CDs that talk about him in a positive light. I can tell you how many referrals the software company will get. Would you like to hazard a guess?

3. Make it right--and then some.

At some point, you eventually have to deliver on the promise. You might be late or over budget, but the bottom line is that you’d better ultimately make it right. The problem is that this is where most businesses stop. You see, they promise X but X was tougher to deliver than they thought, so after a while the customer gets poor X--tired, disheveled, and late. The savvy business owner knows that for whatever reason he has been inconvenienced in trying to bring about the elusive X, the customer has been more inconvenienced. This best customer service practice company delivers X+ something else. This isn’t an algebra class, but it really is that simple.

When the mower breaks and the customer returns it under warranty, you of course give her a new one. How about adding a coupon for gas or oil for the mower? The blouse stitching came apart? Try giving the person who returns it two blouses. Is this making sense to you yet? Give the lady one blouse and she says thanks and probably doesn’t shop at the store anymore. After all, they sell defective blouses. Giving her two costs the company an additional 20 bucks (depending on where you shop, I know), but earns that customer’s loyalty. She’ll not only shop there again, she’ll tell five people, three of whom will shop there too. The important thing is that you provide the bonus for her trouble voluntarily, without being pressured by repeated customer complaints. As a business owner, get your head out of you’re a...ccounting balance sheet (what did you think I’d say?) and trust your gut. How do you behave when someone you do business with turns a problem into an unexpected, pleasant surprise? So do other people.

Author Tim Ferris of The Four Hour Workweek talks about this very thing in terms of what he calls a "Lose-Win Warranty" for your products, where the customer, in the event of a mishap, gets more than their money back.

So there you have my three simple rules for turning a fumble into a touchdown, customer service recovery procedures that work. Take ownership of the problem, solicit the customer’s remedy, and over-deliver on the results, and you’ll almost... almost... look forward to dropping the ball so you can be a service hero to your customers.

Find more great non-traditional marketing tips at the Smart Blog. Post your case-studies you might find yourself in the next post. Karl Walinskas runs Smart Company Growth, a management consulting firm for small companies. His books, audio and other cool stuff can be found at the Shop Smart link.

 
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