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Using Customer Complaints to Your Advantage

Negative feedback can help you build better customer relationships and a stronger business.

Opinions expressed by Entrepreneur contributors are their own.

Guess what? Whenever a customer hands you a complaint, he's also handing you an opportunity to create a stronger and more profitable relationship with him. That's because complaints that are handled properly can be converted into increased loyalty, add-on and golden referrals for you.

Let's face it-problems do exist, and we humans learn more from our mistakes than our successes. More than one of my customers have had gripes or suggestions related to my company. Initially, my organization wasn't ready to hear the feedback. But over the years, listening to customers has helped me to shape our services so they're easier, better and faster to use.

Save yourself the price of an expensive consultant and put the power of your customers' advice to work. Here's how to encourage them to communicate their comments, feedback and complaints directly to you:

1. At the point of purchase, be it online, in line at the cash register or in direct-mail pieces, provide:

  • Comment forms with a toll-free number.
  • An e-mail link to you personally. Forget about your customer service department for a moment. The idea is to make sure each and every complaint goes directly to you. Let's face it: When you've got a complaint, whose desk do you want your feedback to land on?

2. Answer each and every complaint or suggestion. You can use a simple autoresponder if you like, but I advise against that. Instead, put your personal signature on each response.

3. Acknowledge the comment and tell the customer what you've done or are doing about it.

4. Create a customer user group and pay attention to what they tell you. A long-standing customer of mine in the semiconductor manufacturing business surveyed customers to solicit feedback on existing products for enhancement. Surprisingly, the company received three different (and very unexpected) product complaints. The design engineers quickly went to work. The resulting next-generation products drove enough high-margin, add-on that their stock price skyrocketed from $4 to $44 dollars per share.

The golden rule is this: When customers give you their valuable feedback, make sure they're perked in some special way. Consider a handwritten thank-you note, a free gift or a unique discount. Be sure to tell them that their input is valuable.

Stats show that a happy customer will tell 10 other people of their satisfaction. An unhappy customer will tell 20. Furthermore, it's nine times more expensive to get a new customer than it is to sell to an existing customer. And you know as well as I do that customers vote with their feet!

I'd love to your comments and suggestions about anything that bugs you or is working for you as a result of reading my column. To get additional information on this important topic, visit PsychoTactics. Also, check the listings on for my "Entrepreneur Sales & Marketing Show" (live each Friday from 9 to 10 a.m. PT), which offers information on this and other topics.

To get more of Tony's great sales tips, check out his newest book, Stop Cold Calling Forever: True Confesssions of a Reformed Serial Cold-Caller.

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