Bill Gates Says Unhappy Customers Are Good for Your Business. Here's Why. Learning why your customers become unhappy teaches how you can improve the customer experience and build loyalty.
By Anita Toth Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
"Your most unhappy customers are your greatest source of learning." — Bill Gates
A while back, I was using software that drove me crazy. I was so happy to stop being a customer that I secretly did a little dance in my head. I had become their customer just a mere three weeks earlier. When I purchased this software, I was excited because it was going to help me to prospect for more clients.
What I didn't realize was that it would take me nearly 10 days to get my account set up to the point where the advanced features I needed were working properly. As one day grew into the next, I was becoming more and more unhappy with this software.
My unhappiness was rooted in this: I had bought the mid-tier plan and the emails I sent to support were only being answered every 24-48 hours. If I wanted faster support, I would have to pay more than double what I was paying now because only the highest tier plan had same-day support. But I didn't need the features available on the highest tier. Those features were so advanced that it would be like buying a rocket to get to work. The features in the highest tier plan were way beyond the capabilities I needed.
I quickly started to dislike and then hate this software. In a short two-week period, I went from excitement to dislike to full-out contempt. By the end of my 30-day payment period, I was more than happy to ask them to delete my account. I couldn't wait to become an ex-customer.
Unhappy customers cost you money
Unhappy customers cost you a lot of money. Ask any consultant or coach who takes on a bad client how draining it can be. They demand more of you. They are hard to work with. They take more time and effort to please. They are emotionally draining.
Businesses also experience heavy costs from unhappy customers. Just like with consultants and coaches, unhappy customers demand more. They contact customer support more frequently. They aren't satisfied with the solutions you offer them. They escalate issues.
When you have a lot of unhappy customers demanding limited time and limited resources, the financial cost can be big—from hundreds to hundreds of thousands of dollars.
The faster you can reduce the number of unhappy customers you have, the better it is for your business. (Keep reading to learn how to do this.)
Related: 5 Strategies to Keep Your Customers Long-Term in 2020
Unhappy customers lose you money
Have you ever read a bad review for a product or service you're considering buying that was so persuasive that you decided not to buy? I've done it. These reviews are from unhappy customers who are more than happy to share with the world about their crappy experience. One negative review can dissuade a prospective customer from buying by as much as 22%. If prospective customers find three negative reviews, the potential for lost business increases to 59.2%.
Related: 7 Amazing Ways to Build Long-Term Relationships With Your Customers
Unhappy customers show you opportunities
Unhappy customers give you one thing that happy customers don't--an opportunity to see where there are issues in your business. Happy customers don't share what they're unhappy with. But unhappy customers will tell you exactly why they're unhappy.
Customer onboarding is one of the biggest areas where happy customers quickly become unhappy. Too often, companies skip critical steps in the onboarding of a new customer. Or the onboarding process is so complex and difficult that customers abandon the process. Either way, customers become frustrated and unhappy.
3 ways to stop happy customers from becoming unhappy ones
- Better onboarding
Create a more helpful onboarding process. Let customers know what they can expect during the onboarding process including any bumps they may experience during their onboarding. In your communications with new customers, include links to videos and articles from your knowledge base that they can easily access when they hit those bumps. This saves your customers time from searching for answers themselves. It also reduces the likelihood they'll contact customer support to help them solve the issue.
- Better alignment
Interview and survey newly onboarded customers to find out what they found easy or hard about the onboarding process. Ask questions around their expectations and their actual experience. Was the onboarding process what they expected? What did they find the most difficult? What would they change? What was missing that would have made their experience better? What did they find confusing? Compile and analyze your customers' answers. Then look at your onboarding process to make changes based on what you find.
Related: 3 Strategies to Improve Your Customer Service Experience
- Better customer support
Interview and survey customers reaching out to customer support for the first time. Ask them about their first-ever experience with customer support. What did they like? What didn't they like? What do they like about how other companies offer customer support? Compile and analyze your customers' answers. Make changes to your customer support processes based on what your customers shared about their customer support experiences.
Dealing with unhappy customers can be hard, especially when your business is small. But you can learn so much about why your customers become unhappy and what you can do to improve the customer experience so that more of your customers want to stay.
The key is to speak with your customers at critical points in their customer journey when they're most likely to become unhappy – during onboarding and in customer support interactions. Surveys and direct interviews will yield you valuable information that shows you the specific areas where you can improve the customer experience and reduce the risk your customers will become unhappy.
By focusing on improving critical parts of the customer journey where customers are most likely to become unhappy and making changes based on what your customers tell you, you'll quickly see the impact with increased revenues, increased loyalty, increased positive word of mouth mentions in social media and increased referrals.
