28 Mar 2023
Create an Effective Customer Complaint Handling Procedure
Written by Doug D'Aubrey

Nobody enjoys receiving complaints. However, handling complaints is crucial to maintaining customer satisfaction, managing your reputation, improving your business, and increasing sales opportunities.

Ignoring complaints or handling them negatively will likely damage your business in two ways:

  1. Customer dissatisfaction: Customers may feel insulted or undervalued. This can lead to decreased customer satisfaction and even loss of business.
  2. Missed opportunities for growth: Complaints can highlight areas where your business can improve and even opportunities to add new services/products to sell.

Dealing with complaints is an inevitable part of running a business, but it doesn’t have to be daunting. In fact, if handled well, it can actually improve your business reputation, customer loyalty and sales.

Here are some simple steps you can follow to handle complaints effectively:


One: Create a clear complaint channel

It’s important to ensure all complaints are captured. Complaints can come in through various channels, such as email, phone, review platforms, online forms, or social media. Therefore, you need to ensure either all these channels are monitored or you need to direct customers to your preferred or ‘official’ way to make a complaint.

It’s usually best to nominate one person in your organisation to take the lead in managing complaints. This lead person doesn’t necessarily need to handle complaints themselves, but they should be ultimately responsible for ensuring procedures are resolved, the customer is informed, and records are kept.

It’s also a good idea to include expected reply/response time and outline any formal procedures for customers to help set their expectations. Customers might become more agitated if they feel their complaint has been ignored or fallen into a black hole. Automatic replies are a quick way to acknowledge receipt and explain your company process.


Two: Establish a complaint handling procedure

Depending on the size of your business, you could receive the complaint directly as a business owner or members of your staff could be on the front line. Regardless, you should establish a clear complaint procedure. This will ensure complaints are:

  • responded to in a timely manner;
  • recorded/logged;
  • handled consistently and fairly across the business.

A complaint procedure will give everyone in the business the confidence to handle complaints. Procedures can help to defuse your defensiveness as a business owner and ensure staff aren’t left sounding uninformed or inexperienced (deer in headlights).

A complaints procedure should include the following stages:

  • Acknowledgement of the complaint
  • Recording of the complaint (either on a system, Excel or Google Sheets) accessible to all relevant persons within the business
  • Investigation
  • Resolution/Answer/Escalation
  • Documentation of outcome
  • Follow-up
  • Review

Including these elements will ensure that complaints are handled consistently and effectively.

Top tip: You should always respond to a complaint as soon as possible. You do not have to have a resolution or outcome straight away, but ignoring a complaint can escalate customer frustration. If there isn’t an easy response, you can invite the customer to contact you for more information or let them know you need some time to investigate.

If the complaint is in public view, such as on social media, the best practice is to publicly acknowledge the complaint and ask the individual to contact you privately. It’s highly recommended not to try and resolve things publicly or to delete the feedback.


Three: Training

Training yourself and your staff about how to handle complaints effectively can have a dramatic impact on customer satisfaction. This training should include the complaint handling procedures and how to communicate with customers.

Your overall aim should be to respond to the complaint as quickly as possible and work with the customer to resolve the complaint to their satisfaction.

If you have a customer support team, you should consider training on active listening, empathy, and developing their problem-solving skills.

Effective complaint handling can have the following benefits:

  • Improved customer satisfaction: Staff who are trained in complaint handling are able to resolve them in a timely and effective manner. This can lead to improved customer satisfaction and loyalty.
  • Increased staff confidence: Trained staff will feel more confident when communicating with customers and handling difficult situations.
  • Better customer relationships: Handling complaints effectively can help build better customer relationships.
  • Reduced complaints: Staff can identify and resolve issues before they become formal complaints. This can help to reduce the number of complaints received by the business.
  • Improved business reputation: When complaints are handled effectively, it can improve the business’s reputation and demonstrates that you care about your customers.


Four: Complaint tracking and reporting

As a small business, it’s likely that as you grow, take on more staff and expand your services, you will receive more complaints. While not the most enjoyable task in the business, it is important to understand where you might be going wrong – in the eyes of your customers.

Tracking and reporting on complaints be used to identify opportunities for improvement, ensure complaints are being handled effectively and measure success in your business performance.

It is important to set regular complaint review meetings with key stakeholders in the business. This is typically done quarterly. This dedicated time will allow you to investigate your business to identify areas to improve and prevent future complaints. It will also help you outline changes or processes needed to prevent further complaints.

Top tip: You should always try and handle your complaint review process objectively. Firstly, try looking at the complaint from a macro perspective as well as trying to solve the individual problem. Consider that not everyone complains openly; some customers will have the same issue, but simply stop using your products/service. Has one person complained but it is an indicator of a larger problem?

Secondly, understand the scale of the problem to determine if a solution is financially viable. For example, you might not want to spend a fortune restructuring your business if only 1/100 customers complain (a 1% issue) – you may want to consider a more cost-appropriate solution.


Five: Follow-up and feedback

Often forgot, but following up and asking for renewed feedback is a crucial step in the complaint-handling process. There are two critical reasons for making sure you follow up:

  1. You can understand if your solution was appropriate
  2. You can share your resolution success with others

After a complaint has been received and resolved, it is important to follow up with the customer to ensure that they are satisfied with the resolution. This can help you identify if your solution was the right for the next time or make adjustments if needed.

In addition, by only focusing on the original complaint, staff and potential customers can become disenchanted with the brand. It’s important to celebrate your growth and demonstrate your dedication to your customer satisfaction.

Top tip: Ensure you include staff in your complaint resolution progress. If front-line staff are only hearing the complaint, but the solution is handled by another team, they might not be aware of the resolution and only hear the negative.

This is true for customer complaints online. Whenever possible try and encourage customers to respond to their own reviews. Potential customers are comforted by seeing a response to a problem. It will make them feel that if they have a problem too, they will be heard, and a solution will be found.


In summary: How to handle complaints

Complaint handling is an essential aspect of running a successful business. Handling complaints effectively can lead to improved customer satisfaction, loyalty, and a better reputation.

In summary, efficiently handling a complaint consists of the following steps:

  1. Provide clear channels for customers to complain
  2. Respond to the complaint as quickly as possible
  3. Work with the customer to resolve the complaint to their satisfaction
  4. Investigate your business to identify areas to improve and prevent future complaints
  5. Implement changes or processes to prevent further complaints
  6. Keep the customer informed when changes have been made
  7. Record and review complaints to analyse trends (suggest quarterly)

By taking these steps, businesses can demonstrate their commitment to customer satisfaction, improve business performance and increase sales opportunities.


How ETC can help

If you need help streamlining your business operations and improving your return on investment, please get in touch.

If you are new to ETC, why not contact us for a free new business review? We’ll spend two hours with you, giving you professional coaching and will leave you with actions for immediate implementation.