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Gaining Customer Trust – Part V: No One’s Perfect – How Handling Problems Can Build Trust

learn from your mistakes
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For our fifth and final post on the topic of gaining customer trust, we wanted to explore a related topic to last week’s post on customer experience: customer service. Good customer service is obviously key to getting customers to trust you, and it is a topic that has been written about quite often. In today’s blog, I want to approach the topic from a different angle and talk about not basic customer service – but the importance of how you handle problems and mistakes.

I doubt anyone likes to make mistakes or have any problems in their payments business, but let us be realistic. They happen! Your cardholders are human and fallible. Unfortunately, problems are not only inevitable; they can also be very costly. They can cause operational costs to rise and productivity to falter– and most damaging of all, they frustrate customers and could case them to start thinking about taking their business elsewhere. If we act quickly to fix our mistakes, however, we can make our mistakes pay off.

Customer churn is expensive

91% of your unhappy customers will not willingly do business with you again (Source: U.S. Office of Consumer Affairs) and will take their business elsewhere. When customers leave you, you need to expend time and money getting new ones– and it generally costs a great deal more to get a new customer than to keep an existing one. Think of the difference in the time, effort and money that goes into marketing and sales to bring in new cardholders versus the little effort it takes to stay connected with a cardholder you already have. Your processing platform can do most of the work for you. We know – there are a bunch of automated communication and engagement tools baked into our platform that, when used effectively, can handle the lion’s share of account servicing. It’s when you lose a customer and have to replace them that things get costly.

News travels fast, and bad news travels faster and farther than good news

News of our mistakes can reach more than twice as many people as news of a good customer experience. On average, a satisfied customer tells three or four people about a positive experience while an unhappy customer tells nine to 15 people about one of our mistakes. And 13% of unhappy customers tell more than 20 people! (Source: U.S. Office of Consumer Affairs). It can take 12 positive experiences to make up for just one negative customer experience (Source: “Understanding Customers”, Ruby Newell-Legner). In the digital age when people are always connected, however, all bets are off. People today are always connected and constantly sharing their experiences online. There is simply no predicting how many people a single negative online review will reach. But there are two things we can be sure of: (1) people are always sharing their impressions, and (2) people are more likely to vent about a negative experience than to praise us for a good experience.

The key to turning around a mistake into loyalty and trust? Fix the mistake to the customer’s satisfaction as quickly as possible. This is the core of good customer service.

Five Steps to Turning Around Mistakes

Step One: Encourage Complaints

We cannot fix a problem unless we know that it has occurred– and we need to know about a problem before we read about it on the web. Encourage customers to complain to you before they hit SEND and launch their complaints into cyberspace.

Go looking for complaints

Don‘t assume that just because a customer has not complained, that the customer is happy. Less than 4% of unhappy customers complain (Source: U.S. Office of Consumer Affairs). Proactively seek feedback from customers. That not only teaches them that we want to know when something is not right, but it helps build strong relationships and trust. Having a strong relationship with our customers makes them more forgiving when mistakes do occur.

Make it easy for customers to complain

Try to eliminate unnecessary barriers between you and your customers. We offer our clients great communication features within the i2c platform that give them as many ways to communicate and seek input and comments as possible. You will want to make it as easy for consumers to complain directly to you as it is for them to post an online review and get them to a live person as easily and quickly as possible. If they haven‘t reached a live person in 2 minutes or less, then you have lost them. Sitting on hold, waiting 24 hours or more for a return phone call or email, being passed on to a second or third person all increase an already unhappy customer’s frustration level. A study by the US Office of Consumer Affairs found that for every very customer who complains, 26 other unhappy customers remain silent.

Step Two: Remember that the customer is always right

If a customer says you made a mistake, then accept it. Then make it right. We cannot win by doing anything else. It is counterproductive to try to convince the customer that you did everything right; that is simply telling customers that they don‘t really have a problem. It is just as counterproductive to offer excuses. But, by far, the worst thing one can do in the middle of trying to recover from a problem is explain to customers what they did wrong. Blaming the customer is never a good idea. When a customer complains, do two things and only two things: (1) find out what the customer needs fixed, and (2) figure out how to fix it. This means that your staff needs to be trained to handle customer complaints effectively using the correct mix of empathy, apology and resolution.

Step Three: Fix it for the customer ASAP

Put out the fire fast. Customers have neither the time nor the inclination to wait through a prolonged recovery process. By acting too slowly you risk expensive customer attrition and damaging negative word-of-mouth. The faster there is action, the more satisfied the customer. Customer loyalty, positive word-of-mouth and customer referrals are engendered not just by taking action, but by acting fast. Fast action requires that staff be empowered to develop and implement solutions. Problems cannot be fixed quickly if staff must refer problems up the chain of command for resolution.

Step Four: After you have put out the fire, figure out what went wrong – and make changes

After you have made things right for the customer, learn from what happened and make changes to avoid the same thing happening again. Repeating mistakes undermines the customer loyalty and trust that you build up by well-performed recovery. You want to make sure that the real problem is solved, not just the symptoms, so that you do not keep making the same mistake over and over again.

It can be a good idea to bring the customer back into the conversation at this point; doing so can provide some additional insight into what went wrong and help strengthen the relationship. And we know from last week’s discussion that having a dialogue with customers is a smart thing to do in order to build trust. Minimally, the customer should be thanked for bringing the problem to your attention and told that they have helped you work out a solution a problem. Doing so may encourage more complaints, but good service will build the loyalty and trust you need to grow your business.

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