Let us tell you a quick story. Every Monday we have a bit of an around the grounds session at work. People report back about their weekend and give a rapid fire summary of the work they have on their plate, what they aim to achieve in the current week etc. You get the picture.

A couple of weeks ago one of our colleagues fired up during the weekend summary giving a blow-by-blow description of her “bad experience” at one of Sydney’s most recognised eateries. In fact she was so fired up she told us that when she got home she went online and hit as many restaurant review sites as she could so she could megaphone her complaint to the world (or at least to the Sydney restaurant crowd).

Under the old adage, an unhappy customer will, on average, tell 10 people about their bad experience. These 10 people will then each tell a further 5 people and so on. For every formal complaint a business actually receives, there are supposedly 9 other customers who never complain to you directly but still tell 10 people about their bad experience. Some quick back of the envelope maths tells us that for every formal complaint you receive, no less than 500 people will have heard about your customer’s bad experience.

The bad news, for organisations that have not developed formal systems for handling customer complaints, is that these figures, as frightening as they are, are based on research undertaken in 1999, which was more or less before the internet really started to get going. In those days there was no Facebook or LinkedIn, and certainly not the depth of online discussion forums which dominate the net these days.

Now when a customer complains they have the world’s biggest megaphone at their fingertips. Whilst positive news often travels slowly (think of all those testimonials you have painstakingly gathered over the years) negative comments about your organisation will travel faster than the speed of light. One negative customer experience broadcast over the internet megaphone has the power to severely damage your organisation’s reputation and undo years of hard work.

Any way you look at it, not properly managing customer complaints is going to cost your organisation dearly. So what can you do to protect your organisation’s reputation online?

First and foremost, work on the basis that you will have customers that are not totally happy with your product or service. Organisations that say they don’t get complaints because they have no unhappy customers are living in lala land. If you don’t get to hear those complaints you won’t know why you don’t get repeat business or why it is your potential customers prefer your competitors.

Once you recognise that customers do complain you need to set up an internal system for capturing and managing complaints.  Luckily you will not be the first organisation in the world that has come across this challenge.  There is in fact an International Standard for Complaints Handling and Dispute Resolution (AS ISO 10002) which provides a very useful blueprint for developing your defences against the risk of negative feedback going viral.

It’s beyond this blog to go into the finer details of developing a Complaints Handling Program, however suffice to say that’s a key part of what we do here at CompliSpace.  Over the past 12 months we have seen an exponential increase in the number of organisations that are recognising the critical importance of complaints management. Many are going as far as actually inviting customers to complain to manage these complaints within a controlled environment and avoid the obvious pitfalls of public expressions of dissatisfaction.

We’ll leave you with another old adage. Dealing with customer complaints effectively often provides an opportunity for an organisation to turn a negative customer experience into a positive outcome, as the complaining customer comes to understand that they can trust the organisation in good times as well as bad.

We would love to hear about some of the experiences (good and bad) you have had, leave us a comment below.

For more information about how we can help you with managing your complaints please visit www.complispace.com.au or contact us on +61 (2) 9299 6105, +61 (8) 9288 1826 or contactus@complispace.com.au.