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What to Do: Recovery Steps for Businesses with Bad Service Reputations

July 7th, 2017

shutterstock_407461237A bad service reputation can do serious damage, even to top brands, so successful businesses are naturally concerned about poor service outcomes. Every business should have a customer service strategy spanning both prevention and mitigation. Be proactive about service standards and you’ll strengthen your brand.

The impact of bad service

Customers who’ve had a bad service experience won’t only leave; they’ll often complain publicly. The impact of bad service ranges from lost customers to revenue decline:

  • Lost customers – 56% of customers won’t use the business again.
  • Negative recommendation – 25% will actively recommend friends not to use the business.
  • Negative review – One in five will post a negative review online and 14% will share their experience on social media.
  • Lost revenue – Businesses lose billions of dollars in revenue every year due to bad service. In contrast, customers might be willing to pay as much as 86% more to do business with a company happy to go the extra mile.

We often hear of customers who share an outrageously poor service experience on social media. Once these stories go viral, the damage is done and it can take years for brands to recover, if at all. This is why it’s crucial to both alleviate impact and prevent bad service.

Dealing with a bad service reputation

Fortunately, you can rebuild trust in unhappy customers – if you treat complaints correctly. See every complaint as an opportunity to win back a valuable customer. Ensure frontline staff treat unhappy customers with respect, and make sure they listen rather than dismiss customers.

Acknowledge responsibility and be transparent

Respond to complaints appropriately, whether it’s through compensation, discount for future purchases, or an apology. Respond to web reviews publicly so you can show readers you’re addressing the issue. Avoid having drawn-out discussions in public as this can give the issue more attention. Once you’ve responded, take the complaint private by contacting the customer directly or inviting them to contact you.

It’s vital to act quickly to address complaints so your unhappy customers aren’t tempted to share their story everywhere. Timeliness is also important because the longer your unhappy customer is left waiting, the more upset he or she is likely to become. In high-profile cases, evasion or failing to take blame can lead to public outrage escalating. For example, BP did damage to its own reputation when it delayed taking blame for the 2010 Deepwater Horizon.

Ask customers for feedback so you can hear back from unhappy customers who don’t make the effort to complain. Giving customers an avenue for direct feedback could also prevent them sharing on social media or posting on review sites. Be transparent, timely, and accountable about poor service, and you’ll turn a reluctant customer into a returning one.

Create a customer complaints function

Assign responsibility for addressing customer complaints to a specific person(s) in your organisation. This function might be responsible for tracking and recording all bad service feedback. The team will be responsible for periodic reports to keep management up to date. By tracking and reporting poor service cases, your business is better informed to make decisions about how to implement service improvements.  

They’ll be tasked with responding to negative reviews, reaching out to customers, and rectifying errors. Provide the team with detailed guidelines on how to address complaints. Having policy guidelines in place ensures uniformity and keeps your service standards high. You can also share these guidelines with the customer-facing staff in your organisation.

By having a dedicated function, you’ll ensure sufficient resources are assigned to tackling unhappy customers and protecting your reputation. If you have a dedicated customer complaints function, your customers will understand your business takes service quality seriously.

Publicise positive stories

Make a point of gathering positive testimony from happy customers and publicising these cases on your website and social media channels. Positive customer experiences can counter negative opinions on review sites and social media. They can assist with rebuilding trust in your brand.

Prevention strategies

If your brand has suffered damage from a case of bad customer service, you’ll want to have prevention strategies in place to raise your service standards. Even if you already have a great service reputation, prevention strategies are also important to keep customers happy.

Track customers with CRM software

If you don’t already have customer relationship management (CRM) software, you should think about using one. CRM can help you prevent poor service experiences because it lets all the customer touch points access relevant customer information.

It can also help you respond effectively to bad service experiences as everyone in the organisation has access to the same data about the customer. Rather than customers having to explain their history every time they contact your business, your staff will be able to assist more quickly to queries.

You can respond to leads quickly and have personalised data to improve the service experience. Using a CRM has the added benefit of more effective selling because everyone in the organisation has access to personalised information at a click.

Reward employees for great service

Hold employees accountable for providing respectful, efficient service. Provide detailed guidelines and even scripts for dealing with customers. Reinforce high service standards with an appropriate remuneration system. Don’t forget to provide positive feedback to staff who provide great service standards as employees often value feedback as well as monetary compensation.

Training can boost service standards. Guide staff with training on valuable qualities such as empathy, clear communication, and active listening. Support your customer-facing staff with appropriate tools and equipment to help them do their jobs.

Every business should be aware of the risks of poor customer service. Bad service can be costly for businesses, as it can lead to damaged reputation for brands. Address reputation risks by addressing complaints and negative reviews promptly, and have a prevention strategy in place. Happy customers means a stronger brand name and profitability.

Australian Debt Solvers is a leading business turnaround advisory service. We’ve assisted hundreds of Australian businesses with debt issues. For an obligation-free discussion about what we can do to help your business, contact our friendly team today.

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David Hill
David has over 15 years in the insolvency industry – advising clients through restructuring of their business. His clear, “straight up” style provides clients with a strong direction of what they need to do, and how the process will work. As importantly, he brings empathy to the process – which is essential at a “high-stress” time for clients.

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