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25 Australian executives share their strategies for handling disgruntled customers

Photo: Joe Raedle/ Getty Images.

There are a lot of business sayings out there which talk about the importance of happy customers.

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else” — Sam Walton, founder of Wal Mart.

“We used to think that the enterprise was the hardest customer to satisfy, but we were wrong. It turns out, consumers are harder than the enterprise because the consumer will not give you a second chance” — Eric Schmidt, executive chairman of Google’s new parent company, Alphabet.

“When you are making a decision about how best to serve your customers, your own experience is often a better guide than a more sophisticated analysis of the market” — Richard Branson, founder of the Virgin empire.

And while they often seem repetitive, their value remains the same.

As modern businesses evolve, so does the customer, their values and expectations.

Now it’s about keeping up with the young and digitally savvy shopper, the shift worker who wants products delivered at a time that suits them, or even the price-conscious deals finder, who wants to ask questions to ensure they’re getting value for their money.

These are the challenges startups, ecommerce, and even brick and mortar businesses are facing today.

But when things go wrong, as they often do, how do they manage disgruntled customers?

Business Insider asked a handful of executives to share their experiences and how they have handled them.

Here’s what they said.

Jane Lu, founder and CEO of Showpo

Whenever we have issues with difficult customers, I ask our customer happiness team to pass the call/ email on to me. Our customers like that their issue is being taken seriously and forwarded on to the CEO.

The best way to handle these situations is to kill them with kindness. This is a cliche, but it's works.

That being said, my real hack is that when a customer is being painfully difficult, I draft an email directed to them detailing my frustrations, but I send it to my 2IC.

Alastair Coleman, founder and chief digital strategist at Nothing But Web

My number one piece of advice to the team is, listen to the client. Do not interrupt and let them tell you their story. A lot of the time they are frustrated and want to vent. If you try to step in it will likely add to their frustration. Once they have finished speaking, repeat back to them in a calm and even voice (tone is very important) their concerns so that they know you listened to them and recognise their issues.

This opens up the conversation and allows for a more constructive dialogue. Finish with action points and a timeline, followed up in an email to the client when the call concludes. Most importantly, make sure you hit those action points.

Nick Bell, founder and MD of WME

When dealing with disgruntled or difficult customers, it’s crucial to hear out their problem and to let them speak without interruption. It might be tempting to argue a point, but hold back, as this can exacerbate the situation. When you do speak, keep calm, and steer clear of any negative language. Let them know that you understand their concerns and that you’re willing to work with them to find a solution. Follow-up with an email that outlines the same.

Recently I spoke with a disgruntled client. I listened to what he said, and then asked him to review the Terms & Conditions of our agreement. I then asked him if he felt we had met those terms, and he agreed. This ensured we were both on the same page and could agree on a way forward.

Dean Jones, co-founder and CEO of GlamCorner

At GlamCorner, we have a relentless dedication to what we call 'Customer Happiness' and see providing excellent customer service as a competitive advantage. This approach is especially true for our business because most of our customer behaviour is very event-driven and when mistakes are made we risk accidentally delivering way below the levels we've promised. So while these mistakes don't happen very often, our team is very good at handling complaints and turning disgruntled customers back into happy customers.

We believe in recovering from these situations fast by turning to what's known as the 'Service Recovery Paradox': when a mistake is made with a customer and we successfully recover from it, the customer can be left more satisfied than had we done everything right in the first place! So when we're met with this situation, our team knows it's actually an opportunity to wow another customer than to see it as some sort of an attack on the company and its values. In this situation. it's important to fully understand exactly what the complaint is, no matter how bitter the pill is to swallow - and don't just 'sound like you understand', make sure you actually understand what the underlying problem is. This detailed diagnosis will reassure the customer that you definitely know how to correct the problem for them while also ensuring you prevent it from happening again to future customers.

Our strategy is simple - WHEN IN DOUBT, REMEMBER: CUSTOMER HAPPINESS.

Jodie Fox, co-founder at Shoes of Prey

Firstly, we always make sure that they are heard and feel heard. Sometimes this is letting them get everything out that they need to without interrupting. Sometimes it's asking more questions. We always assume the best of our customers, even when it's difficult to reveal it initially.

Secondly and importantly at this stage, we make sure that our staff have tools they can reach for to know that they are supported. This might mean relying on training they are given, or being able to ask someone more senior for assistance. Very occasionally an extremely disgruntled customer will take things too far, and it's really critical that we protect our staff from situations that damage their personal happiness. When we say that we believe in passionately creating happiness, this means that we stand by values like respectful treatment of each other as we work together on getting the world into beautiful shoes.

Lastly, we aim to be clear, open and quick to respond to all issues - We take pride in showing that we care about resolving the issues rather than just saying we will.

Eugene Trautwein, vice president of worldwide customer support for Commvault

The earlier you can detect the signs of a disgruntled customer the greater your opportunity to turn them around. Through the use of quantitative and qualitative surveying, and transparency throughout the escalation process, there is great opportunity to get on the front foot.

When a problem is identified, it comes down to the small things; be prepared, analyse the situation, actively listen and understand your customers concern. Show that you genuinely care and give them confidence you understand the impact. Have a clear plan to resolve their concerns, then meet and exceed expectations.

Once resolved, it’s important to ensure all layers of your organisation learn and adapt to avoid similar situations. When customer grievances are managed well, disgruntled customers have the greatest potential to become your most loyal and satisfied.

Nick Wells, store manager at Microsoft flagship store, Sydney

It is not uncommon to face disgruntled customers in the retail industry, so our fundamental strategy at the Microsoft Flagship Store in Sydney is to empower our team of advisors to ‘get to the yes’. Best-in-class customer service is at the heart of all that we do, which is why we have the unique Answer Desk, where we help customers with any Microsoft hardware, software or services, regardless of what the device is or where it was purchased.

When dealing with customers who have had bad experiences, the ideal situation for us is to understand their challenges, solve the problem they’re facing, and see them walk out of the Microsoft Store as fans of the brand. We encourage our team to step into customers’ shoes and try to see the problem from their perspective. It’s really all about presenting customers with the possible options, and allowing them to make the final decision (i.e. get to the ‘yes’).

We’ve seen many scenarios where customers come in to our Answer Desk requesting help with hardware and/or software, but a recent example of this was a business customer who purchased a Surface Book from another retailer last November. The Surface Book’s screen was smashed and he had not covered it under Microsoft Complete – our proprietary extended service and support plan. While we could not add on the extended warranty at that stage (as per the systems in place), we made good and replaced the device for him. This led to him purchasing four additional devices for his business, each with Microsoft Complete, and leaving our doors as an advocate of the Microsoft brand.

Sreelesh Pillai, GM Australia and New Zealand of Freshdesk

It is important that as a leader, one is attuned to the problems faced by customers before drawing up strategy to guide service teams in their testing moments with unhappy customers. At Freshdesk, every manager, senior executives including, spend a few hours every week on front line customer support, answering calls and emails from our customers. It has helped us collect useful product feedback as well as come up with grounded support guidelines around things like why empathetic responses like “I am sorry” are important, instead of inauthentic sympathetic responses like 'We are sorry'.

In one example, we had a potential customer try out our software but when they contacted support to ask some questions, they were misunderstood and given the wrong information, leading him to stop evaluating the software and post a damaging review of Freshdesk online. On seeing the review, two management staff from different geographies, including myself, contacted the disgruntled customer to work the problem out. After discussing with him at length, we resolved the issue quickly and he amended the review. Our relationship ended positively and the reviewer is still a happy Freshdesk customer today.

Taras Naumenko, head of customer success at Campaign Monitor

Every interaction with a customer is an opportunity, and a negative one - even more so. As much as we all love to hear positive feedback and flattering comments, an unhappy customer will often provide you with far more valuable insights and challenge you to grow your business in new unexpected ways. The key to managing these difficult conversations is empathy - more often than not a disgruntled customer just wants their concern understood and acknowledged in a personal, human way. Another ingredient is creativity and lateral thinking - I personally had many conversations with customers and partners where we employed what's known as the '5-whys strategy' - where you peel the layers off the problem repeatedly until you discover the core issue. While there may be no obvious solution to the customer's problem if you attack it head-on, after you unpack it you may come up with new creative ways to solve individual components or 'parts' of the issue, ultimately turning the customer around.

Nicole Cameron, special operations team leader at Vinomofo

1. Solve their issue and ensure it doesn’t happen again. Never underestimate the simple act of listening, which provides catharsis and gives you the chance to get to the root of the problem.

2. Be proactive and creative. We do something we call Mofo Acts of Delight (aka MAD Projects). When a customer has had a particularly unfortunate experience, we do something to show we care more – we get to know our mofos, so we usually know whether they’ll prefer tickets to the movies, the footy or just a really nice bottle, or even flowers. Recently, a customer’s wedding wine wasn’t going to arrive in time, so we personally drove it to the customer from the office (our warehouse is interstate). Proactivity and creativity make a meaningful difference.

3. Always thank the customer for bringing their experience to your attention. Their feedback is the most valuable tool for your company’s continuing improvement!

Martin Hosking, founder and CEO of Redbubble

For a large consumer site such as Redbubble, with millions of customers all around the world, the key to dealing with disgruntled customers is to have really solid processes in place. You need not only to give them super easy access and responsive customer service but to actively meet them where they are, and respond to them, on social media. You wont make everyone happy but it is possible to try and respond to all issues and proactively seek out any complaints even if they are not directly sent to the Company. An unhappy customer who is not heard can easily become a happy customer once they are listened to and the matter is dealt with.

Kate Morris, founder and CEO of Adore Beauty

1. We find it helps to understand that a customer’s reaction is often affected by negative experiences they’ve had elsewhere, or other circumstances in their day. If for example someone is under stress, sometimes the smallest thing going wrong can be enough to send them over the edge. Generally if you respond calmly, and fix their problem promptly, most people calm down pretty quickly.

2. You can avoid customers becoming disgruntled in the first place by being proactive, and ensuring that you set expectations and then live up to them. If for example you’re not going to ship a customer’s order within 24 hours (which I think most customers would reasonably expect), then you need to let them know that before they place their order.

Dean Ramler, co-founder of Milan Direct

No retailer will ever achieve a 100% satisfaction rate, because things from time to time can go wrong. It is how you respond to issues, which separates the good retailers from the rest.
At Milan Direct, we view any unhappy customer as an opportunity to turn them into our biggest fans, and we employ the following tactics.

1. Let the customer explain in full the problem they may be experiencing, and really hear them out.
2. Confirm to the customer you understand their position and acknowledge there is a problem to resolve (even if this was caused by a third party).
3. Promptly resolve the issue, and keep the customer informed as to the steps you will take to do so.
4. Communicate well throughout this process

There is no issue that cannot be fixed, and we find all customers are reasonable and appreciate when you go above in getting a prompt resolution.

John Winning, CEO of Winning Group

I'm a big believer that businesses should not only be judged when things go right, but also how they handle a situation when things go wrong. As such, having a strategy for how you deal with an unhappy customer should be one of your company's biggest priorities.

At Winning Group, our mission is to provide the best shopping experience in the world however like any business; the reality is that there will sometimes be instances where we encounter issues, and it's in these situations where we strive to go above and beyond to rectify the situation.

We have a dedicated customer experience team who ensures that any issue that may arise throughout the customer's experience (including after the sale) are resolved in a timely manner. We remind our staff to think about how they would like to be treated as a customer.

When it comes to swearing, we take a firm but polite stance. We try to be empathetic because at the end of the day, we don't know what is happening in their life to cause them to act out like that. At the same time, it's not acceptable for our staff to be spoken to inappropriately. If a customer crosses the line, myself or other senior management will personally take over all communication.

Sophie Jillings, head of APAC at truRating

For business owners and managers, the focus should be on continued improvement – listening to customer complaints, but also creating easy channels for regular customer feedback (good and bad) to help you understand what is working and what isn’t and make informed decisions on what to stop, keep and improve.

For example, you may find there’s a correlation between customer happiness and staffing levels. Gathering ongoing real-time customer feedback will help you pinpoint exactly when your performance is at its best and worst - you can identify pinch-points before they escalate into reasons for complaints.

Take all feedback seriously - anyone who takes the time to express dissatisfaction will have good reason. Remember though, the majority of customers actually won’t make a complaint – on average most businesses receive feedback from around 1% of their customers. If you have one customer complaining, there may be 20 more who simply won’t return. Equally, you may just have caught someone on a bad day – their opinion may not represent the majority.

A real-time customer feedback tool, such as TruRating, allows for mass customer insight due to its simplicity and anonymity (hear on average from 88% of your customers consistently). Consumers these days don’t always want to have to provide all their personal details or indeed have an awkward confrontation in order to provide feedback to a business.

Simon Barlow, GM at Brennan IT

Customers expect their interactions with a company to be highly personalised, and I find it works well to approach conflict resolution in the same mindset.

If you’re talking to a customer by phone, for example, it’s quite powerful to keep using their name when addressing them or answering questions. The conversation feels more one-to-one and in my experience it’s also more difficult for the customer to stay frustrated.

It’s important also to listen to and empathise with the customer and their situation. When you deal with a situation calmly, it reduces tension.

How you react to customer complaints should also be embedded deeply in your company culture. I believe as a business you have to truly own customers’ issues as if they’re your own by dropping everything, acting with urgency and 'moving mountains' to solve them. That’s a key tenet of our own internal customer service strategy.

Mike Rosenbaum, founder and CEO of Spacer

When my team and I come into contact with a customer who has an issue or is unsatisfied with the service, we like to take this as an opportunity to not only amend the situation, but to also interact with the customer in a way that will convert him or her into a loyal advocate of our brand.

This involves firstly acknowledging the customer's disappointment, ensuring they're not out of pocket, and putting the necessary steps into play to fix the issue at hand.

Secondly, we find it's important to go the extra mile to ensure they not only feel satisfied with the service but also feel valued by our company and team. This may involve giving him or her a discount or an additional free product or service.

These seemingly negative customers experiences are actually a great opportunity to build your brand, by engaging with your customer in an exceptional and personal manner, giving them something positive to talk about with their own networks.

Ned Moorfield, CEO of GoCatch

Diligence is critical. You have to listen carefully to make sure you understand the customer's concerns, acknowledge and empathise with those concerns, spell out exactly how you will address them and always follow up once you have done so. A little empathy and effort can salvage almost any customer issue.

Eric Schwantler, GM of Dekko Secure

It's important to have the facts when dealing with a disgruntled customer or even, employee. A web-based solution that allows anonymous reporting would help you figure out whether you're dealing with a one-off incident or a systemic problem.

Troy Douglas, co-founder of Nexba

Customers shape our future as a business, so regardless of what industry you're in, you must always remember to listen. The saying, 'The customer is always right' still holds true today so you have to be prepared to leave your ego at home.

Aris Allegos, CEO of Moula

Working in the family business taught me the importance of listening to the customer: honest customer feedback was worth its weight in gold, while negative feedback, when channeled the right, was worth more than any compliment or positive review. It's these principles that underpin our approach to customer service at Moula, the independent customer reviews we collate are a testament to this.

Craig Fallshaw, CEO of Complimentary Medicines Group

One of my clients once said, its not that you made a mistake that is what people remember, it is how you go about fixing it.

Firstly, talk to your customer. This is very important as you may find that the big picture problem is very different to what they are talking to you about.

The second is to commit to finding a real world fix. On your best day, this will allow you to solve all their problems for them. Sometimes, you may not be able to deliver the outcome they want and you need to be clear with your customer and offer to help with any flow on effects where possible. Finally, find a way to prevent this type of issue happening again and let your customer know how you are making that happen. This shows your current customer you care, tidies up any miscommunications that contributed to issues in the first place. The nice bonus is that it improves your service delivery to future customers.

Keith Louie, CEO of Aussie Farmers Direct

We’re pretty passionate here about customer service. We know Australians have a plethora of choices for their food shopping, so we don’t take any of our customers for granted. By and large I think we do a pretty good job keeping our customers happy, but unfortunately there are times when someone has a poor experience.

We have a dedicated Customer Feedback Team who review and resolve complaints daily and make sure senior leaders are aware of any recurring themes or issues. And senior leaders, myself included, will regularly handwrite letters to customers to follow up on their concerns and ensure they’ve been addressed. I find this direct and personal touch gets a great response, and I think it sets us apart from many of our competitors.

Daniel Muhor, GM of Primus Hotel, Sydney

Most importantly you need to listen and show empathy to your guests. If a customer is really frustrated it is often because they feel like they aren’t being heard. More often than not, the best way to diffuse a situation is to acknowledge the problem. Also, be aware of your body language – you never want to show defensive or aggressive body language to the guest or customer as it will completely negate any efforts you’re making to be empathetic. Of course any aggressive language is absolutely unacceptable.

The next step is to then provide a solution to counteract any negativity, this can be anything from a complimentary bottle of wine if dinner service has made an error, to a room upgrade if a double booking has occurred.

If the problem has arisen from a process within your team, follow up with the department to ensure it doesn’t happen again. Further to this, take on any suggestions from the disgruntled customer on how this can be improved as they’ll often have great insight and a different perspective on the situation.

Brandon Gien, CEO of Good Design Australia

From a design perspective it is all about EMPATHY. When we design anything, we try really hard to put ourselves in the shoes of the end user, the customer to dive into their world and truly understand how they interact with a product or service. If a customer is disgruntled, the best way to understand them is to understand the power of empathy.

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