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By Jaidyn Crookston | March 07, 2023 | 12 Minute Read

How to Properly Respond to Customer Complaints

How to Properly Respond to Customer Complaints

If you’ve ever read “Hug your Haters” by Jay Baer, you’ll understand why businesses should respond to every complaint, in every channel, every time. This means that anytime a customer, potential customer, or community member complains about your financial institution on online forums, social media, email, or anywhere else, your team should respond. 


This is a big undertaking and may even seem impossible. But with the right system, support, and team, you may be able to turn some fierce opposers into happy customers.


Why you should respond to complaints


With how much time it takes to find and respond to every customer complaint (not to mention how draining it can be to see negative words about something you’ve worked so hard to build), you may be tempted to ignore them. But there are so many benefits to answering complaints, including:


  • Creating customer advocacy

  • Turning unhappy customers into neutral or happy customers

  • Helping you stand out from your competition

  • Showing where your institution can improve


Create customer advocacy


Have you ever experienced a problem with a business and had it resolved quickly and efficiently? Maybe you were given a gift card for your next visit. Maybe you received a heartfelt apology from the manager. Maybe you were given a little something extra to make up for the mistake. If this has happened, and if you could tell that the business really cared about you and what you’d experienced, then chances are you told your friends. And now your friends know that this business cares about its customers. With one interaction, this business has not only turned an unhappy customer into a happy one, but has gained several new customers. That’s the power of customer advocacy.


When you resolve a customer’s problem, they’re much more likely to advocate for your institution than if you ignore them or handle their complaint poorly. And the more advocates your institution has, the more your customer base will grow and the more people will hear about you. Customer complaints don't have to be a bad thing, and gaining customer advocates is a great way to turn this into a strength.


Turn unhappy customers into happy ones


Even just responding to complaints goes a long way. If you aren’t able to resolve their problem, you can still show them that you saw their feedback and care about them. This can turn an unhappy customer into a neutral or happy one (and neutral is much better than unhappy).  


According to Jay Baer, “Hugging your haters doesn’t mean the customer is always right, but it does mean the customer is always answered.” And always answering customers is a great way to change their mindset and build your brand (as long as your response is respectful and empathetic, but we’ll cover that later). 



Stand out from the competition


How many banks and credit unions answer every customer/member complaint, in every channel, every time? Probably not many. 


This is your chance to stand out from the competition and show your customers that you care. And if you’re responding to complaints publicly (like Facebook or online forums), then chances are someone who doesn’t bank with you will see it and appreciate the time you’ve taken to respond. They may even turn into a customer themselves! 


Learn where your institution can improve


Yes, some complaints are made by people who would complain about anything, even puppies wearing sparkly sweaters. But most complaints are sincere. If you notice a trend in complaints, that’s a sign that something needs to be fixed. For example, maybe several customers complain about poor service at a specific branch. Instead of taking this complaint personally or ignoring it, investigate! Maybe it's a single person. Maybe the branch is experiencing bad morale due to poor leadership. Maybe employees feel isolated from corporate. Once you know what’s causing the complaints, take steps to fix it. See? Now you’ve taken something negative and turned it into something positive (and hopefully gained some happy customers).


If you still aren’t convinced that you should answer all complaints, just think about what doing the opposite says. Not responding to a complaint sends a clear message—that you might not care. And you certainly don’t want customers to think you don’t care about their problems. The fastest way to lose a customer and gain a hater is to make them feel unheard. 


How to Respond to Customer Complaints


Now that you know why you should respond to customer complaints, let’s get to how. Follow these guiding principles when crafting your response to a customer complaint. 


Be respectful


While most customer complaints are sincere, some can feel really…wild. No matter what, your response needs to be respectful and heartfelt. Don’t blame the customer for whatever happened. Don’t say that this could have been avoided if they had only done something differently. Don’t try to pass their complaint off as a minor issue or an inconvenience. Stay respectful, helpful, and, above all, human. 


Show empathy


Your customer is experiencing a problem. One that has likely caused them to feel stress, frustration, or anger. Showing some empathy for that customer goes a long way. Prove that you care about their problem and want to do your best to fix it. A simple “I’m so sorry to hear that you’ve experienced x. I know that can be a really frustrating experience and I’m going to do everything I can to make it better,” can really set your customer at ease and show that you’re here to help. 


Your customer isn’t a robot without feelings, and neither are you. Show that you’re human and feel for them in their moment of distress. If you were to complain to a company, wouldn’t you want to know that the person resolving your complaint cares about you? Be that person for your customers.  


Respond quickly


You should aim to respond to every complaint within 24 hours, although sooner is preferable. This will be easier if you have different people on your team dedicated to social media complaints, email complaints, online forum complaints, and other channels. If one person is trying to find and respond to all complaints, chances are something will slip through the cracks. At the very least, assign someone to respond to complaints. This is better than what most companies are doing. 


If you find yourself struggling to stay positive or respectful (some complaints seem incredibly stupid, after all), it’s okay to wait a while before responding. That 24-hour window only applies if you have a cool head on your shoulders. It can be incredibly frustrating to hear about how your institution has failed a customer, especially if you know the complaint is blown out of proportion. But that doesn't give you a free pass to speak your mind and slam the complainer. Stay respectful. Stay helpful. And stay positive. Your future self will thank you. 



Think about your response


Yes, you should respond to every customer complaint, in every channel, every time, but that only works if you’re going to respond properly (i.e. helpfully). Responding in a way that hurts a customer’s feelings or puts the blame on them does a lot more harm than good and should be avoided at all costs. It’s always better to ignore a complaint than to make the situation worse. 


Obviously, you’re not trying to make the situation worse (if that were the case, you wouldn’t be interested in an article on how to respond to complaints properly). But accidents happen and you should always make sure to reread your response a couple of times before hitting “send” to avoid regret. And if there’s any doubt at all about what you’re saying, ask a colleague to take a look as well.


Reply only twice


In his book, Jay Baer sets forth a powerful rule when it comes to customer complaints. Reply only twice. 


This means that if a customer is repeatedly antagonistic or doesn’t let you solve their problem, don’t carry the conversation past two responses. Some people are just there to complain, and it’s okay to let them do that. Give it your best shot, and if your response only elicits more negativity, then let it go. 


Here’s an example:


Customer: I hate [institution name]. Seriously, can’t you guys do anything right? How hard is it to just give me what I’ve asked for the first time?


You: I’m so sorry to hear you’ve had a bad experience, [name]. Can you tell me more about what happened so I can try to make it right?


Customer: It won’t matter. Nothing you do will ever make me go near a [institution name] branch again.


You: I’m sorry you’re unhappy, and would love to help if possible. Feel free to give me a call at [phone number] or provide your number and we can continue the conversation.


At this point, if the customer continues to be antagonistic, just let it go. You’ve done your best to solve their problem and provide solutions, but they aren’t interested. If they never come back to your institution, then that might be for the best. 


If it takes more than two replies to solve their problem and you’re making progress, that’s fine. If you’re trading information back and forth and asking questions, then continue talking to them! This “reply only twice” rule is for those customers who refuse to be satisfied and are just here to complain. Let them live their best life. But don’t let them ruin yours. 


Use Kadince to manage customer feedback


There are lots of ways to track and manage your institution’s customer complaints. For many institutions, this means relying heavily on spreadsheets and email. This is typically manual, time-consuming, and difficult to manage. Without easy-to-use, cohesive software that makes it easy to view and track complaints, you likely won’t have the capacity to respond to every customer complaint, in every channel, every time. 


That’s where Kadince comes in. Kadince software makes it easy to track complaint data, route complaints to the proper reviewer, find trends, build reports, and reduce risk. 


Kadince Feedback dashboard

The Kadince Feedback dashboard


Instead of tracking complaints across various email threads and spreadsheets, you can keep all your information in one place with Kadince. This ensures complaints follow your internal controls, are reviewed by the proper people, contain the right documentation, and don’t get lost. And you’ll always be ready for an exam because your complaint data is stored in one place and can be quickly searched. This makes it easier to respond to every complaint, in every channel, every time. Now you can spend more time giving your customers a good experience and less time managing complaint data.


Schedule a demo to learn more about managing your institution’s complaints with Kadince.


None of Kadince, Inc., its affiliates, or its respective employees, directors, officers, and agents (collectively, “Kadince”) are responsible or liable for any content or information incorporated herein. Read full disclosure.

Jaidyn Crookston | Content Manager, Kadince

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