One answer to the problem is to keep your money and let the client walk out. Another answer is to make the product or service right, which might mean actually losing money on this particular transaction but retaining the client in the long run. Of course, even if you make it right, there’s no guarantee that the client will ever avail himself of your product or services again. So there appears no definitive answer to this vexing question. But wait ...
Smart Business talked with Holli Hammarquist, an assistant director of client services for International Profit Associates, about how business owners can most efficiently handle these types of issues.
What should business owners do to handle the above situation?
First, take a step back and determine where we stand by developing a risk-strategy system. This includes knowing our true costs. What is each product or service worth in time, materials and other costs? What is the break-even point for the individual products or services? As a client service representative, what is your time worth?
We must know our costs and our own worth or risk spending hundreds or thousands of dollars defending a few dollars, or vice versa, not spending enough defending what amounts to large dollars. You absolutely must know where you stand from a financial viewpoint and put into place a system so you know when to stand firm and when to give the client his way.
What needs to be done next?
Once we have determined exactly where we stand financially and what kind of time we are willing to commit to the issue, we must then determine what happened (or did not happen), and decide on the best course of action. To do this, we must understand what the client is complaining about.
Is it a perceived problem or an actual physical problem? Which of your product’s or service’s claims did not live up to the client’s expectations? What was he expecting in the first place? Was he promised something by the sales staff that was not delivered? Did the client misunderstand how to use the product or service and needs retraining? Was your product or service truly at fault and, if so, to what extent? Was it a personality conflict between your staff and the client?
Speak to the client where possible. Do not be defensive. Allow him the time to be heard. An upset client should not be put on a time limit. Acknowledge the validity of the complaint. If he becomes angry or frustrated, reassure him emotionally before dealing with the issue logically. Even if the complaint seems bizarre, it probably contains a grain of truth. Try to learn something from it. Any complaint is a 100-percent bona fide, major issue for the client. His perception is your reality.
Research the problem and look for lessons before making any decisions. Find out what actually happened from both sides. Does it need to be fixed or is it a one-time issue? Has the client misunderstood something? For complex problems, give yourself time to figure out a proper resolution.
If the situation was caused by something that can be controlled, implement a system to prevent it from happening in the future. Know that if one client complained, others probably feel the same way.
Give the client a choice of possible resolutions. Suggest a way that works for both of you. Sometimes just listening to a grievance and acknowledging it is sufficient. At other times, the client is looking for more. Be creative, find an equitable resolution to the problem, and make sure the client agrees that it meets his needs.
Finally, you cannot make all the people happy all of the time. If you have done everything in your power to resolve the issue within the risk parameters you have set up, it is time to fire the client because he is now costing you more money than he is worth.
How can a business learn from these situations?
Most importantly, the business will learn what clients’ true perceptions are of the service or product you provide. Just because you believe you have the most wonderful widget in the world, does not make it so.
If there are complaints, do not take them personally; take them as a challenge to be even better. Categorize complaints from a once-in-a-blue-moon occurrence to ‘it’s serious and a solution must be found now.’ Then make sure to track them on a regular basis for trends.
Obviously, very serious situations will be dealt with immediately but for the rest, you need to look to the trends. Over time, are you seeing that one person’s name keeps popping up? It might be time for retraining. Are you seeing that a certain specialty product that you produced on a limited basis is getting rave reviews? Maybe it is time to expand its line. The trends and your clients will provide you all the information you need to be successful.
HOLLI HAMMARQUIST is an assistant director of client services for International Profit Associates, Buffalo Grove, Ill. IPA's 1,800 employees offer consulting services to businesses throughout the 50 United States and Canada. Reach Hammarquist at (866) 538-0668 or firstname.lastname@example.org or www.ipa-iba.com.