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Turn Customer Complaints Into Value-Building Opportunities

Have your customers been complaining about such issues as service disruptions, back-ordered products, unreturned phone calls, curtailed business hours and unexpected price increases? For many organizations, complaints are becoming ubiquitous thanks to labor shortages, rising costs and supply chain disruptions. Even with "help wanted" signs posted everywhere and constant news about business challenges, customers often aren't fully aware of what you're up against.

It's unclear how long these challenges will last. A recent New York Times report on supply chain woes concluded with this grim prediction: "There are good reasons to suspect that this will be with us well into 2022 and maybe longer." Inflation and labor shortages are also expected to persist into next year and possibly beyond. What can you do to avoid and manage a potential uptick in customer complaints?

Preventive Measures

It's important to take steps to avoid letting your customers down. This might include stocking extra inventory and increasing wages (or benefits) to help retain existing workers. If products or components aren't available, you may need to say goodbye — if only temporarily — to some of your longstanding supplier relationships and switch to suppliers in closer proximity to your facilities.

And if you're unable to meet customer expectations, try some creative alternatives, for example:

  • Offer discounted substitute products for out-of-stock items,
  • Buy back products from customers that might be offered as "gently used" bargain buys to other customers, and
  • Allow customers to "lock in" a discounted price on desired products when they're back in stock.

These options may temporarily reduce profits. But they can also prevent customers from permanently switching to competitors that are able to meet their immediate materials, product and service needs.

Cost-Effective Labor Shortage Solutions

What can your company do to recruit new talent and retain existing employees? Increasing wages and benefits is an obvious, but costly, solution. But there also may be less expensive alternatives. For example, employees — especially younger ones — generally place a high value on the workplace environment. Do employees enjoy coming to work (or logging on from home)? Is work as "fun" as work can be? Those aren't concerns that can be addressed instantly but they're important.

Another important attribute of your employee value proposition is work schedule flexibility. This may include flexible hours, unlimited vacation policies and remote working arrangements. Allowing employees to choose when they come to work might seem like a counterintuitive response to being short-staffed. But, within limits, flexible scheduling options may help reduce turnover and boost loyalty.

If your labor shortage is severe, consider cutting back service options. For example, fast food restaurants may close their dining rooms and offer only takeout and drive-thru service. Or customer service hours may be reduced. If service representatives have excess downtime after their hours are cut, redeploy them to more productive tasks, such as order fulfillment, delivery, collections or customer retention calls.

Customer Communication Strategies

If a supply chain interruption happens, keeping an open line of communication is key to managing customer relationships. When you're waiting for a shipment to arrive, update customers — even if you simply tell them that you've inquired but still can't predict when the goods will arrive. Along similar lines, if you're about to deplete your inventory of a popular product and expect delays in restocking, tell customers. They'll appreciate the heads-up.

If labor shortages at your company are causing supply or service interruptions, share information about the steps you're taking to fix the problem. (See "Cost-Effective Labor Shortage Solutions" at right.) If nothing else, you might engender goodwill by demonstrating that you're pulling out all the stops to meet their needs. And, in some cases, your customers might even be able to refer qualified job applicants.

If customers have a legitimate reason to complain, promptly acknowledge them, take responsibility when appropriate and exhaust all reasonable remedies. Customers who feel aggrieved and ignored are more likely to take their business elsewhere. Therefore, a heartfelt response by someone at the top of your organization can work wonders.

That said, disappointed customers don't want to hear "excuses." So be careful not to go overboard with apologies and tales of woe. These could damage your reputation with customers and possibly give ammunition to competitors. Instead, send the message that although times are tough, we're all in this together.

We Can Help

If labor shortages and supply chain breakdowns are creating financial challenges for your company, consult with your financial advisors to identify options to mitigate them. These professionals have witnessed the best — and worst — responses to customer complaints and can help guide you through these difficult times.