Customer Service: 5 Rules for Handling Complaints

The Internet gives angry customers a megaphone; even one angry one can do a lot of damage. Here’s how to defend your company and defuse a crisis.

While the Internet has made global commerce a reality, the online social services it spawned have also provided a worldwide megaphone for dissatisfied customers. From Bank of America’s reversal on debit card fees to Apple’s “antenna-gate” to Netflix’s pricing plan backlash, companies have struggled to respond effectively in the social space.

Where do they go wrong? In almost every case, they forgot one of these five rules of online customer service.

1. Respond

Failing to respond to even one unhappy customer can be costly. United Airlines found that out the hard way, when they broke musician Dave Carroll’s expensive Taylor guitar–and then ignored him. With 12 million views, the songwriter’s YouTube video tore the wings off more than $7 million in positive advertising.

Ignoring a complaining customer was a 20th century solution. Without the Internet, one angry person–even a hundred–might not have had much effect on the bottom line. Of course, that’s not the case in this age of social media, where one guy with a busted guitar can speak to millions.

2. Acknowledge

Bank of America sounded out-of-touch last fall when the company failed to acknowledge that it was making debit card fee changes that would negatively affect millions of its customers. Even after a rising tide of criticism, the bank still didn’t admit a mistake. Rather, it attempted to retry its losing case in the online court of public opinion … and lost.

Whether your customers are on Facebook, Twitter, or your company website, you need to remember that the world is watching. If you’re right, make your case simply, compassionately, and professionally. When wrong, admit the error clearly and candidly. Surveys show that customers admire company executives able to accept fault and willing to take steps to eliminate future situations.

3. Elevate

In June 2010, Apple CEO Steve Jobs made one of his few PR stumbles in response to a tsunami of complaints about the iPhone 4’s antenna configuration. Apple eventually admitted a problem, but not before Jobs infamously suggested to a blogger that users should just hold the phone differently. His comments only fueled the online firestorm.

Like Jobs, you’re proud of your company. Pride is fine, but don’t fire back–it’s only business, and needs to stay that way. No matter how personal the barrage, stay above the fray. If you’re right, respond only on the merits of the case. If you attempt to discredit a complaining customer–directly or by innuendo–you risk sounding like a bully. Gloating, blaming, and deflecting are all losing strategies.

4. Apologize

Last summer, stockholders were calling for Netflix CEO Reed Hastings’ head when he bungled the response to customer backlash over the company’s  restructured pricing. Hastings did apologize for the misstep, but still tried to argue his case in the Twitterverse even as his company’s stock price took a 40% nosedive.

If you’re wrong, admit the fault and apologize.  No excuses; no “buts.” An apology is not an opportunity to further the argument.

The rules of business apologies are no different than with your spouse. The only thing that should come after the apology is a promise to fix the problem and a pledge to never do it again–anything else and you’re liable to create more problems than you’ll solve.

5. Downsize

Handling customer complaints in the social media sphere is much different than a courtroom debate or advertising campaign. You lose almost all of the advantage of being a company. The discussion plays out on the small screen of your future customer’s computer. Waving the corporate flag isn’t going to be effective. You’ll need to downsize the discussion. Be casual, informative, and interactive. Don’t think of speaking to a group, but rather to every member of the Internet audience as a single individual.

If ignored, online complaints can undermine much of your hard work or even threaten your company’s future viability. On the other hand, pay attention to these five principles and you customers–current and future–will learn that yours is a  company that listens, admits fault, and corrects mistakes.

Decades of studies and surveys show that is an effective strategy to win and keep customers.