The silver lining from customer complaints

A customer has made a complaint about the behaviour of one of your team.

Not only is your customer relationship at risk, but the way you handle the complaint could have an even bigger reputational impact with other customers than the initial incident itself.

Calling a customer ‘dim-witted’ is clearly not the ideal way to handle a complaint about a staff member. But that’s exactly what recently landed one Australian business in the national news.

While it’s very easy to tell an employee what not to do under such circumstances, what exactly should you do? We take a look at some rules of thumb, ways you can minimise the chances of repeating any mistakes and guard against any business losses.

See the silver lining

It can be hard to see the silver lining when either you or a staff member has just received a roasting, but customer complaints are an opportunity to improve your business.

As the federal government’s states: “Remember that only a handful of customers will complain to you. Most customers just choose not to return to your business.”

If someone is complaining it shows they care about the customer experience they receive from your business. If you can right the wrong you could turn them into a loyal customer. And instead of bagging your business to friends and family, they could be recommending it.

The Ombudsman of NSW writes in its Effective Complaint Handling Guidelines:  “It is now accepted that complaints should be seen in a positive light and, if handled well, can help organisations improve the way they do business and build stronger relationships with their

“Remember that only a handful of customers will complain to you. Most customers just choose not to return to your business”

Provide avenues for complaints

If you make it easy for customers to provide either anonymous or private complaints you may find they’re more inclined to give you constructive, discreet feedback.

“You can then fix the issue before it becomes a problem for more customers,” states.

Consider an in-store feedback form, a dedicated complaints section within your website, or an online chat service.

Take away the emotion

Having a predetermined policy and procedure for handling complaints can help take the emotion out of the equation, so you and your staff can respond to complaints in an objective way.

The Ombudsman of NSW has a useful complaints policy template, as does Business Queensland. The purpose of your policy should be to outline the guiding principles and key concepts that staff should keep in mind in the event of a complaint.

Your management team is key to implementing those principles and guidelines and ensuring the complaint is handled in the best possible manner, otherwise the impact to your business could be severe.

Developing a standardised complaint handling procedure can help ensure a uniform, professional and objective response to all complaints.

The WA government’s Small Business Development Corporation advises:

1. Listen to the complaint. Thank the customer for bringing the matter to your attention.

2. Record the details of the complaint. Keep records of all complaints in one central place or register. This will help you identify any trends or issues.

3. Get all the facts. Check that you have understood and recorded the details of the complaint correctly.

4. Discuss options for fixing the problem. Ask the customer what response they are seeking.

5. Act quickly. If you take a long time to resolve issues they tend to escalate.

6. Keep your promises. Keep the customer informed if there are any delays in resolving their request. Don’t promise things that you can’t deliver.

7. Follow up. Find out if the customer is satisfied with how their complaint was handled. Let them know what you are doing to avoid the problem in the future.

Understand your legal obligations

Don’t forget your legal obligations under the Australian Consumer Law and the Competition and Consumer Act 2010.

The Act aims to provide businesses with a fair and competitive operating environment and sets out consumers’ rights and responsibilities, including on returns, refunds, warranties, contracts, marketing and advertising.

Review and react

Resolving a customer complaint is not the end of the story. It’s important to reflect on how the issue arose and develop strategies to mitigate it.

The Department of Industry and Innovation suggests coming up with solutions to common complaint triggers, so what happens if:
– we’re short staffed?
– the customer is still angry after we’ve apologised?
– the order went missing, or never arrived?
– there is a breakdown in technology?
– the customer hasn’t paid their invoice?
– a customer bad mouths your business online?

The right protection for your business

Of course, no matter how well prepared you are – or whether you’re in the right – sometimes customer complaints will escalate and end up splashed across social media or in court.

Customer complaints can result in legal claims, especially if not handled well early on.

Under those circumstances, the right type of insurance for you is important. Depending on the nature of your business, that often involves Professional Indemnity Insurance.

To explore exactly what coverage your business should have, find a Steadfast Insurance Broker near you.

Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Steadfast Group Limited.


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