How to handle a major fail

How to handle a major fail

October 8, 2013

Christine Long

So you’ve stuffed up – now what?

Mistakes: we all make them. What really matters is what happens next. If handled well, a cock-up can actually be an opportunity to get closer to a customer. When Ben Crowley, managing director of Bulk Nutrients started his supplements company, he didn’t want cheap to mean nasty. If you can contact the person to let them know that there’s been a problem before they even get a chance for it to come up on their radar, you will have happier customers.  “My philosophy from the start has always been that while our prices are extremely competitive, cheap pricing does not have to mean a compromise on service.” So if an order goes pear-shaped, as it did recently, the company swings into rapid response mode.A Brisbane customer opened their order to find one of their four 1kg bags had split and supplement was scattered throughout the box. At 10pm he complained via email, asking for a replacement bag.

By 10am the next day the company confirmed it was happy to send a replacement. Plus to prevent the mistake from recurring it asked the customer for clues about how the mishap might have happened.

That fast response – the replacement bag arrived by midday the following day – and their concern about the cause of the problem kept the customer onside. Later, he sent an email, saying: “I really appreciate you getting back to me so quickly. You guys do a great job.”

Julie Sweet, owner of Certificates Online, is another who believes in bending over backwards to make sure mistakes do not create unhappy customers.

Her business guarantees delivery of full original birth, marriage and death certificates within 24 hours. But a couple of months ago, postal delays prevented an urgent application for a marriage certificate from reaching the customer within the promised timeframe.

Even though not to blame, Sweet got straight on the phone when the client informed her via email the certificate had arrived a day too late.

“I acknowledged the error made, listened to the client’s story, apologised, looked into the matter and verified the delay with the postal outlet and then offered the client a resolution.”

The client chose not to accept a full refund or an additional certificate for record-keeping, so Sweet made another offer: “I insisted that at any time in the future when the client requires another official certificate it would be done free of charge and personally hand-delivered.”

“The client was gracious, even stating that as a result of how we handled the complaint they would, in fact, refer us to their network,” says Sweet.

Jo Ucukalo, chief executive of Handle My Complaint, spends her days helping consumers get their complaints heard by businesses. She says delays are one of the most common reasons for customer gripes. But businesses that are proactive and communicate quickly in that situation can still end up on the right side of a customer’s Christmas card list.

“If you can contact the person to let them know that there’s been a problem before they even get a chance for it to come up on their radar, you will have happier customers,” she says.

She suggests arming yourself with information about the situation and presenting the customer with a range of options. These might include a refund, cancelling the purchase, waiting for the delayed delivery; or a discount.

If a stuff-up only comes to your attention when you receive an angry phone call or email, it’s important to listen carefully and act quickly.

Ucukalo says the longer it takes for a complaint to be investigated and resolved, the more a customer is likely to demand.

Her advice is to respond to the customer using the same medium – email or phone – as they have used to contact you. Active listening and mirroring their words back to them helps too.

But ultimately, she says, the goal of the conversation should be to move forward to a resolution and an acceptable resolution will not necessarily be the same for everyone.

“Some people want an apology; some people want the fault to be admitted and then other people will want some sort of financial compensation: a refund; a reimbursement, a discount.”

An ideal solution might offer the customer an incentive to continue to deal with your business. “A really good option is to say next time you purchase we would be happy to offer you a discount or express shipping or we will come out onsite for free – whatever you can do to attract them to come back to you at a later date,” says Ucukalo.

Part of handling a complaint effectively should always include looking at how to prevent it from happening again. And don’t forget it can be an opportunity to understand a customer’s needs better. “It’s not always about damage control,” says Ucukalo. “It can be about relationship-building.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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