Resuscitating Complaining Customers
Bottemiller started her seminar by pointing out that it costs business owners five times as much to win a new customer than to keep a current customer and that positive resolution of complaints from current customers builds loyalty and generates cash. Bottemiller said that too much money is left on the table because of small or initial complaints.
"Make the business case off the long-term value of the customer," she said.
"Don't get bogged down by complaints over small transactions."
She supported her statement by showing that one Nexstar customer can generate a 20-year value of over $11,000, based on the initial service call and subsequent maintenance and replacement/add-on visits.
COMPLAINT MANAGEMENT EQUALS OPPORTUNITY
Bottemiller said it is important to understand the nature of the complaint and hear both sides of the story from the customer and employee. She encouraged attendees to assemble huddle meetings with their employees and discuss how to resuscitate customers and give examples of how a company won their loyalty in the past."A complaint is any time a customer expressed disappointment or told you they were unhappy," she said. "It isn't necessarily a formal complaint being lodged against you."
And she noted that complaint numbers could be misleading - actually too low - because many customers simply do not complain.
Resolving a complaint is often a problem because employees don't feel empowered to handle complaints, according to Bottemiller. She added that employees often feel they are protecting their company's bottom line by defending the company rather than understanding and resolving the complaint. She said that every employee should be a qualified first responder.
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An effective way to handle complaints is to use the Nexstar EAR Approach, said Bottemiller. This approach has three elements: Empathize, Ask Questions, and Respond.
She added that the EAR Approach is important because "every customer is valuable, responding is the first order of business, finding the root cause is second, and one incident is a bellwether. One seminar attendee said that he had a complaint from a very picky customer, and he used the incident as a benchmark for how his company should respond to all complaints.
Bottemiller recommended a complaint survey, where the types of complaints can be tracked and evaluated, i.e., complaints about employee attitudes, taking too much time, or a job done wrong.
Having the ability to evaluate and act on complaints builds awareness and educates employees, according to Bottemiller. Part of the awareness process involves thanking employees with letters posted on the company bulletin board or sent home to the employee's spouse or family.
"Say it in a thank you," Bottemiller said. "The note should say, ‘when you resuscitate a customer you build up our business.' "
Once the employees know how to handle the customer and resolve the problem, they can help other employees with similar situations. This can lead to the creation of a script for other employees to use when handling customer complaints. And Bottemiller added that the script should not necessarily include giving back money to the customer.
"Giving back money gives the impression that the work was overpriced to begin with," she said. "And you won't get that customer back or have the opportunity to upsell."
Bottemiller wrapped up her presentation by listing ways to limit angry calls.
Finally, Bottemiller recommended setting an example of how to correctly handle customer complaints because it builds employee morale. "Employees will go that extra mile if their manager will set a good personal example," she said.
Sidebar: Nexstar's Vault
Greg Niemi, president and COO of Nexstar, talked with the over 400 attendees at the Nexstar Super Meeting in Minneapolis about the organization and upcoming plans. Nexstar, based in suburban Minneapolis, is a member-owner organization comprised of independent HVACR, plumbing, and electrical contractors. There are approximately 250 current members and according to Niemi, "the goal is to reach 500 members and continue to evolve the staff to maintain ratios."Niemi and his staff rolled out an innovative new product for members, named "The Vault." The new Internet-based feature is designed to be a total learning and communications tool for members, including all of the training modules developed by Nexstar. "We want to bring training to the members and not members to the training," Niemi said.
He said that 2004 was a huge year, which gave rise to the Nexstar name and brand image, evolving from the old Contractors 2000 moniker. Niemi told members this new image shows that "the power of the brand is caring about you. "Our goal has been to take everything and rip it apart and then systematically put it back together. We want to free you of operational headaches."
Niemi told The NEWS that Nexstar is becoming "more and more aligned with the HVAC industry."
Publication date: 01/16/2006
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