Seek Out Unhappy Customers

It is nice to meet and talk to happy customers. They like your products or services and often recommend them to others. As a business leader you get a warm glow from a happy customer – it seems to make all your efforts worthwhile. Unfortunately you do not learn a great deal from the happy client. They just confirm what you already knew – that you are doing a great job. They reinforce complacency. On the other hand, the unhappy customer is a mine of valuable information. They are dissatisfied with your current efforts. Consequently they are the best source of ideas for innovations and improvements in your product or service.

Each of Apple’s store managers allocates time for talking to customers who have complained. They have a target to call any unhappy customers within 24 hours. The results of these communications are fed back to other stores and to Apple headquarters where they form a vital input for developments and improvements. But there is a more immediate benefit. Analysis shows that on average the unhappy customers who spend time talking to store managers go on to spend substantially more on Apple products and services than other customers. Studies show that every hour spent in calling displeased clients resulted in over $1000 of incremental sales leading to over $25m in extra revenue per year across all stores. (Reichheld F (2011) The Ultimate Question, Harvard Business Review).

How can business leaders find and speak to really unhappy customers? One way is to spend time on the phone at your call centre or service department. Another is to search social media for critical comments and to reply both publicly to the group and privately to the individual. Find out what really bugs them, listen to their tirade of criticism and ignore the fact that they never read the manual. Do not argue; simply listen, sympathise and help them resolve their issues. If possible offer them some compensation e.g. a voucher or download. You may think that they are rude, lazy and ignorant (and you may be right) but they have given you something valuable – an insight into how customers think and act. For every customer who complains you may have ten others who have the same problem but keep quiet.

Many companies who are desperate to innovate add features to their products which their development teams think are really cool. But all this extra functionality may deter the average user. A better source of incremental innovation is the customer. If you keep making your product better and easier to use for him or her then you are adding value rather than just adding features. The unhappy customer is the place to start – so seek him out.

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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader and editor of A Guide to Open Innovation and Crowdsourcing, both published by Kogan-Page.