Managing customer complaints

It's important to carefully manage how you respond to negative feedback about your business. Complaints can be uncomfortable to deal with, but they can be a good opportunity to improve your products, services or operations.

When a customer takes the time to make a complaint, you should also take the time to identify what has gone wrong and what can be done differently next time.

Make sure you train your staff and have processes for managing customer complaints.

What is a customer complaint

A customer complaint is an expression of dissatisfaction about your business regarding your staff, products or services that requires a response or resolution.

A customer may leave a complaint if their expectations of your products or services haven't been met. These expectations come from their interactions with your business and experiences with other businesses, products or services.

Complaints are typically based on:

  • poor service or product quality
  • special requests not fulfilled
  • dissatisfaction with products or facilities
  • unhygienic conditions
  • low comfort levels
  • the behaviour of other customers
  • errors with bills, reservations or orders
  • unfair treatment.

Value of complaints

Handling complaints effectively will benefit your business, reputation and overall operations.

Complaints can highlight weaknesses in your training programs, policies, work instructions and service delivery, and give you the opportunity to improve your operations.

Good complaint handling:

  • reassures customers that you are committed to resolving problems and improving relationships
  • maintains and builds loyalty
  • improves your accountability and transparency
  • evaluates and improves programs and services
  • informs decision making about future service delivery.

Aim for a positive outcome

Thank your customer for taking the time to give you feedback. This makes them feel valued and can help change a negative situation into a positive.

Customers are more likely to give your business a second chance, and even a positive review, if you handle their complaint successfully and in a timely manner.

Without positive outcomes, your dissatisfied customers may post negative comments on social media and websites with user-generated content, such as Facebook, Google or TripAdvisor, as well as blogs, forums and chat sites. This negative publicity can be far-reaching and damaging, resulting in a loss of business that is difficult to recover.

Read more about managing online communication and customer reviews.

Try our customer complaint management scenarios

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Managing customer complaints can be complex and involves working with customers to find solutions to problems.

Make sure you always respond professionally and with empathy to help create a positive outcome.

How to avoid customer complaints

Customer complaints can often be prevented.

  • Provide your staff with:
    • regular product and service training
    • communication and customer service training specific to what you expect in your business
    • clear policies, procedures, work instructions and complaint-handling processes.
  • Understand your customers' rights and responsibilities, including guarantees, warranties and refunds.
  • Decide what incentives or strategies (e.g. discounts, refunds, price-matching guarantees) will be part of your customer complaint process and which staff are authorised to offer them.

Handy tips for handling complaints on the spot

Use the L.E.A.R.N. model when dealing with a complaint.

L — Listen to your customer. Let them feel heard. Don't interrupt them.

E — Empathise with your customer. Put yourself in their shoes. How would you feel?

A — Ask them what outcome they would like.

R — Reassure them that you will take steps to help resolve the issue.

N — Never forget to follow up with your customer about the outcome and thank them.

Print these tips and place them where staff can easily refer to them when interacting with customers.

Effective complaint handling

Use these 6 steps as a guide for handling complaints. Expand and explain each step in detail for staff training and include it in your complaints handling policy to set your expectations.

  1. Appoint 1 staff member to manage the complaint promptly.
  2. Authorise the appointed staff member to offer and organise solutions (within agreed limits) that the customer will accept—for example, a discount, refund, replacement or free service.
  3. Focus on a solution—the customer wants to feel involved and reassured you have heard their complaint and value their input and patronage.
  4. Have the customer approve the solution offered and check they are satisfied with how it's being handled.
  5. Make sure to act as quickly as possible.
  6. Let the customer know what you will do to prevent the problem happening again.

Develop a complaints handling policy

A complaints handling policy gives you and your customers a clear and refined process for managing and resolving their complaints. This is normally explained on your website or in a visible position within your physical business premises.

Thumbnail of complaints handling policy Word template

Complaints handling policy template

Customise this template to suit the specifics of your business. A complaints handling policy will help you operate with confidence when customer complaints arise.

Download the complaints handling policy template.

What to include in a complaints handling policy

Make sure your policy tells your customers:

  • how much you value their feedback
  • your commitment to resolving complaints fairly, efficiently and courteously
  • the steps you would like customers to take when making complaints
  • the steps you will take to resolve complaints
  • some of the solutions you may offer
  • how you use customer complaints to improve your business.

Compliance considerations

Include any legal, ethical and financial obligations when developing your complaints handling policy.

For example, under Queensland liquor licensing legislation, you must deal with complaints about intoxicated persons through a specific process that often includes reporting to the industry regulator.

You must understand your obligations under the laws and legislation governing business trading within your state as well as in Australia. Find out about your business rights and responsibilities.

Australian Consumer Law

Australian Consumer Law governs and protects fair trading practices in Australia. It's a sub-section of the Competition and Consumer Act 2010, and is administered and enforced by the:

Complaints register

Develop a complaints register for keeping track of customer complaints. Once complains are resolved, it's also a source of valuable information to monitor trends and help improve your products, services, and operations.

You can keep physical records or store them electronically. Review the register regularly to identify any recurring issues.

What to include in a complaints register

  • Customer name—to track the progress of an individual complaint.
  • Staff member name—to conduct quality assurance reviews.
  • Type of problem—to identify trends and ensure consistency in how your respond to complaints.
  • Specific product or service the complaint relates to—this will help you understand if you have quality issues with a particular supplier, employee, or product.
  • Location of the problem—to highlight regional trends and how they are handled.
  • Time taken to resolve the complaint—to monitor timeliness, efficiency, and human resourcing.

Training staff to use a complaints register effectively

Training should include:

  • how staff can access the register
  • regular reporting—to prompt staff to monitor trends and quickly identify and respond to new challenges
  • a process for complying with any legislation that regulates how you must make, record and notify decisions or resolve complaints, as well as complying with information privacy requirements.

Reviewing the complaints register

Review your complaints register regularly. Depending on the size of your business and nature of your work, this may be on a monthly, quarterly, or half-yearly basis.

Scheduling time to regularly review the register and check for patterns in the type, nature and handling of complaints will help you identify issues. This could include:

  • the number and type of complaints
  • recurring complaints and their root cause
  • customer service weakness
  • the complaint handling skills of your staff
  • customer complaint behaviour and your management methods.

Common complaints and solutions

There are common complaints that customers make relating to products and services. Anticipating these common complaints and having procedures in place will help you resolve them quickly, efficiently and with minimal costs.

Make sure your solutions satisfy your customers and are feasible and affordable for your business. Remember that the cost of a short-term concession is often worth it to preserve a long-term customer relationship.

Solutions to common complaints

    • Investigate the fault with the manufacturer.
    • Offer a replacement item or replacement model.
    • Repair the product if it is under warranty.
    • Consider replacing the product even if it is no longer under warranty—to preserve the relationship with your customer.
    • Train staff to explain warranty conditions at the time of sale and repair.
    • Train staff about the features and benefits of the products they are selling.
    • Ensure product descriptions and advertised prices are accurate.
    • Investigate the product with the manufacturer.
    • Make sure staff explain warranty conditions.
    • Investigate the areas of issue.
    • Train staff in customer service and communication skills.
    • Rotate staff so they can increase their knowledge of other areas of your business, or to find areas that best suit their skills and strengths.
    • Encourage and support teamwork.
    • Develop and use disciplinary procedures such as including performance management.
    • Review recruitment and selection procedures.
    • Investigate lead times.
    • Reprioritise delivery schedules.
    • Train staff to provide more accurate delivery timeframes to clients.
    • Retrain staff in how to respond to client requests.
    • Set procedures on how to respond, including timeframes for responses.
    • Provide more take-home information to customers.
    • Train staff in communication, including body language and facial expressions.
    • Have a shared log or database for current issues that other staff or shifts need to be aware of (e.g. a hand-over book for shift changes).
    • Encourage teamwork, collaboration and support.
    • Train staff in good customer service and managing customer expectations.
    • Document promises made to clients and the processes in place to ensure you deliver.
    • Encourage teamwork, collaboration and support.
    • Make sure staff know your products and services including features and benefits.
    • Make more product literature available for reference.
    • Encourage teamwork and support.
    • Examine the nature of the complaints.
    • Try to determine the reason for the frequency of complaints.
    • Discuss the recurring pattern with your staff and potential solutions that focus on the nature and frequency. Consider that the complaints may be the expression of unrelated customer frustration.

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