Complaint handling in numbers : are customers really satisfied ?

Over the years I’ve collected a series of statistics about complaint handling. I call them “the metrics of dissatisfaction”. These figures reveal that despite 30 years of research in the field, hundreds of papers and books published and tons of recommendations, companies are still not getting it. Complaint are still not being handled well and customers are more dissatisfied than ever.

The dangers of dissatisfaction

These figures should be enough to convince you that complaint handling is important, yet completely underestimated by firms.

• More than 50% of companies don’t answer complaints
• $76b are at risk because of dissatisfaction in the US (RAGE study 2013)
• In 2013, post-complaint satisfaction was still at 1976 levels (RAGE study 2013)
• 25-85% increase in profits : the impact of 5% Reduction of Customer Defection on Profit (REICHHELD, Frederick P. et SASSER, W. Earl. Zero defections: Quality comes to services. Harvard business review, 1990, vol. 68, no 5, p. 105-111.)

Dissatisfied customers keep silent with the firm …

• >70% of dissatisfied customers don’t complain (TARP, 1996, cited in Buttle, F. A. (1998). Word of mouth: understanding and managing referral marketing. Journal of strategic marketing, 6(3), 241-254.)
• 6% of consumers experiencing a problem told the firm (Retail Customer Dissatisfaction Study 2006)
• The average business never hears from 96% of its unhappy customers (TARP 1996 study)

… but not with other potential customers (word-of-mouth effect)

• A dissatisfied customer will tell 10 to 20 other (ZEMKE, Ron. Service recovery: turning oops into opportunity. Best practices in customer service, 1999, p. 279-288.)
• A satisfied customer tells eight people, whereas a dissatisfied customer tells 22. 5 (TARP 1996 study)

Yet, handling complaints well pays in terms of loyalty

• 54%-70% of customers who register a complaint will do business again with the organization if the complaint is resolved; 95% if the customer feels that the complaint was resolved quickly
• +21% : the loyalty increase if complainants are satisfied with the answer received (RAGE 2013)
• -12% : the loyalty decrease if complainants are dissatisfied with the answer received (RAGE 2013)

And loyalty pays in terms of profits

• 177% : the increase in profits due to good complaint handling (Davidow 2015)
• 15%-400% : the return on investment of complaint handling in function of the industry (TARP 1986)