Posted by: Mike Plett | November 11, 2013

Complaints: a nuisance, threat or opportunity?

The authors of “Online Consumer Complaint Behaviors: The Dynamics of Service Failures, Consumers’ Word of Mouth, and Organization-Consumer Relationships” argue that companies should view customer complaints as critical sources of feedback. As they note, “If consumers do not complain, the organization will miss crucial information regarding its sales losses” (Bach & Kim, 2012, p. 60).

Nevertheless, it seems most people and organizations miss this insight and instead view complaints as nuisances (at best) and threats (at worst). That is why many companies that adopt a defensive approach to negative word of mouth tend to be low performers, while companies that adopt a proactive approach tend to be high performers (Bach & Kim, 2012, p. 59).

A case in point is software company QuarkXPress. According to quarkvsindesign.com, Quark owned about 95 percent of the desktop publishing market in the mid-1990s to early 2000s. Yet the company developed a reputation for terrible customer service and support as it ceased innovating. Seven years separated Quark 4.1 and version 5! Quark’s competition Adobe, on the other hand, rapidly innovated and enjoyed a relatively positive reputation for customer service and support. By 2010, Adobe’s InDesign was the industry leader, while Quark was relegated to less than 25 percent of the market.

This is an oversimplification, but the point remains that Quark failed to respond to critical feedback and suffered the consequences. How do organizations safeguard against defensive reactions to complaints? How does an organization cultivate positive relations with its external stakeholders?

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