This post is part of the Customer Service Myths Series.

Customer Service Myth: We have few complaints, therefore almost everyone is happy.

Fact: Few customers complain, especially to headquarters or a manager.

A recent airline flight was delayed by a minor maintenance issue – we ended up arriving more than 90 minutes late.  Although the crew relayed information on the flight status to the passengers three times, not once did the flight crew, flight attendants, or the gate agents apologize for the delay. (The misguided hope seems to be that if the problem is never acknowledged via apology, perhaps a portion of astoundingly unobservant customers will never notice the problem.)  Even when they announced the time upon landing, they never acknowledged that the flight was an hour and a half late.  They did, however, say they hoped that they would see us again on another flight.

What was even more surprising was the fact that not one customer complained to anyone – so the airline had 200 unhappy passengers and no complaints.

This story illustrates that non-complaint behavior reinforces management complacency.  While Janelle Barlow’s book says “A Complaint is a Gift,” the problem is that relatively few customers with problems complain.  Most of the non-complainants become less loyal and spread negative word of mouth. No news is not good news!  Therefore we have the Iceberg Effect: The problems you don’t hear about from customers do at least five times as much damage as the problems you do hear about.

The vast majority of customers don’t complain because of one of four reasons:

·      it is too much of a hassle

·      they feel it will do no good – they assume that the company doesn’t care

·      fear of retribution from one of your staff,  or

·      they don’t know where to complain.

This means that if you get 10 complaints at a headquarters 800 number, you could easily have 250 to 1,000 customers with similar problems who you do not hear from, resulting in an average decrease in customer loyalty of at least 20% or losing one out of every five silent, dissatisfied customers to competitors. This means that the 10 complaints could imply a loss of 50 to 200 customers! (Calculation is 20% drop in loyalty times 250 and 1,000 customers, respectively.)

Three approaches to mitigating the damage of the iceberg effect:

1. Aggressively solicit complaints via messages on invoices, websites and in stores.  Several companies have signs, banners or labels that say, “We can only resolve the problems we know about!”

2. Effectively interpret your complaint data by scaling it up to the marketplace using a multiplier, that is, a factor that estimates and quantifies the size of iceberg.  This ratio is usually between 1:10 and 1:200. (For guidance on how to estimate multipliers, attend my webinar, Selling Service to the CFO,  on April 16th – register here)

3. Listen to feedback both given to and provided from retailers, as well as operations data to understand the end-to-end customer experience.

In next week’s blog, I’ll dispel the misconception that customers buy solely off price.