Small Business Leadership Academy

Small Business Leadership Academy: Handling Dissatisfied Customers

If you are in business, you’ve had unhappy customers. No matter how excellent your services or products, at some point someone will have issues. Customers often experience buyer’s remorse — it’s a simple fact. And because nothing is perfect, even the best businesses make mistakes. So, how can business owners handle the inevitable?

Douglas Olsen, associate professor of marketing, says businesses often “abandon the customer after the sale” — that is, they don’t follow up. And because only four percent of dissatisfied customers speak up, chances are there are folks out there who interacted with your company and don’t feel warm and fuzzy about it.

Olsen, who is teaching the marketing class in the W. P. Carey School’s Small Business Leadership Academy, says there are practical steps that any company can take to respond to customers who are unhappy with their experiences. Research — much of it pioneered at the Center for Services Leadership at W. P. Carey — shows that dissatisfied customers can be turned into loyalists if the service breakdown is addressed wisely.

For starters, Olsen recommends developing a system for keeping in touch with customers. This can be as simple as a phone call or email. Second, make sure customers you’re your policy on dispute resolution, and where and how to complain.

Here are a few things to remember when the news isn’t good — and handling dissatisfied customers:

  • Other stresses in your customer’s life are probably affecting his feelings about your business.
  • Listen actively: What are their thoughts? What’s their rationale? Focus on solutions.
  • Step outside yourself and don’t make assumptions; try to see the situation through your customer’s eyes. Be empathetic. Show your customer that he/she has your full attention.
  • Restate the problem so that you can be sure you have understood correctly.
  • Make sure your customer knows what the next step is, and when he/she will hear from you again.

Training may be needed to assure that your employees know how to handle an unhappy, sometimes angry, customer. They should have some flexibility to offer resolution, and they should know who is responsible for implementation. Olsen says there is rarely a reason to be defensive — a stance that only aggravates the situation.

A customer who lets you know that something is amiss gives you the opportunity to improve your business — and ultimately increase the number of happy loyal customers.
Looked it that way, Olsen says, a complaint is a gift!


Listen to the podcast: “Why Complaints are Good for Business”


The Small Business Leadership Academy (SBLA) is an intensive executive education program designed to strengthen the business acumen of small business leaders in Arizona. The program was jointly developed by the W. P. Carey School of Business and the Salt River Project (SRP), the program’s founding sponsor. Other seat sponsors this year include: Arizona Lottery, Blue Cross Blue Shield of Arizona, Hahnco and U.S. Bank. Each week we will bring you a few salient points from each class as well as comments from the professors themselves and the impact the information has had on the students.

For more information about the Small Business Leadership Academy, please visit SBLA’s website.