Friday 12 April 2019 12:02 pm

Don’t be afraid of bad reviews, they are good for business

Follow Lindsay Willott

It is human nature to find negative feedback uncomfortable. It’s the same whether it’s personal – such as memories from that mean teacher, or having to face that critical relative at a family gathering – or in business, when a boss doesn’t rate something that you believe in, or having to go through the dreaded “areas for improvement” in your appraisal.

The fact is, it doesn’t feel nice, and we are hard-wired to resist it.

The same goes for customer feedback. Businesses find it scary. They would prefer to focus on the positive and discount the negative. In reality, the reverse would be a better business strategy. When you aren’t hearing negative feedback, you aren’t growing. Take it from Seth Godin, marketer and author, who wrote: “one disappointed customer is worth as much as 10 delighted ones”.

Read more: There is now a beer brewed by AI… and it takes feedback

Most customers (96 per cent, to be exact) won’t bother to give you negative feedback. They’ll just leave.

For the four per cent who do complain, they’ve not only given you an opportunity to win them back, they’ve given you valuable information on what you need to improve, allowing you to tailor your service and fix problems before they even arise.

And you’re not just impacting retention with that one customer.

When you make sweeping changes based on trending feedback, you’re boosting retention across your entire customer base. Increasing retention rates by five per cent can raise profits by 25 to 95 per cent.

With that in mind, you should be begging customers for critical feedback (and begging them to share it directly with you first, rather than social media), not hiding from it.

The key to success is asking for that critical feedback in the right way. This crucially means capturing negative feedback at a time when you can do something about it – after all, customers are mobile, social, and busy.

With that in mind, you can forget about long detailed surveys that customers rarely respond to anyway.

Think about how you can be quicker and smarter, so that you can get feedback and insight on every part of a customer transaction – from ordering a product, to their experience with it, how well questions are resolved, and so on. A bad response can be swiftly dealt with, and lessons applied across the business.

To fully square the circle, it’s also key to let the customer know that their negative feedback has been recognised and action has been taken.

This can often change an unhappy consumer into a fan. Nothing means more to someone than feeling listened too and having their negative experience taken seriously.

Read more: How to avoid a feedback faux pas in the office

Once a business is getting insights into bad feedback and, more importantly, acting upon it, there will be a huge impact on retention, profitability, continuity, and scalability. Surprisingly, it also has a positive effect on new customer acquisition, because existing buyers who are delighted by a company’s treatment of them will tell their friends and colleagues.

By seeking feedback from everyone who buys – both positive and negative – and taking swift corrective action, we give ourselves the very best opportunity to keep people happy and resolve issues that we were previously unaware of for future customers.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.