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The Ultimate Guide to Dealing with Unhappy Customers (with Examples!)

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Unhappy customers are a problem for any business.

But contrary to popular belief, it’s not just your reputation on the line when your customers are dissatisfied. Your revenue and profits also depend on customer satisfaction.

(Don’t believe me? Harvard Business Review found that customers who have good experiences spend 140% more than those who have a poor experience.)

But if your complaints line is red hot, it could cause major problems to spread. One report found that unhappy customers will tell between 9 and 15 people about their experience, while 13% of people tell as many as 20 others if they’re unhappy.

That’s a whole lot of people who could be seeing a biased, tarnished reputation.

Customers can complain about pretty much anything, including these common problems:

  • Slow shipping
  • Hidden fees
  • Faulty products or software
  • Poor customer service

Here’s the good news: Whatever the problem may be, we’ll show you how to deal with unhappy customers to help protect your company’s reputation (and profits).

Let’s dive in.

How important is it to keep customers happy?

Still don’t think unhappy customers are a problem?

Even if you sell a one-off product, you’re dead wrong if you believe customer satisfaction isn’t important.

You need to keep everyone who purchases from your company happy because:

Of course, unhappy customers are also more likely to take their business elsewhere - potentially to a competitor you’re working so hard to beat.

In fact, 91% of dissatisfied customers will stop doing business with you, without even voicing their complaint.

And if that’s not enough to convince you, consider this: 80% of your future revenue will come from just 20% of your existing customer base.

Now you can see why keeping your customers happy is so important.

Unfortunately, pretty much every company will receive complaints or unhappy customers at one time or another. So how do you handle them?

First things first: apologize.

You know the saying (even if you say it through gritted teeth): “The customer is always right”.

But for any business owner or marketer, it’s true. Even when it’s not technically true.

The first thing you can do to make it up to your customer is apologize, even if the issue isn’t your fault or under your control - such as a delay with your supplier, or an industry-wide problem (like the economic crash.)

There are six parts to an apology:

  1. An expression of regret
  2. An explanation of what went wrong
  3. An acknowledgement of responsibility
  4. A declaration of repentance
  5. An offer of repair
  6. A request for forgiveness

Throughout each stage, it’s important to show remorse.

Why? Because people are more likely to forgive a company if they’re offered an apology versus compensation.

One company who put this into practice was O.B. Tampons. When they had an issue with their supply chain that caused their products to disappear from store shelves, their customers were understandably displeased.

But instead of keeping their heads in the sand, the company went above and beyond, creating personalized apology videos for every single customer

There were over 10,000 videos made in total. That's a time-consuming effort, but one that helped make the apologies more personal and generated positive PR coverage from an initially challenging issue.

Talk about making the best out of a bad situation!

How to Handle Unhappy Customers

By this point, you already know that keeping customers happy should be a huge priority.

So, how do you apologize to your customers, express your remorse, and convince them you’re worthy of another purchase?

The short answer: It depends on the platform.

Handling complaints over the phone

Resolving customer service complaints on the phone can be tough.

No sooner have you picked up than a barrage of abuse from a disgruntled customer comes your way - before you’ve even had time to think!

Limited thinking time that comes with phone conversations could lead to you making promises you haven’t checked whether you can keep. You could also forget to provide important information, or struggle to calm your customer down in order to find out exactly what’s happened.

That doesn’t mean it’s impossible, though. It just takes practice.

Next time you handle an unhappy customer over the phone, try to:

  • Take your time by listening to the problem and taking notes. This will help you to plan your response properly, rather than saying something off-the-cuff at the last minute.
  • Avoid putting them on hold, or transferring them to other people on your team several times.
  • Remain calm and keep your own emotions in check, especially with highly-charged customers. This can avoid making the customer more irate than they may already be.

Here’s business coach Lindsay Anvik explaining why this can help to resolve customer issues:

“More than anything, people want to be heard. So when a customer is complaining, don't get defensive. Instead, ask them to tell you more about what they went through. Show them you care. Sometimes just this alone is enough to satisfy the customer.”

Responding to negative public reviews

Unhappy customers leaving negative reviews can be devastating for your business.

If they’re slating you publicly (and you don’t give a satisfactory response), other people could be influenced to avoid purchasing from you or using your services.

But here’s where things get tough:

In the digital age, it’s really easy for consumers to share their views in public and on social media. That means you need to have your finger on the pulse and be reactive to minimize the damage of a public complaint.

Regardless of how bad the complaint might be, you should always respond publicly.

A public apology shows you’re committed to customer service, and promising you won’t let the issue happen again could be comforting for future customers reading it.

You should also:

  • Avoid diving into detail publicly. Take the conversation private to get more details on your customer (including their order history or delivery address) and iron out the issue.
  • Sign off with your name if you’re using a brand account to make responses feel more personable.

Time is of the essence when replying to online reviews - 42% of consumers expect a response within 60 minutes.

Take this tweet by Starbucks in response to an unhappy customer, for example:

It ticks all the boxes: Their response offers an apology and empathy with the complaining customer, before taking it to a private conversation. And it also offers a personal touch as the social media manager signs off with their own name.

But sometimes, complaints and negative reviews aren’t delivered straight to you - meaning you may be unaware they even exist.

(For example, not all users will tag your social handles when complaining.)

That’s why it’s also worth considering using a social listening platform like Mention.

Social listening can help aggregate mentions of your brand so you don’t miss a thing, which is vital for reputation management.

Dealing with unhappy customers via email

Email complaints can be lengthy, and it’s often the last resort for many unhappy customers, meaning they’re serious.

You need to take action quickly before losing them as a customer forever.

If you have a displeased customer invading your inbox, follow these tips to deliver a helpful reply and resolution:

  • Be personal and show that you value them.
  • Log and make note of any previous discussions so both parties have proof.
  • Clearly state your next steps and give timescales for when they should expect to hear back.

It’s important to remember that the email complaint will likely have taken some time for the customer to put together. So, make sure you match that by offering a well-written and considerate reply.

This email template from HubSpot is a great one to use when dealing with email complaints.

Should you offer compensation when a customer complains?

Often, a complaining customer will expect some kind of compensation. Or you might feel that it’s the right thing to do by way of apology.

The best thing to do is to check with your legal team. If contracts are involved or you’ve made a mistake, you may have no choice but to offer some form of compensation.

But even if you’re not legally obliged to, you could still offer compensation as a gesture of goodwill to encourage the customer to purchase again or prove you’re sorry.

You could also offer compensation in the form of:

  • Discount on the customer’s next order
  • Fast and free replacement
  • Free return postage

Although compensation can have an impact on your revenues and margins, it’s often a good way of helping to repair the relationship with an unhappy customer.

Just remember to ensure it comes as part of a heartfelt apology.

Customer satisfaction doubles when compensation is offered with an apology, compared to compensation without an apology.


Here’s Emily Brereton, Marketing Director at Napkins-Only, explaining her process for determining whether an unhappy customer should receive compensation:

“We want to provide friendly, trustworthy customer service and comping unhappy customers (even if we played no part in their unhappiness) is definitely part of that. So, if it's an unforeseen manufacturing issue, we comp that. Most customers understand that errors happen, and if they feel respected and understood, (that includes fairly compensated), we generally won't lose the client.

But, there's a limit. We don't comp for issues we've warned about ahead of time (such as artwork intricacy). If the customer goes ahead and ok's the order, knowing the risks, and then complains, we don't comp for that.”

How to Create an "Unhappy Customer" Process at Work

Knowing how to deal with unhappy customers is one thing, but putting it into practice is another.

It only works if everyone is on board.

Here’s how to create a process to ensure unhappy customers are dealt with quickly and efficiently (and that they don’t spread the word about their negative experience).

1. Create an agreed procedure, and train your teams.

Customer complaints shouldn’t be the sole responsibility of your senior customer service reps.

Your entire team should be handling complaints and dissatisfied customers, so they should be comfortable with how they’re expected to deal with them.

That’s only possible by creating an agreed process for dealing with unhappy customers, like this example:

Your process should detail everything from responding to phone calls to offering compensation.

Then, once that process is in place, intensively train colleagues (with real-life scenarios!) to make sure they’re comfortable with what they should do.

2. Log common complaints and issues.

Although no business likes to receive complaints, it’s important to keep track of ones that do come in. That could be anything from slow delivery to the small selection of appointments you have available.

Keeping a log will help identify patterns or common issues that may suggest a deeper problem.

When you have a complaints tracker, you can discuss with relevant teams and make changes to the affected areas of your business to improve your relationship with your customers.

3. Use templates to streamline the process.

Have you noticed a common problem that accounts for a huge chunk of customer complaints?

Consider creating templates for email scripts, social media reviews, and telephone responses to reduce the time your service team spend crafting responses.

However, don’t forget the template is just that - a template.

You should include relevant information about the customer and/or their complaint so that it feels personal. Don’t just copy and paste the same template to everyone!

4. Ensure you have enough resources to handle customer service issues.

If you’re a small business, you may have people doing several jobs at once. That’s fine, as long as it doesn’t become too much.

The last thing you want is for your employees to become unhappy, too. So if you’re seeing complaints coming in via multiple channels, consider your team resources.

You may need someone manning the phones and handling email inquiries, while another monitors social media and digital reviews to ensure a timely response.

That way, team members can “own” one channel - and focus on converting every unhappy customer into a repeat one using the techniques they’ve mastered.

Unhappy Customers are as Important as Happy Ones

Let’s be honest: It hurts when somebody complains or says something negative about your products or services.

But as unpleasant as it is, having unhappy customers can actually be a positive thing. If the only feedback you get is positive, you can lose sight of what’s going on in your business and where you stand to improve.

There are people that complain, but there are more people that don’t, so making changes based on your customers’ feedback helps improve your service to those suffering in silence.

The tips we’ve mentioned here will help you manage your time better and resolve issues more efficiently, allowing you to focus on creating an amazing experience for the people who matter most to your business: Your customers.

Related: 6 Steps to Handle Negative Customer Reviews Successfully