With complaints to the UK communications watchdog, Ofcom, continuing to rise and almost 15,000 complaints a day being made to the FCA about financial services organisations, companies must be prepared to do more than ever to retain customers in the wake of a negative experience, according to The Grass Roots Group.
The prevalence of social media has meant that negative interactions with a business spread to twice as many people as positive ones, and a massive 65% of us now rely on Twitter to get in touch with companies rather than going through a call centre.
This very public and immediate way of complaining could be extremely damaging for those companies who don't react in the right way, and result in them losing existing customers as well as alienating new ones.
Figures have shown that reducing customer defection rates by just five percent can increase profits by between five and 95%, making it all the more important to respond to unhappy customers at the right time and in the right way.
Indeed, responding with the right gesture has been found to increase customer retention rates to a massive 70%.
"A simple and timely gesture can mean the difference between a customer sticking with you and singing your praises, or shouting about their bad experience all over social media where it will spread like wildfire," said Vikki Zelkin, head of client services, promotions and incentives for The Grass Roots Group. "The first step is to resolve the issue as quickly as possible, following up with a timely and unexpected gift to show that you value your customers, making them think twice about taking their business elsewhere."
However, it is not only those customers who shout the loudest that could be damaging to a brand: For every person that does complain, it is often cited that there are 26 more who don't contact the company about their problem, choosing instead to show their dissatisfaction by defecting to a competitor.
"Businesses need to ensure they are not only responding to the vocal minority but also the silent majority," concluded Zelkin.