By taking prompt and constructive action, businesses can often turn consumer discontent into customer loyalty . It is generally recognized that in the long run, business profits are tied to the company's ability to satisfy the customer. Effective complaint handling generates new income by instilling loyalty in customers. Even when a customer does complain, one out of every two will not be thoroughly satisfied with the company's efforts to solve the problem. Dissatisfied customers typically tell between seven to nine other people when they have had an unsatisfactory experience with a company.
Negative information has twice the impact of positive information on purchasing decisions.
The TARP study clearly reveals that complaints are one of the most important forms of communication between a business and its customers, and constructive responses to complaints can help retain customers who would otherwise be lost . Most customers complain because they purchased a product or service with certain expectations, and, for any number of reasons, those expectations were not met. Better Business Bureaus consistently find the following to be among the major causes of consumer complaints they handle. If it were possible to isolate the single factor that most contributes to customer frustration, it would probably be the lack of a visible and continuing means for customers to communicate their concerns to someone who they believe cares. The foundation of customer goodwill is the existence, promotion, and practice of a sound customer relations policy.