Sam Walton said, “There is only one boss—the customer. And he can fire everyone in the company—from the chairman on down—simply by spending his money somewhere else.”

Dealing with an unhappy customer doesn’t mean the customer is always right, but dealing with customer complaints presents frontline employees the chance to show your organization really cares about treating them with respect. The outcome determines your customer’s perception, which will impact, ultimately, your organization’s future business climate.

A study from the Profit Impact of Market Strategy project of the Strategic Planning Institute involved 3,000 business units in 450 companies. The analysis showed that the top 20% of the business units with high positive customer perception averaged a 32% return on investment (ROI). The bottom 40% averaged 14% ROI.

In the last few years, there has been a plethora of literature on how to deal with unhappy customers who actually voice a complaint. As few as 4% of dissatisfied customers let an organization know of their problem. The other 96% vote with their feet and take their purchasing power with them.

Below are a few principles to handle unhappy customers who voice their complaints.


Treat internal associates as external customers. An associate can be defined as an internal customer who is anyone in the organization affected by the product or service as it is being generated. In Tom Peters’ book, “Thriving on Chaos,” he stressed that it is impossible to get people’s best efforts, involvement and caring concern for things your organization believes important to your customers if they aren’t treated with respect, honesty and trust.

When associates are satisfied with their treatment, given the right tools to do the job, and supported by management, customers are more likely to have higher perceptions and are more likely to continue to do business with your organization. To cite one study, a fast food chain found that 20% of their stores with the lowest employee turnover rate doubled sales and had 55% higher profits than the 20% of stores with the highest employee turnover rate.

Organizations would best keep in mind that if the external customer is king, then the internal customer is a prince.


Select and train frontline associates carefully. An organization’s “customer-contact” associates are in direct contact with customers and represent the face of the organization—good or bad. Frontline employees need to be selected from key behavioral characteristics, trained, and retrained. Organizations should remember the turnover statistics cited above and remember that this important training effort should not be cut during tough times.


Defuse the situation. A few years ago when training people to go out to customer sites, I stressed “act as if the customer is always right, then back up from there.” What this meant in practice was to defuse the situation and let cooler heads prevail to resolve the situation.

Anger is like a volcanic eruption. We shouldn’t try to interrupt the volcano while it’s spewing lava! Once the eruption is over, acknowledge the customer’s anger by saying something like, “I know you’re angry. I would be too.” If that doesn’t calm the customer’s anger, remove the person, if possible, from the crowd so he or she can subside without losing face in front of the other customers. If the issue still can’t be resolved, seek assistance but try to be viewed, by the customer, as being their advocate.


Measure your words carefully. Avoid saying anything that sounds like a command or contradiction. For instance, don’t say “You must.” Say “I need you to.” Avoid words like “but” and “however” because the unhappy customer will only hear the words that follow these qualifiers. If you have to say no, then first “put a look of regret on your face or make an ‘effort’ sound.” Say you’re sorry you can’t do X, then explain why, then suggest an alternative solution.


Strive for a partnership. Talk about solving the problem together. Make your challenge the customer’s challenge. What are we going to do? Try to avoid handing him or her off to someone else, but if you must (assuming the customer is on the phone), ask for their phone number in case they get disconnected and then stay on the line until the person you’re handing them off to is on the line.


Get personal. Address the unhappy customer by name, and give him or her your name, too. If the customer hurts your feelings, let him know. This helps create a personal affiliation and can actually help defuse the situation.

Customers actually buy expectations, not just products and services. Maybe that’s why many become disgruntled. Henry Ford said, “If you satisfy the customer, you win the game.” Isn’t that what we’re all wanting?