WEBVTT 1 00:00:00.000 --> 00:00:05.480 Today, we're going to talk about how to turn complaints into profits using a latte. 2 00:00:05.480 --> 00:00:10.280 Now, I'm not referring to the drink, but to the company that came up with that acronym 3 00:00:10.280 --> 00:00:13.800 for dealing with angry customers, and that would be Starbucks. 4 00:00:13.800 --> 00:00:19.080 And latte is an acronym which is a powerful strategy to help you on the spot know exactly 5 00:00:19.080 --> 00:00:20.080 what to do. 6 00:00:20.080 --> 00:00:21.460 We've all had to deal with that. 7 00:00:21.460 --> 00:00:27.000 An angry customer or vendor, somebody's frustrated with our process or our products or our services. 8 00:00:27.000 --> 00:00:31.040 Once we've discussed latte, the second thing we're going to talk about is how can we empower 9 00:00:31.040 --> 00:00:36.080 our team to execute on the spot in resolving complaints. 10 00:00:36.080 --> 00:00:40.360 And thirdly, we're going to talk about then how to use those complaints as feedback to 11 00:00:40.360 --> 00:00:42.200 innovate and upsell. 12 00:00:42.200 --> 00:00:43.280 Let's get into it. 13 00:00:43.280 --> 00:00:53.920 So latte stands for listen, acknowledge, thank them, take care of them, and finally, explain. 14 00:00:53.920 --> 00:00:59.960 When you're listening, most of the emotional energy is dissipated when people feel heard. 15 00:00:59.960 --> 00:01:02.120 Okay, what makes people feel heard? 16 00:01:02.120 --> 00:01:07.480 Well, active listening means hitting the pause button and being present in the moment. 17 00:01:07.480 --> 00:01:13.100 Customer complaints, when a customer's complaining and you show genuine empathy, that can de-escalate 18 00:01:13.100 --> 00:01:18.540 frustration and immediately start building trust so we can open the door to a positive 19 00:01:18.540 --> 00:01:19.540 resolution. 20 00:01:19.700 --> 00:01:25.700 Peter Drucker famously said, the most important thing in communication is hearing what isn't 21 00:01:25.700 --> 00:01:27.020 said. 22 00:01:27.020 --> 00:01:28.780 So what do we mean by that? 23 00:01:28.780 --> 00:01:30.500 We're listening to what they're not saying. 24 00:01:30.500 --> 00:01:32.460 Here's a power hack. 25 00:01:32.460 --> 00:01:38.840 Is that when the person stops speaking, wait two or three seconds, one, two, look thoughtful 26 00:01:38.840 --> 00:01:40.340 and then give a response. 27 00:01:40.340 --> 00:01:45.300 Because you're looking like you're fully engaged, because you are, and you're thinking thoughtfully 28 00:01:45.300 --> 00:01:48.100 about your response, which you are. 29 00:01:48.100 --> 00:01:51.540 That is a powerful way for people to feel heard. 30 00:01:51.540 --> 00:01:53.140 Then we acknowledge. 31 00:01:53.140 --> 00:01:54.140 Don't play it down. 32 00:01:54.140 --> 00:01:55.140 Don't say it's not so bad. 33 00:01:55.140 --> 00:02:00.520 Well, it mostly works, or it works, you know, software engineers, well, it works on my computer. 34 00:02:00.520 --> 00:02:02.340 We're not selling your computer. 35 00:02:02.340 --> 00:02:05.980 I once got so frustrated with an engineer that said that to one of our insurance clients. 36 00:02:05.980 --> 00:02:09.220 I said, the next time you sell that, you and your computer can both leave. 37 00:02:09.220 --> 00:02:11.380 I was clearly then frustrated. 38 00:02:11.380 --> 00:02:13.820 Because what the point is, it doesn't matter what we think. 39 00:02:13.820 --> 00:02:17.500 We don't argue with their perspective. 40 00:02:17.500 --> 00:02:18.660 Here's the power hack. 41 00:02:18.660 --> 00:02:21.820 Restate it back to them in the way they said it. 42 00:02:21.820 --> 00:02:27.260 Try to use a phrase that they used, so they can hear it coming back to them. 43 00:02:27.260 --> 00:02:33.300 When people feel heard and they see you're acknowledging them and their complaint, you've 44 00:02:33.300 --> 00:02:36.520 already got 80% of the way there. 45 00:02:36.520 --> 00:02:41.380 You can say things like, I could see how that would be frustrating, or I'm sorry that happened. 46 00:02:41.380 --> 00:02:43.060 We want to do it better. 47 00:02:43.060 --> 00:02:44.060 Then thank them. 48 00:02:44.100 --> 00:02:47.460 Now, why are we thanking them for a negative complaint? 49 00:02:47.460 --> 00:02:49.580 Because this is a gift. 50 00:02:49.580 --> 00:02:55.700 We actually, we as people and as organizations, we grow through negative feedback. 51 00:02:55.700 --> 00:02:58.500 And when somebody's taking the time to give you feedback, think of this. 52 00:02:58.500 --> 00:02:59.500 They had an alternative. 53 00:02:59.500 --> 00:03:04.980 They could have said nothing, been frustrated, and spread their frustration out in their 54 00:03:04.980 --> 00:03:05.980 community. 55 00:03:05.980 --> 00:03:06.980 But they didn't. 56 00:03:06.980 --> 00:03:07.980 They spoke to you. 57 00:03:07.980 --> 00:03:08.980 That's the gift. 58 00:03:08.980 --> 00:03:11.540 You know, I love what Richard Branson said. 59 00:03:11.540 --> 00:03:18.180 The key is to set realistic customer expectations, and then not just to meet them, but preferably 60 00:03:18.180 --> 00:03:21.460 exceed them in unexpected and helpful ways. 61 00:03:21.460 --> 00:03:22.740 I love that. 62 00:03:22.740 --> 00:03:27.540 And you know, Branson has used this very effectively, him and his company worldwide. 63 00:03:27.540 --> 00:03:34.180 You know, when we go beyond the basics, we turn that negative into a profit-driving positive 64 00:03:34.180 --> 00:03:35.780 in the long term. 65 00:03:35.780 --> 00:03:38.420 So we're thanking them because it's a gift. 66 00:03:38.420 --> 00:03:39.820 Thank you for helping us with this. 67 00:03:39.820 --> 00:03:41.220 Thank you for bringing this to our attention. 68 00:03:41.900 --> 00:03:42.900 We really appreciate that. 69 00:03:42.900 --> 00:03:43.900 We're trying to grow. 70 00:03:43.900 --> 00:03:46.140 We're committed to delighting our customers. 71 00:03:46.140 --> 00:03:47.340 That's one of the things I like to say. 72 00:03:47.340 --> 00:03:48.340 We're committed to delighting. 73 00:03:48.340 --> 00:03:50.540 Clearly, we didn't delight you. 74 00:03:50.540 --> 00:03:52.660 So help us do this better. 75 00:03:52.660 --> 00:03:54.460 Now we're on the same side. 76 00:03:54.460 --> 00:03:59.980 So you've moved from being on opposite sides of the issue to being on the same side addressing 77 00:03:59.980 --> 00:04:00.980 the issue. 78 00:04:00.980 --> 00:04:04.780 So now we've come around to their side of the table, and we say, OK, let's look at the 79 00:04:04.780 --> 00:04:06.180 issue together. 80 00:04:06.180 --> 00:04:07.940 Now we need to take care of them. 81 00:04:07.940 --> 00:04:12.340 So now to take care of them, we need to tell them what our plan is. 82 00:04:12.340 --> 00:04:14.820 Now here is the power hack. 83 00:04:14.820 --> 00:04:22.660 Swift resolution paired with an unexpected positive gesture is a potent combination. 84 00:04:22.660 --> 00:04:28.060 Swift drivers, quick resolution, something positive, some gesture, a discount, a freebie, 85 00:04:28.060 --> 00:04:32.980 an upgrade can transform a complaint into a memorable experience. 86 00:04:32.980 --> 00:04:35.620 So they're going to remember the negative until we flip it. 87 00:04:35.620 --> 00:04:37.580 Then they're going to remember the positive. 88 00:04:38.220 --> 00:04:42.380 And that's when we start fostering real loyalty, long-term loyalty from customers. 89 00:04:42.380 --> 00:04:45.180 And that's where the profitability element comes. 90 00:04:45.180 --> 00:04:49.100 So when I talked about turning complaints into profits, I didn't necessarily mean there 91 00:04:49.100 --> 00:04:50.100 and then. 92 00:04:50.100 --> 00:04:51.420 On rare occasion, that might happen. 93 00:04:51.420 --> 00:04:53.900 But I'm talking about the longer term profits. 94 00:04:53.900 --> 00:04:57.180 Think about a company that does really well at this, Amazon. 95 00:04:57.180 --> 00:04:59.980 You know, Amazon really excels with this. 96 00:05:00.000 --> 00:05:04.680 When a customer complains about a defective product, Amazon will not only replace it, 97 00:05:04.680 --> 00:05:08.920 usually ship it overnight and also include a gift certificate as an apology. 98 00:05:08.920 --> 00:05:10.760 And you as the customer, you're impressed. 99 00:05:10.760 --> 00:05:14.440 You're like, whoa, that was quick, it was speedy, it was generous. 100 00:05:14.440 --> 00:05:15.440 What happens? 101 00:05:15.440 --> 00:05:18.560 I start to become a long-term frequent shopper. 102 00:05:18.560 --> 00:05:20.600 That's where the profitability part. 103 00:05:20.600 --> 00:05:26.160 The little bit it cost us for the extra overnight shipping, yes, we lost what the whole item 104 00:05:26.160 --> 00:05:27.160 was worth. 105 00:05:27.160 --> 00:05:29.600 But the long-term profits is what we're doing. 106 00:05:29.600 --> 00:05:37.760 So we're exchanging a short-term gift or generosity for a long-term loyalty. 107 00:05:37.760 --> 00:05:38.760 And finally, explain. 108 00:05:38.760 --> 00:05:44.200 Now, this is really important because this is when you are enrolling your customer into 109 00:05:44.200 --> 00:05:46.360 helping you make it better. 110 00:05:46.360 --> 00:05:49.880 So we say things like, this is why this won't happen again. 111 00:05:49.880 --> 00:05:53.720 We'll be careful to make changes to our training, our packaging, our shipping, our customer 112 00:05:53.720 --> 00:05:59.320 service, or I'll discuss this with the president or the team leader and ensure we make these 113 00:05:59.320 --> 00:06:00.320 changes. 114 00:06:00.320 --> 00:06:02.720 Thank you so much for helping us. 115 00:06:02.720 --> 00:06:07.440 You made a real contribution to our company to be better and we appreciate that. 116 00:06:07.440 --> 00:06:08.720 Now that is a wonderful way. 117 00:06:08.720 --> 00:06:10.040 What did we just do there? 118 00:06:10.040 --> 00:06:15.040 We made them the hero of the story, not ourselves the hero of the story. 119 00:06:15.040 --> 00:06:20.520 By the way, just as a side, a fun thing to do when you're the customer complaining, don't 120 00:06:20.520 --> 00:06:21.880 just keep complaining. 121 00:06:21.880 --> 00:06:26.360 Give the person opportunity to turn it positive and when you see them trying, go with them. 122 00:06:26.400 --> 00:06:30.440 When they succeed, stop for a minute and say, make them the hero of the story. 123 00:06:30.440 --> 00:06:31.440 Thank you so much. 124 00:06:31.440 --> 00:06:32.440 I feel so much better. 125 00:06:32.440 --> 00:06:35.760 I hope the company pays you well. 126 00:06:35.760 --> 00:06:40.560 I've sent fun things to people like that because I want them at that moment. 127 00:06:40.560 --> 00:06:46.140 So yes, we push hard when we want stuff done or something's wrong and needs to be addressed. 128 00:06:46.140 --> 00:06:51.240 But when you see the person turn, when you see them trying to come to your side, then 129 00:06:51.240 --> 00:06:53.360 acknowledge them as the hero of the story. 130 00:06:54.000 --> 00:06:58.000 When we're doing the customer service, we're making them the hero of the story. 131 00:06:58.000 --> 00:07:04.240 Now a great example of this is Zappos, who famously turned a late delivery to a loyal 132 00:07:04.240 --> 00:07:05.240 customer. 133 00:07:05.240 --> 00:07:11.400 But not only refunding the shipping, but upgrading the customer to free overnight shipping for 134 00:07:11.400 --> 00:07:12.400 life. 135 00:07:12.400 --> 00:07:14.160 That was very generous. 136 00:07:14.160 --> 00:07:21.320 So this single action generated countless positive reviews and referrals. 137 00:07:21.320 --> 00:07:25.640 Now that significantly outweighed the actual cost of the upgrade. 138 00:07:25.640 --> 00:07:33.100 So we're looking at the short term costs for much longer term customers' loyalty and profits. 139 00:07:33.100 --> 00:07:36.280 So the customer not only returned, but you can imagine the word of mouth. 140 00:07:36.280 --> 00:07:37.760 What have we done here? 141 00:07:37.760 --> 00:07:43.720 We have reframed their negative experience with us to a very memorable experience. 142 00:07:43.720 --> 00:07:48.840 So we completely reframed it and they leave feeling, I helped that company be better. 143 00:07:48.840 --> 00:07:49.840 And what does that feel like? 144 00:07:49.840 --> 00:07:51.060 Well, that's my company. 145 00:07:51.060 --> 00:07:52.300 That's my shipping company. 146 00:07:52.300 --> 00:07:55.340 That's my, you know, they're my company. 147 00:07:55.340 --> 00:07:59.160 And that sense of ownership comes because they made a contribution. 148 00:07:59.160 --> 00:08:03.580 This is very powerful and actually really easy to do. 149 00:08:03.580 --> 00:08:06.580 Really a little bit of practice and you can be really good at this. 150 00:08:06.580 --> 00:08:09.060 You can definitely do this. 151 00:08:09.060 --> 00:08:10.940 Just remember Latte. 152 00:08:10.940 --> 00:08:11.940 Number two. 153 00:08:11.940 --> 00:08:17.700 Let's talk about how do we empower the team then to execute on the spot in resolving complaints. 154 00:08:17.700 --> 00:08:24.260 I mentioned earlier about Zappos giving free overnight shipping for life. 155 00:08:24.260 --> 00:08:26.300 Well, who made that decision? 156 00:08:26.300 --> 00:08:28.820 How was that actually done? 157 00:08:28.820 --> 00:08:33.460 That means somewhere before that all happened, somebody was empowered to do it. 158 00:08:33.460 --> 00:08:40.299 A great example of this is Ritz-Carlton, who empowers every employee, regardless of position, 159 00:08:40.299 --> 00:08:47.720 up to $2,000 of discretionary spending to resolve guest complaints on the spot. 160 00:08:47.720 --> 00:08:51.940 You know, there was a story of somebody's TV that didn't work and the person who was 161 00:08:51.940 --> 00:08:56.540 cleaning the room, you remember they called it ladies and gentlemen serving ladies and 162 00:08:56.540 --> 00:08:57.540 gentlemen. 163 00:08:57.540 --> 00:08:58.540 They're not cleaners. 164 00:08:58.540 --> 00:08:59.540 They're not servants. 165 00:08:59.540 --> 00:09:00.540 They're ladies and gentlemen. 166 00:09:00.540 --> 00:09:05.380 Well, the gentleman who was attending to their room went out, bought a TV and had installed 167 00:09:05.380 --> 00:09:06.980 before the customer came back. 168 00:09:06.980 --> 00:09:07.980 They were really impressed. 169 00:09:08.020 --> 00:09:10.900 We created this memorable experience. 170 00:09:10.900 --> 00:09:16.900 We are reframing that negative into a positive by doing two things, the speed of our response 171 00:09:16.900 --> 00:09:19.260 and the generosity involved. 172 00:09:19.260 --> 00:09:20.380 Those are the two power. 173 00:09:20.380 --> 00:09:23.540 That combination, those are like power twins. 174 00:09:23.540 --> 00:09:28.340 That's what remaps the entire thing for people. 175 00:09:28.340 --> 00:09:32.220 The question in your organization then, and it would be a fun conversation to have as 176 00:09:32.220 --> 00:09:35.420 a team, who can make this decision? 177 00:09:35.420 --> 00:09:37.900 Who's empowered and to what level? 178 00:09:37.940 --> 00:09:44.140 In our organization, I'm not expecting our customer service person to be calling me asking 179 00:09:44.140 --> 00:09:46.420 if they can do this, that and the next thing. 180 00:09:46.420 --> 00:09:52.100 I have to empower the team leader to be able to make decisions and for me to trust her 181 00:09:52.100 --> 00:09:55.980 and in her decision making power. 182 00:09:55.980 --> 00:10:00.020 Part of what helps with this is we do not see customer service as the back office. 183 00:10:00.000 --> 00:10:03.480 Where, you know, the real sales and the real business is done here. 184 00:10:03.480 --> 00:10:05.520 And then there's that customer service stuff in the back. 185 00:10:05.680 --> 00:10:08.800 We see customer service as the pointy end of the spear, 186 00:10:09.200 --> 00:10:11.760 because that's what we're hearing from customers. 187 00:10:11.760 --> 00:10:14.080 They're telling us how we can do better, 188 00:10:14.320 --> 00:10:18.920 how our products and services are landing with them, where the difficulties are, 189 00:10:19.120 --> 00:10:24.160 how sometimes it's hard to deal with us or we make things unnecessarily difficult. 190 00:10:24.200 --> 00:10:26.760 We add too many steps in and we create confusion. 191 00:10:26.960 --> 00:10:29.360 All that's coming from customer service people. 192 00:10:30.000 --> 00:10:35.160 Now, to to do it quickly and generously, it means they must be empowered. 193 00:10:35.360 --> 00:10:37.880 So this is the rule we use. 194 00:10:38.080 --> 00:10:43.760 If a short term cost will produce a long term customer, then do it. 195 00:10:43.960 --> 00:10:46.720 And so we've discussed the broad boundaries of that. 196 00:10:46.920 --> 00:10:48.640 And so on occasion, you know, 197 00:10:48.840 --> 00:10:53.080 we see sort of an odd value coming in and go, we don't sell a product for that price. 198 00:10:53.280 --> 00:10:55.600 Well, I gave them a 60 percent discount or I did. 199 00:10:55.800 --> 00:10:58.840 We were generous because of the situation. 200 00:10:59.000 --> 00:11:01.440 I don't know that I've ever questioned our 201 00:11:01.640 --> 00:11:07.200 customer service manager on any of that because I entirely trust her judgment. 202 00:11:07.400 --> 00:11:11.240 So if you do not trust the judgment of the people you're talking about, 203 00:11:11.440 --> 00:11:15.360 then that's a good conversation to have to why and maybe put some boundaries 204 00:11:15.560 --> 00:11:18.680 around it so that everybody can feel like it's really happening. 205 00:11:18.880 --> 00:11:22.280 Number three, how do we then use complaints 206 00:11:22.480 --> 00:11:26.440 as a feedback mechanism to innovate and upsell? 207 00:11:26.680 --> 00:11:28.600 You know, Bill Gates famously said your 208 00:11:28.800 --> 00:11:33.040 most unhappy customers are your greatest source of learning. 209 00:11:33.240 --> 00:11:39.160 I love that because complaints often are a very powerful way we can fuel 210 00:11:39.360 --> 00:11:43.440 innovation and even profitability if we do it correctly. 211 00:11:43.640 --> 00:11:48.320 So when we treat complaints as like free market research, right, 212 00:11:48.520 --> 00:11:53.440 they're coming to us, they're telling us what a gift it allows us to improve our 213 00:11:53.440 --> 00:11:56.520 products and services and to really tailor them. 214 00:11:56.720 --> 00:12:00.640 Often we find upsell opportunities when we start tailoring it, 215 00:12:00.640 --> 00:12:03.240 listening to the customer, understanding what they're doing. 216 00:12:03.440 --> 00:12:05.400 You know, we can really directly convert 217 00:12:05.600 --> 00:12:10.320 dissatisfaction into additional products, revenue and so on. 218 00:12:10.520 --> 00:12:12.360 So here's what we want to do. 219 00:12:12.560 --> 00:12:17.800 We want to change and reframe customer service as the pointy end of the spear. 220 00:12:18.000 --> 00:12:19.760 And when we see a complaint, 221 00:12:19.760 --> 00:12:24.120 we are reframing that as a positive gift to the organization. 222 00:12:24.120 --> 00:12:25.640 They could have been quiet and suffered 223 00:12:25.640 --> 00:12:28.520 quietly and just told everybody else about the negative experience. 224 00:12:28.720 --> 00:12:31.080 And then thirdly, we are going to reframe 225 00:12:31.280 --> 00:12:34.520 their experience from a negative to a really memorable one. 226 00:12:34.720 --> 00:12:37.840 Why? Because we acted quickly and generously. 227 00:12:38.040 --> 00:12:39.000 I hope that was helpful. 228 00:12:39.200 --> 00:12:42.040 So remember Latte, remember to decide 229 00:12:42.240 --> 00:12:47.680 on how to empower the team to execute on the spot and use complaints to drive 230 00:12:47.680 --> 00:12:50.680 innovation and new products. Enjoy.