Business Advice, Startup Advice

Your company’s made a mistake or received a complaint: Now what?

Emma Koehn /

You’ve made a mistake. Your systems are offline, or a promise you made to shoppers wasn’t delivered. Perhaps customers are complaining about an ad you had passed through countless focus groups, or your startup is facing backlash for something nobody could have seen coming.

It feels bad, and academics and entrepreneurs both agree that it should. The question is, what to do next? How do you move forward in the age of endless online commentary?

As academics from the Wharton and London business schools explained last year, their research indicates more needs to be done at a company-wide level to measure the ‘return on investment’ from failure.  

Researchers Julian Birkinshaw and Martine Haas suggest a good starting point to squeeze lessons out of mistakes is through “Three F” reviews: fast, frequent and forward-looking post-mortems that can help your staff move away from errors and towards behaviours that will more likely lead to success.

But in the moments after a complaint has been received or a big problem detected, how should you act? We asked company founders and experts for their best strategies.

Ditch the blame game

If a customer or group is facing troubles because the service you’ve promised hasn’t eventuated, there’s no point in getting into excuses or denial says Penny Spencer, founder of multimillion-dollar travel business Spencer Travel.

“What I have always done and have advised my staff to do the same is always to not make any excuses or blame something or someone else. If it is truly our error — admit it, fix it and apologise,” Spencer says.

Looking for someone to blame wastes time, and while Spencer says sometimes you’ll face an error that was caused by another party, such as a supplier, any strategies to remedy this should be focused on resolving the issue for the customer, rather than waiting until the post-mortem is complete. 

“There is nothing worse than being advised ‘we are looking into it’, and two weeks later, you finally get a response,” Spencer says. 

Founder of healthy snack business Health Lab, Jess Thomas agrees, explaining that while her business has made its “fair share” of mistakes, she says any problems customers have when interacting with her business reflect the brand, so there’s no point wasting time before acting.

“It never works if you try and ‘cover’ up a mistake or blame other parties that may be involved. At the end of the day, the experience was with your brand — so you have to take 100% ownership,” she explains.

A company can prevent the blame game from ever occurring in the first place by making sure clients have as much detail as possible before starting to work for them. Founder of custom-made jewellery business Larsen Jewellery, Lars Larsen, says good service begins by drilling down into what customers want in the first place, so disappointment is prevented as much as possible.

We are very thorough in making sure we are producing exactly what the customer wants and exactly what they envisage,” Larsen says. 

Make peace with the heartbreak of it

The bigger you get, the more willing you’ll have to be to engage in all types of communication with clients, says founder of digital consultancy ntegrity Richenda Vermeulen.

The worse case scenario is not having any feedback so you’re operating with blinkers on — and only using your perspective to drive results. This becomes all the more important the more you are removed from your customer or client,” she says.

Reflecting on her blog recently about the past five years of her business, Vermeulen wrote that overall, you just have to cop the idea that mistakes might cause you pain, but you have to face them anyway.

When you’re the founder you won’t be shielded like you once were in an organisation,” she says.

Founder of online beauty retailer AMR Hair and Beauty, Ammar Ahmad, says sometimes, you won’t be able to make complete amends for an error, but accepting that fact will let you get on with making the best of it for the client. 

In some cases we are unable to erase the damage but we will always spend time identifying the cause of concern to ensure we don’t encounter the same problem or make the same mistake twice,” Ahmad says.

Daniel Flynn, co-founder of consumer goods brand Thankyou Group, believes developing a philosophy for how you’re going to interact with customers if something does go wrong will also make sure you come across as a real person, rather than an amorphous brand.

Above all else, be human. And treat everyone like Beyonce,” he advises, saying his business’s customer service staff operate with the mantra “Go above and Beyonce”, or in other words, aim to treat everyone like a VIP.

Thankyou also has a policy of saying “sorry”, and while many entrepreneurs might be cautious about using that word, Flynn says it keeps the team accountable. 

“This can be a bit controversial because a lot of people are told by legal teams not to apologise as it’s seen as admitting fault, which is the exact reason why we choose to apologise. If a product hasn’t worked or has a fault, then that’s on us,” he says.

Know your game plan, even if complaints are not rational 

In June, Brisbane bookshop Avid Reader faced the kind of complaints a business might otherwise ignore altogether when disgruntled social media users started leaving one-star Facebook reviews for the business after it posted support for author Clementine Ford’s second book deal.

This, according to public relations expert and director of InsideOut PR Nicole Reaney, is a type of complaint where it’s possible to think about just staying quiet. She reminds business owners there can be “certain situations with repeat offenders looking to troll or seek some monetary reward, or where your organisation has taken all reasonable steps to resolve and the situation is unlikely to re-occur”.

Even though the complaints in this case came from trolls and were not about a genuine problem with one of the store’s products or its service, Avid Reader’s social media manager Christopher Currie said knowing how to face the situation head-on was easy, because the business already had a strong idea of its identity.

“We have a strong set of values that we stick to, and these don’t include submitting to the concerted attacks from “Men’s Rights” activists. Basically, if you treat us with disrespect, except the same back,” he said in June.

Reaney says even when faced with a notoriously difficult customer or an unusual set of circumstances, it can still be worth engaging with the complaint publicly, so long as you’ve taken time to think about the channels your business uses to reach customers and your broader policies.

“If it’s a public forum like social media, it doesn’t hurt to publicly inform the steps taken by the company [to address a public complaint]. This is where your brand ambassadors can step in,” she says. 

For other situations where customers need to be notified about a problem, businesses need to make sure their strategies both deal with the issue and stop it from becoming bigger than it needs to be, she says.

“Organisations need to be sure they take the necessary steps to contain and manage the situation,” she adds.  

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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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