Harvey Norman tops list of NSW business complaints, but will it have an impact on the brand?

Former Harvey Norman franchisee fined $52,000 for misleading customers about their guarantee rights

Australian retail giant Harvey Norman has found itself at the top of the list for customer complaints on New South Wales Fair Trading’s March complaints register.

The business received 43 complaints to NSW’s office of fair trading during March. This is 14 more complaints than what Apple, the business next on the list, received. The complaints were directed across 25 different Harvey Norman stores in NSW, with the most stemming from its Liverpool store.

Harvey Norman has been a regular feature near the top of the Register, receiving 29 complaints in February and 34 in January, where it topped the list again.

Last month the retailer was third on the list of most complained businesses. It was beaten out by Apple and online florist business Bloomex, which garnered a record-beating 47 complaints. At the time, NSW Fair Trading said “no company had come close” to 47 complaints, though Harvey Norman has landed just four complaints away from that number in March.

Harvey Norman boss Gerry Harvey has previously shrugged off poor consumer confidence surveys, claiming in 2015 his business was the “hottest retailer on the market”. Brand analyst Michel Hogan believes it would take a lot more than the register to affect the retailer in the long term, saying complaints require a “multiplier effect” before having any real impact.

“These complaints rarely have any impact on organisations in the short term,” Hogan told SmartCompany.

“There’s a two or three feed complaints economy, and it’s become the de facto solution to go loud and proud on social media if you want to get noticed and drive short-term change.”

“If people want to air their grievances, they’ll take to social media.”

Beware the “multiplier effect”

Hogan says official complaints coming through channels such as Fair Trading or business’ websites are unlikely to impact a brand’s image in any short or long-term way, and highlighted the significance of social media when it comes to damaging a brand.

“In regards to the 43 complaints to Fair Trading, I doubt Harvey Norman is losing any sleep over it, they’ve got a whole internal machinery to deal with customer’s day to day complaints,” she says.

“One complaint to Fair Trading is unlikely to affect the organisation in any way.”

What businesses should be looking out for is the “multiplier effect” that numerous complaints can cause, says Hogan. As people are more likely to discuss bad experiences rather than positive ones, numerous complaints across different channels can cause businesses damage.

“A fundamental shift has occurred in how we deal with complaints. It used to take a lot of complaints to scale into a big deal, now one person complains and it’s a front page story,” Hogan says.

“Social media means the megaphone is much bigger, and when that causes a storm of people complaining and discussing the complaints, that’s when it can have a long-term impact.”

With the imminent arrival of competing retailer Amazon, Australian retailers may need to lift their game, despite Harvey recently claiming that locals have the upper hand in facing the unique logistical challenges of doing business here.

“At Harvey Norman our skills set have been built up over 35 years. You can’t do that over from scratch, it doesn’t happen, as you run into so many different ­obstacles,” he said.

“That’s 100 percent guaranteed they will run into trouble”.

SmartCompany contacted Harvey Norman but did not receive a response prior to publication.

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on TwitterFacebookLinkedIn and Instagram.

You can help us (and help yourself)

Small and medium businesses and startups have never needed credible, independent journalism and information more than now.

That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.

Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.

Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.

Trending

COMMENTS

Subscribe
Notify of
guest
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Rohan Baker
Rohan Baker
3 years ago

So Harvey Norman has taken 35 years to build itself up to be the most complained about business in NSW. That’s real something to crow about Mr Harvey.

moriac
moriac
3 years ago

Try emailing them. Last time l looked australias largest computer seller had no email on its website. It’s a corporate thing to employ people to respond but surely that would be better than first contact through fair trading. It just frustrates customers.

tj
tj
3 years ago

Heard Gerry Harvey on talk back radio the other day crying foul over Amazon coming on the market .Wish I knew this at the time ,would have rang up the radio station with a comment

Keith Walters
Keith Walters
3 years ago

That register simply works on absolute numbers; it doesn’t take into account the number of stores a retailer has.
So if a chain has 100 stores averaging one Fair Trading complaint every 2 years that will show up as 50 complaints per year. But an independent retailer with one store could clock up say 5 complaints in a year (ie 10 times the rate per store of the larger chain) but he’s way down the list, even though his performance is 10 times worse.