So, N-Power has been fined £2million for not handling its complaints properly.

The energy regulator Ofgem said Npower had not recorded complaints properly or given dissatisfied complainers details of the Energy Ombudsman’s redress service.

But, with news of the company’s fine all over today’s news, the damage to N-Power’s reputation now goes way beyond the customers who were unhappy enough to complain. All other previously satisfied customers will be scrutinising their bills looking for errors and any energy customers considering switching will run a mile from N-Power even though Ofgem says it has now remedied all of the breaches of the regulations for which it was fined.

A spokesman for NPower said: “We are very sorry, we let our high standards slip on this occasion.”

“A small number of processes were not correctly adhered to. We have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first.”

Which is the corporate equivalent of bolting the stable door after the horse has bolted.

What can SMEs learn from all this? Well, handling complaints can not only be an expensive process in terms of any compensation or refunds, but it can also cost you far more in staff time and operational efficiency. And even when the complaint is resolved, you and your customers still come out of it with a sour taste in your mouths.

Here at 08Direct.co.uk believe that prevention is better than the cure. Give your customers what they pay for and great service experience on top and your complaint levels will be minimal.

But being realistic, you can’t please all of the people, all of the time, so you’ll never eradicate complaints completely. In these cases, listen to the customer, assess whether they have a case and whether you want to retain them as a customer. If so, you need to work out the best way to make them happy again…quickly!

It also helps if you make it easy to for them to air their views to you (an 0800 number is a great way to do this as it shows you care enough about your customers to pay for the call). And always handle it quickly. if you take your time and drag it out then all that happens is customers get more and more frustrated and tell lots of people how terrible your business is!

If you don’t wish to retain them, you still need to look for a way to satisfy them in order to minimise this potential negative word of mouth. Don’t brush them off and tell them to take a running jump because you’re not bothered. All you’ll do is galvanise their dislike of your business and, as we talked about in our blog last week, there are plenty of very public outlets for them to vent their frustrations.

The fact is that providing great service to a customer that perceives they have been experiencing poor service has a catapult effect – they feel far more positive as a result and may even become advocates for your business.

There are lots of examples of this but my own personal favourite was a well known restaurant chain where I took my wife and kids. Their service was dreadful and our food took so long (over 90minutes for dough balls?!?!) that by the time it arrived, the kids were asleep. And the food was then largely inedible because it was so overcooked. Needless to say I called the manager over and, even though I was gunning for an argument, I politely explained that we’d had a pretty poor time. He completely took the wind total out of my sails when, before I had even finished telling him my concerns, he said, “I’m really sorry – your meal is on us. Please do come back another time and let us try again”. I had actually thought we’d get fobbed off with some free drinks or desserts but didn’t think the entire bill would be written off. Well done Frankie & Bennys – that’s the way to handle a complaint, because not only have I told all of my friends and family how well they handled it, but now I’ve told you too.