In a business context, conflict resolution is a process aimed at finding a peaceful solution to disputes involving two or more parties, such as between teams, coworkers, clients, or customers.

All businesses deal with conflict — it’s near-impossible to run an organisation without it. Ask any customer service representative, and they’ll tell you that customer conflict is a regular part of their daily workflow. It all comes down to how you handle conflict resolution.

Conflict in customer service is commonplace and to be expected. The goal isn’t to avoid conflict at all costs but instead to resolve the conflict as quickly and professionally as possible.

Conflict can be beneficial if you know how to tackle it. It can strengthen customer relationships, build trust, foster loyalty, and improve customer retention.

Let’s explore why customer conflict arises, all the nuances you need to consider, and strategies for resolving disputes when they do arise. Let’s start by examining why conflict resolution is so important in customer service.

83% of customers claim they feel more loyal to brands that respond to and resolve their complaints. In addition, 65% of consumers say they have switched brands after one bad experience.

These two statistics tell you all you need to know: Conflict resolution matters. The better you handle concerns, the easier it is to retain customers. This has the potential to drastically improve your customer lifecycle value (CLV).

To elaborate, here are four reasons conflict resolution matters for your business.

• Retention: If you resolve arguments well, you cultivate positive customer experiences. This supports customer satisfaction and builds customer trust, leading to higher retention rates.
• Reputation: Successful conflict resolution strategies across all digital channels boost your reputation. This means customers know exactly what to expect when dealing with your brand.
• Conversions: Alleviating customer doubts and concerns also benefits the top of the sales funnel. The more efficiently you can guide customers through each touchpoint, the easier it is to convert.
• Competitiveness: Ultimately, a well-planned, consistent conflict resolution process makes your brand stand out, giving you the edge over the competition.

To quote Ruby Newell-Legner on conflict management: “It takes 12 positive customer experiences to make up for one negative experience.” Conflict resolution strategies aren’t just a ‘nice to have’ but can be an integral part of your organisation’s success.

In the broadest sense, customer service conflict always occurs when a brand fails to align itself with a customer’s expectations, beliefs, or values. Common causes include:

• Unmet expectations: The simplest and most common reason for conflict occurs when a business doesn’t meet customer expectations. This can result in dissatisfaction, disappointment, and even anger.
• Miscommunications: Unclear instructions, language barriers, and unresolved technical problems can create confusion and misunderstandings.
• Delays: When a customer needs to wait longer than expected for a product, this can test their patience, increasing the likelihood of conflict.
• Personal stress: Sometimes, customers may spark conflict due to stress. This could be a high-stress situation in their own lives or because they feel disrespected or ignored by an employee.

These types of conflict can manifest as verbal outbursts, written complaints, negative reviews, or social media backlash. Every customer is different, with their own traits, beliefs, and concerns. No two situations are the same.

For example, let’s say a business has opened a new office in Strathfield, a Sydney suburb with a large South Korean population. The business needs a Korean customer to sign a document but has run out of blue or black ink, so they ask the customer to sign with red ink. In South Korea, this can be deeply offensive, creating a conflict situation that arises from failing to consider the cultural context.

That means businesses have to think on their feet and take a case-by-case approach to understanding conflict. It’s necessary to understand not just the ‘what’ but the deeper ‘why’ behind the frustration to successfully resolve the conflict.

For that, the best place to start is to get into the heads of your customers and understand the social psychology behind their complaints.

Understanding the psychology behind a conflict is essential for effective resolution. This is grounded in the idea that, often, the issue at hand is only half the irritation for a customer. There are underlying emotional and cognitive factors at play, too.

1. Emotions

Strong emotions like anger, frustration, or disappointment can escalate conflicts. Customers may feel these emotions when a company falls short of their expectations. Within a conflict, these emotions are almost a separate issue from the inciting incident. You need to address both the root cause and these emotions as part of the resolution.

2. Personality traits

Individual differences naturally influence how people handle conflict. Some people are assertive, while others are inherently passive in their conflict styles. Recognising and understanding these traits can help you tailor your approach to resolution.

3. Cognitive biases

People bring baggage with them into any conflict. Perceptions and biases will affect their interpretation of any given situation. For example, a customer might assume a mistake from a sales rep was intentional due to past negative experiences. A colleague may assume things about you based on race, gender, or age. An awareness of these biases and perceptions is also helpful as you look to forge a path toward resolution.

Acknowledging these psychological elements can help customer service reps address more than just the surface issue. Appealing to the emotional needs of customers leads to more effective conflict resolution.

Cultural nuances in conflict resolution

We humans are a diverse bunch. The way we approach conflict and conflict dispute resolution can vary wildly based on cultural differences. These variations can sometimes be a source of friction as conflicts arise due to misunderstandings.

In some cultures, direct, plainspoken communication is valued and encouraged. In others, direct language may be more taboo. Indirect or high-context communication may be the norm in the workplace setting. It’s not rocket science to see that misunderstandings can occur when these styles clash.

Also, attitudes toward authority, time sensitivity, and conflict itself vary across cultures too. Some cultures can prioritise harmony over individual needs. This mindset affects how the leadership team approaches the whole concept of handling disputes.

Understanding and respecting these cultural nuances helps businesses navigate conflicts when culture may be a factor, especially in an international business environment like the diverse Australian multicultural market.

Cultural sensitivity can go a long way toward better relationships in this context.

Of course, each situation needs to be considered on its own merits. That being said, there are some proven methods and guiding principles that you can use to maintain positive customer relationships through restorative practice.

1. Active listening skills

Being an active listener means paying full attention to a customer, listening and acknowledging their concerns without interrupting.

Example: A customer at a retail store expresses frustration over a faulty product. The staff listens attentively. They paraphrase the issue back to the customer to ensure understanding. The staff acknowledges both the issue and the frustration before offering a solution.

2. Empathy and emotional awareness

Show genuine concern and understanding toward the customer.

Example: An airline customer service agent empathises with a passenger who missed a flight due to miscommunication. The issue here goes beyond the missed flight; the passenger is angry about the error. The agent doesn’t try to rationalise or explain away the anger. Instead, they show empathy and offer help to rebook, preventing additional stress.

3. Clear communication

Use straightforward language to avoid misunderstandings.

Example: A tech support representative provides simple step-by-step instructions, ensuring the customer can follow along.

4. Finding common ground

Identify shared goals to show that you can work together toward a solution - a win-win.

Example: Both the customer and service provider agree that they want to resolve the issue quickly. This acknowledgment alone is valuable; it shows you’re both on the same page. This foundation for the conversation facilitates cooperation.

5. Problem-solving approach

Focus on finding solutions rather than assigning blame. However, don’t go straight to a solution without acknowledging the customer’s needs and emotions.

Example: Instead of blaming limitations in company policy that may be roadblocks to helping, focus on ways you can improve the situation and find alternative ways to meet the customer’s needs.

6. Follow-up

Check back in with the customer later to ensure you’ve fully resolved the issue.

Example: A utility company follows up with a customer after fixing a service outage. They just want to confirm everything is working properly, reassuring the customer that the company cares about the service it provides.

Of course, even with the best conflict resolution strategies, there are always likely to be challenges, and the very nature of conflict means that it's not easy to apply one-size-fits-all solutions.

But you can be proactive in thinking about ways to counteract conflict.

1. Train your employees

Your staff may be naturally empathetic, kind people, but this team dynamic alone isn’t enough. Equip your team with conflict management skills through inhouse conflict resolution training programs and short courses.

Businesses can use platforms like Salesforce Trailhead to provide employees with interactive learning experiences on customer service best practices.

2. Make the most out of technology

Use the technology available to you to deliver better customer support. To optimise managing conflicts, you can implement customer relationship management (CRM) systems with AI-powered tools.

Salesforce Service Cloud is one example of these tools. With it, you can access customer histories and customer data, enabling personalised and efficient conflict resolutions with the help of AI.

With Salesforce, you can effortlessly deliver a more responsive customer service experience.

3. Create clear conflict resolution policies

Develop clear guidelines for handling conflicts to ensure consistency and make sure these are accessible to your customer support team.

Any company handbook worth its salt should outline the specific steps and strategies to deal with different types of conflict.

This provides your team with a supportive framework to back up their conflict resolution skills. They can follow clear policies instead of feeling like they are exposed to customer frustrations.

Here are a few examples of companies showcasing how to handle difficult conversations. You’ll see empathy, solutions, and proactive attempts to put things right as part of a resolution process.

1. Qantas

Cancelled flights are a common occurrence with airlines. And when customers have their flights cancelled, they’ll often vent some of that frustration at the airport over social media. Here’s an example:

Here, the team at Qantas has taken the time to respond to a customer complaint.

In the message, they do several things to kickstart the process toward dispute resolution:

• They don’t assign blame or offer an excuse (the customer isn’t really interested in why the flights were cancelled).
• There is an implication of a solution: “We’d like to look into this for you”. This sets the common goal that something should be done.
• The team at Qantas invites further private conversation. This shows that the team values the customer’s privacy and cares personally about finding a resolution.
• There are further reassurances of the company’s legitimacy, with references to social media best practices.

This kind of engagement and conflict resolution via social media is common for many brands nowadays. It gives the company a visible opportunity to address an issue and show a willingness to fix issues that arise in real-time.

Not only will the implied conflict resolution potentially repair the healthy relationship with this customer, but the company’s transparent engagement also indicates to other customers that Qantas is a company you can trust. They’ll deal with issues honourably if things go wrong.

2. National Australia Bank (NAB)

NAB implements an AI chatbot on its website to handle common customer inquiries. This is an increasingly common feature you’ll see across many businesses.

The chatbot efficiently resolves conflicts based on simple issues, reducing wait times and allowing human agents to focus on more complex conflicts.

The key aspect is this. Customers will get frustrated if they feel they can’t resolve an issue via the chatbot. It’s important, still, that customer service teams don’t completely outsource conflict resolution to AI. Customers crave that human connection and respond better to a company that demonstrates its human side.

If the AI agent cannot resolve an issue, a human should be present to take over, show genuine empathy, and work on finding a human solution to a human issue.

When done well, this blend of technology and personal service enhances overall customer satisfaction.

3. Woolworths

Here’s an example of proactive conflict resolution that all companies can implement: effective communication through an extensive FAQ page.

By anticipating common questions and concerns, Woolworths addresses potential issues before they escalate into conflicts. The FAQ page covers a wide range of topics, including delivery options, payment methods, product availability, and returns policies.

When done well, this proactive approach empowers customers to find immediate answers without the need to contact customer service, reducing frustration and wait times.

Effective conflict resolution is vital for businesses. We know that conflicts are part and parcel of customer relationships; what matters is how you react to them to reach an agreement.

Resolving conflicts well helps build trust and retain customers, reinforcing your positive reputation as an authentic, empathetic brand.

By understanding the different factors involved, both psychological and cultural, and employing strategic resolution methods, businesses can turn conflicts into opportunities to strengthen relationships.

There are tools available that can empower your customer service team. Discover how Salesforce Service Cloud can provide tools and insights to deliver exceptional customer service.