CUSTOMER COMPLAINTS- Gifts or Hindrances?

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CUSTOMER COMPLAINTS- Gifts or Hindrances?
Presenter Rosemarie Price AIM Breakfast 14
April 2010
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Overview of presentation

• What is a Complaint?
• Why do customers complain?
• How is a complaint a gift?
• Impact of Managements view of complaints
  handling
• Complaints handling in a global environment
• What can be achieved with a Complaint is a gift
  strategy- looking at complaints differently

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What is a Complaint?

• AS ISO 10002 Customer satisfaction Guidelines
  for complaints handling in organizations defines
  a complaint as
• An expression of dissatisfaction made to an
  organization, related to its products (services),
  or the complaints-handling process itself, where
  a response or resolution is explicitly or
  implicitly expected

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Why do customers complain?

• Their expectations have not been met!

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Recent experience

• Activity-1 minute
• Turn to the person sitting next to you and
  discuss a recent experience where you handled a
  complaint, focusing on how you reacted to your
  complaint
• Alternatively, discuss a recent experience where
  you made a complaint, focusing on how the
  business reacted to your complaint

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Recipients normal reaction to complaints

• Ignore complaints
• Defensiveness
• Anger
• Concern re loss of trade, reputation
• Annoyance, time consuming, rectification costs
• Hindrance- wish they would just go away!
• Not believe some or all of what the customer was
  saying
• These reactions are as a result of negative
  attribution blame is being attributed to us or
  our business. A complaint is evidence that, in
  the customers view, we have not met their
  expectations.

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Customers manner

• Lack Gracious Social skills to communicate
• Nervous
• Harsh, one sided
• Emotional
• Lack understanding of commercial/regulatory
  limitations
• Rude
• Unreasonable complainant

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Complaint deterrent techniques

• Apology only, no rectification
• Blame
• Promise but dont deliver
• No response
• Rudeness
• Pass on to another department
• Customer Interrogation

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How could complaints be gifts?

• Underlying Principles
• There are 2 Levels of messages embodied in
  complaints
• The customer has 2 separate needs when
  complaining-needs as individuals and needs
  relating to the complaint
• The benefits of Customer recovery far outweigh
  the cost of losing a customer or attracting
  another customer
• The majority of customers are honest

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1. Two levels of messages in Complaints

• Example 1
• Surface message product is not working as
  expected
• Underlying message I dont understand the new
  technology, I need help
• Example 2
• Surface message- I am disappointed with the
  service during my last visit/purchasing
  experience
• Underlying message I am testing the value of my
  loyalty to your business

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2. Customers needs when they complain

• Needs as individuals
• To be heard
• To be understood
• To be respected
• Needs relating to the complaint
• To have their concern dealt with quickly, fairly
  and properly
• To be given what they have been denied and
  perhaps an apology
• To have action taken to fix a problem or address
  a concern- a resultant process change

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3. Benefits of Customer Recovery

• Only 4 of dissatisfied customers complain. 96
  leave without any communication to business
• Of the 96 who leave, 91 will never return
• A typical dissatisfied customer will tell 8 to 10
  people about the issues with your business-
  significantly more in global communications
• 1 in 5 dissatisfied customers will tell 20 people
  about the issues with your business
• It takes 12 positive service incidents to make up
  for one negative incident

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3. Benefits of Customer Recovery (contd)

• 7 out of 10 complaining customers will do
  business again with you if resolve the complaint
  in their favour
• Of complaining customers, 95 will do business
  with you again if you resolve the complaint at
  the first contact
• On average, a satisfied complainer will tell 5
  people about their problem and how it was solved
• It costs 6 times more to attract new customers
  than it does to retain current ones
• Customer loyalty is worth 10 times the price of a
  single purchase
• How to win and Keep Customers Michael LeBoeuf

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4. The majority of customers are honest

• 1-4 of customers systematically cheat businesses
• If complaining customers are treated with
  suspicion or rudeness, customers will take a
  defensive position

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The Gift

• If a customer is complaining, you are being given
  a chance to retain that customer

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Unwrapping The Gift

• Free direct communication from customer about
  service failures, competitors offerings-no survey
  costs
• Readily available market research-Complaints
  define what customers want
• Opportunity to increase customer trust
• Opportunity to build long term relationships-custo
  mers will re-purchase if they believe complaints
  are welcomed
• Opportunity to rectify service failures
• Opportunity of engaging customers as advocates

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Engaging Customer as your Advocate

• Customers becoming your advocates is based upon
  reciprocity principle humans like to return
  favours
• When businesses handle customer complaints in a
  respectful way and a token of atonement is
  offered beyond their expectation, customers are
  likely to reciprocate with positive advocacy
• Token of atonement can be financial, but can also
  be an apology, acknowledgement of making a
  difference- recognition of their value

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What are the elements of Complaint is a gift
strategy (1)

• Complaints Policy and guidelines based on
  complaint welcoming culture
• Complaints data base to maximize complaints
  capture
• Complaint handling training, including empathy
  and conflict handling training- front line staff
  and induction training
• Target response and resolution times
• Regular complaints reporting

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What are the elements of Complaint is a gift
strategy (2)

• Clearly defined Escalation path for difficult
  complaints
• Specialist Complaints case managers
• Customer Surveys
• Continuous improvement focus
• Unreasonable Complainant conduct management
  guidelines (demands, persistence, lack of
  co-operation, arguments, behavior)
• Complaints Analysis- root cause analysis

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Practical Implementation of Gift Strategy

• Thank customer for contacting you
• Explain why feedback is appreciated
• Apologize for service failure
• Take responsibility and make commitment to
  customer to do all you can to rectify situation
• Collect all information from customer
• Correct or facilitate correction of service
  failure as promptly as possible
• Check customer satisfaction
• Prevent future service failures of this type-root
  cause analysis (5 whys, causal factor tree
  analysis etc)

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Impact of Management view of Complaints Handling

• Customer Charter set by management- includes
  complaints handling
• Focus on complaints welcoming not reduction of
  complaints
• Culture, Complaints Handling guidelines/policy,
  KPIs, reporting, escalation path for complaints
• Management set mandate for staff re customer
  recovery, give confidence/framework
• Mindset of staff is easily sensed by customer

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What can be achieved from a Complaint is a
Gift strategy

• Improved Customer Experience
• Access to valuable source of knowledge- at no
  cost
• Knowledge of most common service failures
• Increased customer trust and loyalty
• Opportunity to partner with customer as advocate
• Opportunity to strengthen service quality
  management
• Increased satisfaction for complaints handling
  staff

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Application of Gift Strategy

• Can be applied to large corporations, individual
  departments, small businesses, monopoly
  businesses, government departments or government
  owned corporations
• Comment re monopoly/ businesses equally
  important focus is on improved customer
  experience, improving complaint handling staff
  experience, achieving best practice, reducing
  external ombudsman costs

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Using Complaint is a gift knowledge as a
Complainant

• Be clear and specific in describing what you are
  complaining about
• Be respectful
• Describe the impact and what you are expecting as
  a resolution
• Make suggestions re improvements
• Give the business a chance to rectify the issue
  and retain your business
• See your complaint as a gift

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Readings/References

• Complaint is a Gift Janelle Barlow and Claus
  Moller 2nd edition, TMI
• How to Win and Keep Customers, Michael LeBoeuf

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SUMMARY

• Complaints are packages with 2 levels of messages
  waiting to be unpackaged
• Complaints are given freely
• Businesses can use the gifts in different ways-
  correction of immediate and systemic issues
  through direct communication of unmet
  expectations
• Complaints give businesses opportunities to
  retain customers business and loyalty

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A question to ponder

• Putting yourself in the customers seat , what is
  your preference
• Would you rather be dealing with a business that
  ignores complaints or with a business that
  welcomes complaints and sees them as a gift a
  powerful source of information ?
• Let your response to this question be the driver
  for your approach in managing complaints for your
  business.

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• Questions