CUSTOMER COMPLAINTSGifts or Hindrances?
Presenter: Rosemarie Price
AIM Breakfast 14 April 2010
Overview of presentation
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What is a Complaint?
Why do customers complain?
How is a complaint a gift?
Impact of Management’s 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?
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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?
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Their expectations have not been met!
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Recent experience
Activity-1 minute
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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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Recipient’s normal reaction to
complaints
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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 customer’s view, we have not met
their expectations.
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Customer’s manner
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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
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Apology only, no rectification
Blame
Promise but don’t deliver
No response
Rudeness
Pass on to another department
Customer Interrogation
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How could complaints be gifts?
Underlying Principles
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There are 2 Levels of messages embodied in complaints
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The customer has 2 separate needs when complainingneeds as individuals and needs relating to the complaint
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The benefits of Customer recovery far outweigh the cost of
losing a customer or attracting another customer
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The majority of customers are honest
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1. Two levels of messages in
Complaints
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Example 1
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Surface message – product is not working as expected
Underlying message – I don’t understand the new
technology, I need help
Example 2
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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. Customer’s needs when they
complain
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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
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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
(cont’d)
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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
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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
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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-customers 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
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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)
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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)
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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 cooperation, arguments, behavior)
Complaints Analysis- root cause analysis
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Practical Implementation of Gift
Strategy
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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
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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
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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
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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
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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
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“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
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Complaints are packages with 2 levels of
messages waiting to be unpackaged
Complaints are given freely
Businesses can use the gifts in different wayscorrection of immediate and systemic issues
through direct communication of unmet
expectations
Complaints give businesses opportunities to retain
customer’s business and loyalty
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A question to ponder
Putting yourself in the customer’s 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
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