Customer Complaints

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CUSTOMER COMPLAINTSGifts or Hindrances? Presenter: Rosemarie Price AIM Breakfast 14 April 2010 Overview of presentation       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 2 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”  3 Why do customers complain?  Their expectations have not been met! 4 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  5 Recipient’s 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 customer’s view, we have not met their expectations. 6 Customer’s manner        Lack Gracious Social skills to communicate Nervous Harsh, one sided Emotional Lack understanding of commercial/regulatory limitations Rude Unreasonable complainant 7 Complaint deterrent techniques        Apology only, no rectification Blame Promise but don’t deliver No response Rudeness Pass on to another department Customer Interrogation 8 How could complaints be gifts? Underlying Principles 1. 2. There are 2 Levels of messages embodied in complaints The customer has 2 separate needs when complainingneeds 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 3. 4. 9 1. Two levels of messages in Complaints    Example 1 Surface message – product is not working as expected Underlying message – I don’t 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 10 2. Customer’s 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  11 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   12 3. Benefits of Customer Recovery (cont’d)       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 13 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 14 The Gift If a customer is complaining, you are being given a chance to retain that customer 15 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-customers will re-purchase if they believe complaints are welcomed Opportunity to rectify service failures Opportunity of engaging customers as advocates 16 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  17 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 18 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 cooperation, arguments, behavior) Complaints Analysis- root cause analysis  19 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) 20 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  21 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  22 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  23 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  24 Readings/References   “Complaint is a Gift” – Janelle Barlow and Claus Moller 2nd edition, TMI “How to Win and Keep Customers”, Michael LeBoeuf 25 SUMMARY    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  26 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. 27 Questions 28