Customer Service

Unit 2: Prepare to deliver excellent customer service

Session 4: Understanding how complaints are handled

What makes customers complain?

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On this page you will look at possible reasons why customers may complain to or about
an organisation. It's important to consider why a customer would or has complained. By
analysing a complaint you can understand why it occurred, whether it was justified and
crucially, how to prevent it happening again. This ensures that an organisation can
attempt to reduce its complaints to a minimum and increase customer satisfaction rates.

Naturally, the main reason a customer may complain is because they are unhappy with
the product or service they received. Before you can start to solve a customer's
problem, it is worth knowing what the most common types of complaint are. Below is a
list of general complaints customers have.

The list can be used as the basis of a customer complaints analysis framework. Tap the
images below to see a supermarket based example.

Typical complaints
Common complaints usually fall into one of the following areas: faulty equipment, too
little information, poor support services, human error or delays in delivery. There could
be more specific problems relating to each sector and type of organisation. For example,
hot fast food chains may receive complaints that their food has been served cold. This
could be categorised under failure to meet customer needs/expectations or human
error.

Effective analysis
Therefore, an organisation that is effective at analysing potential complaints will use
lists and tables and try and think of how possible complaints could occur.

This way, organisations can plan the delivery of a product or service in such a way that
minimises complaints. This will in turn help the organisation gain and maintain a
strong customer base.

Quick quiz
 Complete the table below by dragging and dropping complaints into the correct boxes.
Some of the answers have already been done for you.

Staff are unaware of which foods are vegetarian.

A pair of jeans is bought with a hole in the seam.
Staff are unaware of the correct washing instructions for a particular garment.
There is a split in the paper coffee cup.
Food is served cold.
Customer has been waiting to be served for over 10 minutes.
A young woman has been over-charged for her purchase.
There is not a wide range of sizes available as the supplier has failed to deliver more stock.

General Fast food chain Women's

Complaints/ clothes
Typical store
Complaints

Faulty
equipment

Too little
information

Poor support Store is

services only open
for
browsing
between
9-11am.
No items
can be
purchased
during
these
hours.

Human error

Delays in There are no

delivery French fries
available
because the
delivery of fresh
potatoes has
been delayed.
Did you know?

Complaints in certain sectors shot up in 2011:

Complaints against UK household energy suppliers rose by over a quarter (26%)
between July and September 2011.

Complaints about the UKs big banks increased by 29% from July to December 2011.

Complaints procedures
Dealing with complaints effectively can be a difficult process. That is why often many
organisations have a set complaints handling procedure in place. The procedure is
usually part of staff training and discussed extensively with all employees. That way,
any member of staff should be equipped to deal with any type of complaint and know
the steps to follow to ensure it is dealt with in the best possible way.

Having a set procedure can also help an organisation standardise the way it deals with
its customers and that every customer is given a high level of customer service when
they report a complaint.

Steps in a standard complaints procedure example

1. Listen
The first stage of solving any complaint is to listen to the customer you have to listen to
what the complainer has to say. If there is a factual basis to the complaint then get the facts
by asking questions such as: who, what, where, why, when, how. If there's no factual basis,
then try to determine why the customer feels that way. Listening carefully will make sure the
customer knows you are taking the complaint seriously and may start to defuse the
complaint at the earliest opportunity.

2. Take responsibility
If it's a problem you've caused (or your department has caused), then take responsibility for
the problem. Even if there's the slightest chance that your department has caused the
problem, you still need to take at least partial responsibility. Many times the customer will be
much happier just having someone acknowledge that the problem exists, even if there's
nothing you can do about it.
 3. Acknowledge
Acknowledge the customer's feelings. Say something like "I'm sorry you feel that way" or
"I'm sorry you're having difficulties" even if your department didn't cause the problem.
Showing empathy will help convince the customer can you work together to solve the
problem.

4. Offer a solution
Some problems have immediate solutions - or a compromise. If a solution or
compromise is possible, then offer it.

If a solution is possible in the future, then tell the customer. But be careful not to
build false hopes or commit to something that cant be delivered though.

5. Deal with potential disappointment

Many times a customer will be unhappy with news of a future solution. After all, the customer
has the problem now and wants it solved immediately. Let the customer know if there's
something that he/she can do to influence the priority of the solution. Would a letter or email
to the right person help? Could the solution be implemented sooner if other tasks were
delayed? Help a disappointed customer deal with the priority issues.

6. Follow up the complaint

When a solution is implemented, let the customer know. If the solution is being prioritised (or
is not a priority), let the customer know as well. Keeping the customer informed will go a long
way to reducing their disappointment and potentially retaining their future custom.

Summary
The procedure above is a generic framework that can be transferred to many types
of organisations. However, each organisation may have its own way of dealing with
complaints. For instance, laws that solicitors firms have to adhere to may be different
to those that a supermarket does. However, although each business will deal with
complaints with their own way, the principles will always be very similar.

Stopping complaints from escalating

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Sometimes complaints are unavoidable. Therefore, once a complaint is received it is

important to try and defuse it as quickly as possible. Clear and polite communication
with the customer is a good way to do this. It is vital to keep the customer fully informed
throughout the complaints process. Doing this can go a long way to stop the problem
escalating.

Conversely, if customer service personnel are unclear, impolite and lacking confidence,
situations may worsen. Many industries, organisations and professions have ethical
standards or codes of practice that affect the way products or services are delivered to
customers.

How the complaint is dealt with can also stop any unnecessary escalation of the
problem. The main methods of communication are face-to-face, written and via the
telephone. Read on below to learn more about each one!

There are three main ways that complaints can be defused prior to them getting
worse. Tap the headings below to read about them.

Face-to-face
When dealing with complaints face-to-face, it is important to communicate clearly,
show the customer that you understand their problem and empathise with their
situation. The situation may calm down if you are willing to show that you will do your
best to find an effective solution as quickly as possible.

A good way of doing this is to adopt a sympathetic tone when speaking and
ask open questions. Open questions are useful because they show the customer
that you have time to listen to their concerns and are interested in what they have to
say. Having as much dialogue as possible may also help keep the customer at ease
and go some way to stop the problem from getting any worse.

Face-to-face should always be the preferred way of dealing with a complaint as it is

the most personal, is the quickest way of resolving issues and the simplest method
of making the customer feel like their view is important.

Written
Sometimes when a customer has sent a written complaint or correspondence has
only been possible in writing, written forms of communication are used.
The tone of written communication, such as letters or emails, should always
be formal but sympathetic. Its a good idea to make an extra effort to apologise for
any inconvenience or acknowledging the difficulty the customer has had.

Because written communication is not instantaneous, it is a good idea to use closed

questions which seek specific responses from customers.

Written communication can help stop escalation as it gives the customer a proper,
written acknowledgment of the problem.

Telephone
Sometimes, complaints are handled via the telephone. This could occur if the
customer has called specifically with a complaint or if an organisation is following up
a complaint made by a customer.

If you are dealing with customers via telephone, both parties are deprived of a lot
of non-verbal information. Here there is great reliance upon having a friendly,
calm and confident tone of voice.There may also be actions that you undertake
that are invisible to the customer. For this reason, you should always explain what
you are doing.

So, rather than saying, I will put you on hold, you could say, I am going to put you
on hold for a minute so that I can speak to our technical department and find out the
soonest date that someone can see you. The latter case is far more reassuring.

Probing questions are often asked via the telephone. These are questions aimed at
getting more information from the customer whilst maintaining some level
of sympathy towards their problem. They can be useful in helping the customer
resolve their problems or complaints, as they will usually not end the call
until significant progress has been made to solving the issue even if this involves
speaking to several members of staff.

Training
Training staff in complaints handling will give them confidence to tackle the difficult
customers and support in their actions. It will also enable them to communicate in a
clear and polite manner as discussed above.

Giving the complaint authority

Giving the complaint the necessary authority and priority is important too. Ensuring
that the complaint is a priority and not lost will help it be resolved quicker and
identifying what authority level is needed to solve the issue can also defuse the
 situation. For instance, if a customer wants a refund and only a manager can grant one,
staff should know to contact the manager as soon as a refund is requested.

Did you know?

86% of consumers quit doing business with a company because of a bad customer
experience, up from 59% 4 years ago.
(Source: Harris Interactive, Customer Experience Impact Report, http://www.customer1.com/blog/customer-service-
statistics)

For every customer complaint, there are 26 other customers who have remained silent.
Source: Lee Resource Inc, http://www.customer1.com/blog/customer-service-statistics

The effects of complaints

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Complaints can have a profound effect on an organisation. If not dealt with correctly
they can cause the loss of customers. Some of the common results of too many
complaints are: poor customer retention and loyalty, bad publicity, a fall in profits, and
high training costs.

However, complaints are not always negative as long as they are dealt with effectively
they can be used to shape positive change. Complaints raise awareness of issues and
therefore they can be used to:

Stop common faults, such as long queuing times from occurring

Improve internal complaints procedures
Get unbiased feedback about your organisation.
Now we have a general understanding of the effects of complaints, lets look in more
detail at the effects they have on different sectors!

Commercial sector
Customer retention and a large base of loyal customers are vital to a successful
commercial organisation.

As a customer is paying money and often has many alternatives or competitors to

choose from, it is vital complaints are used to keep customers and improve services.
Otherwise there could be a large fall in profits, which could have very bad consequences
for the long-term future of an organisation in the commercial sector.

Public sector

Within the public sector, it is important that the effects of complaints do not attract too
much bad publicity.

This is because public sector organisations, such as the NHS, are government funded
and therefore face greater media scrutiny.

Complaints could be damaging to staff morale or lead to government cuts which in turn,
could lead to redundancies or a decrease in the quality of service that can be offered in
the future.

Third sector
Customer retention and a large base of loyal customers are vital to a successful third
sector organisation, as well as a commercial one.

Like the public sector, bad publicity would have a big effect on the third sector as bodies
such as charities, usually rely on a strong public image to encourage customers to
donate. However, high training costs also need to be avoided.

As third sector organisations do not usually benefit from large profits like some
commercial businesses, too many complaints may lead to many staff being made
redundant or having to be retrained. As third sector bodies rely on a strong level of
service as many of their products are of optional need to customers, such as charity
clothes shops, they need to reduce complaints to a minimum. Furthermore, as financial
budgets will not be as high as some commercial organisations, retraining costs would
ideally be avoided.

Therefore, the effects of complaints need to continually improve customer service,

which should reduce some costs and increase the number of customers.

Case study
Read the case studies below to see some real-life examples of complaints in the three
different sectors.

Commercial sector
Complaints have been used to shape changes in the commercial sector. A good
example of this is through the use of social media and the internet. Mediums such as
Twitter and Facebook have become a quicker and easier way for customers to
interact with large businesses and register complaints.

These mediums have made complaining more accessible to people. It does not
always have to involve a long phone call or posting a letter and waiting for a
response. Many large commercial organisations now have their own social media
pages to communicate with customers. They also usually dedicate a part of their
website to dealing with complaints. The results are that complaints are handled
quickly.
 Through use of social media, complaints in the commercial sector are taken more
seriously, which should help to improve the standards of products and services.

Public sector
Complaints in the public sector can lead to widespread improvements, especially if
they highlight weaknesses or areas that can be approved. A good example of this in
the public sector is the Health Service Ombudsman. It investigates complaints about
the National Health Service (NHS) in England.

When an investigation into a complaint has been completed, the ombudsman writes
a report and sends it to the NHS provider that has been complained about. The
customer also receives a copy. If the ombudsman has found the complaint to be
justified, the ombudsman will recommend improvements.

Third sector
The effects of complaints can also be positive in the third sector too. Again,
complaints can highlight potentially weak areas of a business and where it can be
improved.

A good example of this in the third sector is with Oxfam and their involvement with
the new shwopping scheme. The charity had complaints that its stores were not
accessible enough so customers were put off from donating old clothes.

Now with the new scheme, unwanted clothes can be donated to Marks and Spencer
stores too immediately giving customers more choice of stores in which to donate
their clothes.

Again, this shows that complaints do not always have negative effects. A lot of
customer feedback is constructive and is something for an organisation to work on.
The standard of service naturally increases and complaints will decrease.

Complaints can be used to shape positive change in an

organisation.
Monitoring complaints
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When monitoring complaints, staff need to gather and interpret information from the
customer about problems they have raised.

At times, a customer will bring problems directly to your attention. They will actively
complain or air their concerns and they may do this face to face, by telephone or in
writing. Alternatively, you may receive information about a problem from a colleague or
organisational process, or even from third parties.

Many organisations refer to this information as feedback, and this may be positive or
negative. The challenge for each individual and organisation is to learn from the
feedback they receive and improve the level of customer service that is provided.

Written records can help complaints analysis

Complaints analysis
If feedback and information is systematically recorded, then it also becomes possible to
analyse it, with a view to identifying themes and trends. One customer service
professional may think a problem is a one-off or only an occasional difficulty. However,
if many staff are encountering the same problem then it may be something that the
organisation needs to address.

By keeping a written record of problems, the organisation is better placed to detect

trends and themes. Many organisations have customer service computer systems, which
enhance the process of recording and analysing information.
 Why are complaints monitored?

Monitoring complaints is a good way of trying to improve as an organisation. Complaints can

help shape new ideas, products or promotions.

Effective monitoring of complaints can be used to solve recurring

complaints.

It can show customers you take complaints seriously and are intent on
improving.

Monitoring complaints and ensuring they do not get lost in the system
can stop them escalating.

Monitoring can be used for training and improvement

purposes
 How monitoring is used
Complaints are often compiled into statistics and then used in marketing. For instance,
some businesses advertise that they had 1000 complaints less in 2011 than their nearest
competitor.
Statistical data can also be used to break down complaints into different groups. For
example, if a food chain monitored its complaints effectively, they could pinpoint how
many complaints they had for waiting times, how many for service and how many for
quality of food. Then they could see a pattern and rectify it.
Monitoring is also used to set up a better complaints process or procedures. For instance,
some customers may have even complained about the complaints procedure itself if it
took too long etc.
Monitoring could be used to shape internal processes or staff training.
A lot of larger organisations (such as banks) even have their own complaints specialist
teams, where complaints are monitored extensively by staff via telephone, face to face or
written methods.
In summary
In this Session you have learned about how complaints are handled. You should
now be able to:

Explain why customers may complain to or about an organisation

Outline the complaints handling procedure in the organisation
Identify ways in which complaints may be defused prior to escalation to include
face to face, written (letter, email) and via the telephone
Outline the effects of complaints on commercial, public sector and third sector
organisations
Explain why complaints are monitored and how the monitoring is used.
Understanding how complaints are handled
Back to Session
Take a look at the following learning points to see a summary of what youve covered in
this Session:

What makes customers complain?

Typical complaints
- Faulty equipment
- Too little information
- Poor support service
- Human error
- Delays in delivery
Complaints procedures
Standard complaints procedure
- Listen
- Take responsibility
- Acknowledge
- Offer a solution
- Deal with potential disappointment
- Follow up complaint
 Stopping complaints from escalating
- Face to face
- Written
- Telephone
- Training
- Giving the complaint authority

Impact of complaints
Effects of complaints
- Commercial sector
- Public sector
- Third sector
Monitoring complaints
- Complaints analysis
Why complaints are monitored
- Improve organisation
- Solve recurring complaints
- Intent to improve
- Ensures they dont get lost
Quick quiz
Back to Session
It's time to put that learning into practice!

Question 1
Which of the following is not a typical customer service problem?

Faulty equipment

Delays in delivery

The customer seeing a better produce elsewhere after purchase

Correct. Well done!

Question 2
Is the following statement True or False?

Having a set procedure can also help an organisation standardise the way it deals with
its customers.

True
 Fasle
Correct. Well done!

Question 3
Which answer shows two advisable ways you can potentially stop a complaint
escalating?

To train your staff in complaints but encourage them to prioritise happy customers

over those making a complaint

To train your management in complaints and encourage all staff to forward

complaints to them immediately

To train your staff and management in complaints and to give the complaint the

relevant authority and priority levels

Correct. Well done!

Question 4
Select one option to complete the following sentence:

Customer retention and a large base of loyal customers are vital to a successful
organisation in the __________________ sector.

Public

Third

Commercial
Correct. Well done!

Question 5
Is the following statement True or False?

Monitoring complaints could be used to shape internal processes or staff training.

True
 False
The correct answer is: True