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

1
 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

2
 Why do customers complain?

Their expectations have not been met!

3
 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.

4
 Customers manner

Lack Gracious Social skills to communicate

Nervous
Harsh, one sided
Emotional
Lack understanding of commercial/regulatory
limitations
Rude
Unreasonable complainant

5
 Complaint deterrent techniques

Apology only, no rectification

Blame
Promise but dont deliver
No response
Rudeness
Pass on to another department
Customer Interrogation

6
 How could complaints be gifts?

Underlying Principles
1. There are 2 Levels of messages embodied in complaints

2. The customer has 2 separate needs when complaining-

needs as individuals and needs relating to the complaint

3. The benefits of Customer recovery far outweigh the cost of

losing a customer or attracting another customer

4. The majority of customers are honest

7
 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

8
 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

9
 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

10
 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

11
 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

12
 The Gift

If a customer is complaining, you are

being given a chance to retain that
customer

13
 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

14
 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

15
 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

16
 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

17
 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)

18
 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

19
 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

20
 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

21
 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

22