COMPLAINT AS A GIFTwww.humanikaconsulting.com

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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

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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”

• Complaints are golden opportunities. (Cheng, 2000) Strategic Customer Management

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Complaint cases

• Traffic delay

• Air-conditioning problem in a hotel

• Poor meal quality and service

• Unsatisfactory hygiene environment

• Impolite salesman

Context: Hotel, restaurant, coach, shop

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Why do customers complain?

Their expectations have not been met!

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Why is it necessary to understand your customers and their needs?

• 68% of customers will leave because of a bad service experience

• It costs five times more to acquire a new customer than to keep an existing one

• To bring in more or keep customers

• Know which area to improve and how

Examples: Sundays, Wing On Travel....

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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.

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Customer’s 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 don’t deliver• No response• Rudeness• Pass on to another department• Customer Interrogation

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How could complaints be gifts?

Underlying Principles1. 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

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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

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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

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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 (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

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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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5 Principles of Complaint Handling: T.R.U.S.T.

• T: Trustworthy• taking responsibility and ownership in rendering reliable services at a high

professional and ethical standard.

• R: Respect• to make the customers feel that they are important, being valued to the

organization

• U: Understanding• to be able to see things from the customer’s point of views and awareness of

the customer’s feelings

• S: Sensitivity• awareness of the customer’s needs as well as verbal and non-verbal clues in

order to maintain an assertive communication

• T: Timeliness• to act promptly without delay and follow through the complaint to customer’s

satisfaction

Complaint is actually a good thing!

7A’s Model for Complaint Handling

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Complaint Handling Steps: Emotion First

Skills ExplanationAcceptance

Apology

Empathy

- Use a positive tone to show your competence and commitmentto offer assistance

- Do NOT take complaint personally; think positive (“complaint isactually a good thing”)

- Use customer’s name throughout the complaint handling process

- The act of apology is to show respect rather than (≠) to admitthat we are wrong

- Sincere apology for the “inconvenience” caused to the customer

- Empathize with the customer’s feeling

- Show understanding and willingness to offer assistance

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Complaint Handling Steps: Problem solving second

Skills Explanation

Analysis

Alternative solution

Agreement

- Always handle one complain issue at a time

- Avoid bias and unnecessary assumptions

- Listen without interruption

- Ask questions to gather information and to clarify

understanding

- Suggest feasible solutions – not false hope – within your

authority

- Think of another alternative if it is not acceptable to the

customer

- Confirm the solution is acceptable

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Complaint Handling Steps: Positive ending

Skills Explanation

Assurance - Show our genuine concern and sincerity

- Express willingness to help in future

- Thanks for the customer’s complaints / business

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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-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

• 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

Effective Customer Service Steps

1. Know your product: study and learn as much as you can about your products

2. Reach out: greet each customer who appears to need help, respond politely, enthusiastically, and knowledgeably to questions and needs. Complete the interaction by inviting the customer to return and let you know how s/he liked the product.

3. Be alert: Learn to read facial expressions and body language in order to sense when the customer needs help.

4. Get help fast: if you don't have an answer- know how to quickly get help from the experienced people in your market who do have the knowledge.

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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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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 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.

Learning and Giving for Better Indonesia