32 Qualityworld

keepcomplaining

part 2

When it comes to

complaints management,

a coding system can set

you apart from

the competition.

In his second

article, TTeedd MMaarrrraa

explains how a coding

system will facilitate

effective analysis for

improvement and make

the mundane business of

complaints part of the

marketing strategy

feature

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33Qualityworld

feature

The codes and their structure are the key.They represent an effective and efficientway of capturing in the system the reasons,problems, probable causes or other infor-mation which an organisation needs toknow if it is to set priorities and takeaction for improvement.

Often organisations have just a few largebuckets for problems to fall into, like prod-uct or service, for example. The conse-quence? Management sees that itsorganisation had 600 service complaintslast month. That’s a large number, they say.What do we need to do? No one knowsthe details. Valuable resources and timethen have to be committed to find outwhat is happening or has happened. Do itright the first time - put an effective cod-ing system in place at the start.

Effective codes will possess a number ofkey characteristics. They should be: • mutually exclusive so as to avoid ambi-

guity• actionable so that they begin to point

you in the direction of improvement• dynamic in that they are regularly

reviewed and updated• comprehensive and therefore cover all

aspects of the customer’s experiencewith your organisation

There’s a hole in my bucket

Unfortunately, many organisations stillutilise large buckets only. That is, they cap-ture only whether it is a sales, service orproduct issue, for example. So in a givenmonth, if there are 600 service complaints,everyone can review the data and say: ‘Weseem to have a lot of service complaintsthis month!’ No one quite knows whatthey are or why they have occurred, onlythat there are lots of them. This is not par-ticularly helpful.

Figure 1 gives an example of best-in-classcodes for service repairs for ThomsonConsumer Electronics, a consumer elec-tronics manufacturer. As shown, going to asecond level of specificity is helpful, but ifthe cost of repairs begins to grow, you stilldon’t know what to address, so you reallyneed to go to the third level of detail.That’s when your coding system becomesactionable and helps speed you towardsimprovement actions rather than have tospend an inordinate amount of time andresources trying to figure out what the 600service complaints are all about.

The coding system should be comprehen-sive in that it considers every aspect ofwhere things can go wrong within the

Establishing a coding system isone way of setting yourself apartfrom other organisations. XeroxCanada has been successful foryears in negotiating resolution

times on a case-by-case basis with cus-tomers - no doubt a frightening prospectfor some organisations to contemplate.

Many organisations use regulatory require-ments as an excuse not to be better, where-as others strive to be the best. Royal Bankof Scotland, for example, has as one of itsobjectives to be ‘world class in servicerecovery’. It is clearly looking to differen-tiate its level of responsiveness and effec-tiveness in the complaints arena. This is asmart move, as you will see.

If the true value of a complaints manage-ment system were assessed internally itwould have to be based upon the qualityof information it can provide to the variousparts of the organisation - product devel-opment, service, sales, quality and manymore. With the right information, organi-sations can drive process, product and ser-vice improvement. The key is capturing theright information during the interactionwith the customer and coding it in such away that it facilitates analysis, interpreta-tion and reporting of information.

Not fixed right first time

Repeated repair - same problem

Repeated repairs - different problem

Authorised service not performed

Inability to repair

Rudeness/interpersonal skills

Attitude

Intimidating location

Dirty

Parts

Labour

Parts/labour

No estimate given

Repairs significantly exceed estimate

No published repair rates

Cost of repairs

Quality of service

Non-responsive servicer

Difficulty in obtaining/scheduling service

Servicer refuses service

Equipment not ready when promised

Servicer workload - customer told to

come back laterFigure 1. Coding scheme for repair service complaints

Quality of service

(Technical capability/competence)

Professionalism

Facilities

Cost of repairs

Delay in servicing

Other

Repair service

Repair at unauthorised location

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34 Qualityworld

context of the customer experience and allthe individual engagements the customercan have with your organisation. Figure 2is a chart for a telecommunications organi-sation. What does the engagement maplook like for your organisation and whereare the problem areas?

Getting validation

Validation is where the true test of theeffectiveness of the organisation’s com-plaints management process is determined.A validation process allows us to return tothe customer after the case has been closedto determine how satisfied they were withthe actions taken, whether the relationshiphas been preserved and to gain helpfulinformation for improvement regarding theprocess and people the customer encoun-tered in getting the issues addressed.

The key issue here is: ‘When is a case offi-cially closed?’ This has been found to varyfrom organisation to organisation. Best-in-class organisations tend not to close a caseuntil final action has been taken. Theremay be exceptions, but not many. The rea-son why this issue is significant is this finalaction should be the trigger for sendingout a validation survey.

The first question on this survey is simply:‘How satisfied (on a 1-5 scale, for example)were you with the actions taken?’ If noactions have yet been taken, then you mayreceive an unwelcome response from thecustomer, which could lead to reopeningthe case.

Beyond that, it is always a good idea toinclude feedback on satisfaction with peo-ple issues (eg professionalism, empathy,

responsiveness or others) and process (easeof getting the issue addressed, clarity ofresponse and so on) as these often lead toidentifying opportunities to improve theprocess, areas where staff may need bettertraining or where they should be recog-nised for their efforts.

The final question should relate to whetheror not the customer would still continue torecommend your organisation to friends orcolleagues despite the issue encountered.This is the surrogate loyalty question andthe answer will indicate whether the rela-tionship has been preserved or damaged.

A complaints checklist

So before you embark on a complaintsmanagement programme, there are a num-ber of questions you need to consider.

How comprehensive and effective is yourcomplaint coding system? • do you capture actionable data? • are the codes mutually exclusive to

avoid confusion and better ensure con-sistency of application?

• are the codes revised on a regularbasis?

Process effectivenessmeasures

• Pareto analysis

• Review and interpretation

• Severity assessment

• Operations/line management

• Departmental/functional

• Senior management/staff

• Prioritisation

• Resource allocation

• Form problem-solving/

process improvement teams

feature

Customer

purchase

consideration

Purchase cycle

Sales process

System design

Delivery Installation

Training

First invoice

Ordersubmission

Creditreview

Account maintenance

Repair service/maintenance

Technical support

Customer

purchase

decision

Customer

purchase

consideration

Figure 2. Customer engagement points

Figure 3. Enquiry, problem and complaint process

Administrative Human resources

Review and act

Reporting

Analysis

Management process

Planning

Critical success factors

There are certain factors which are more critical to

the success of an organisation’s complaints man-

agement process than others:

• highly visible, easily accessible channels of

communication of problems and complaints

• customer awareness/education of how to com-

plain and where to complain

• employee empowerment

• effective data capture, coding, analysis and

reporting to facilitate prevention

• standard operating procedures including

process definition (map), definition of com-

plaint and criteria for escalation as well as pro-

file of staff

• process and outcome effectiveness measures,

review, priority setting and action (including

root cause and prevention)

• teamwork, as many issues are cross-functional

and require fixing the customer first before

worrying about whose budget the cost will be

absorbed in

• continuous improvement of the complaints

management process

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Beyond that, the data and informationshould help with planning of customer-related initiatives. It should be factoredinto staff recognition programmes, train-ing initiatives and performance evaluation.Regular QA activity should occur in termsof consistent use of codes, updating ofcodes, elimination of outdated codes andensuring data integrity, system updates etc.

The bottom line

What about the bottom line? A five percent reduction in the number of customersleaving your organisation due to a com-plaints issue can double your profit. And aone per cent increase in customer loyaltycan lead to an average nine per centincrease in overall profitability. In fact,there is a lot that can be done in terms ofbetter quantifying the economics aroundcomplaints management. What would a 20per cent reduction in complaints add toyour bottom line? What if you couldextend a customer’s period of loyalty by25 per cent - what would that add to thebottom line? This is only the beginning.

But there are clearly often cultural issuesthat must be overcome as a first port ofcall. In many organisations, complaints arestill viewed as a costly nuisance ratherthan a marketing opportunity, and cus-tomer service is viewed as a cost centre,not a profit centre. The focus needs to beon prevention - and not just good fire-fighting. Effectiveness of resolution is farmore important than the absolute level ofcomplaints.

Soliciting complaints can be good businessstrategy as non-complainers (the silentmajority) can represent 35 to 70 per centof customers experiencing a problem withyour products and services. Complaint vol-ume is not a good measure of satisfaction.A complaints management process shouldbe viewed as the bedrock of any effectivecustomer relationship strategy

What process do your people use with cus-tomers to ensure effective problem or com-plaint resolution?• how do you ensure the exact problem

or issue the customer is having hasbeen determined?

• do you assess the severity of the issuefrom a customer perspective?

• how effectively do your people defuseangry or hostile customers?

• how effectively are they able to negoti-ate a solution?

• how good is the follow-through inmeeting commitments made to the cus-tomer?

Under what conditions do you elevate acustomer issue to a higher level in yourorganisation?• are there criteria in place?• are they consistently followed?• are escalated issues treated differently

than other complaints? How and why?

What approach do you have in place fordetermining how satisfied your customersare with the resolution of their problem orcomplaint?• how do you know if their relationship

has been preserved and their loyaltymaintained?

A is for action!

In the end, gathering all the complaintdata in the world won’t help anythingunless someone acts on it. It is amazinghow many organisations fall into this trapand keep trying to dig themselves out. Thecomplaints data keeps piling up, but noone does anything with it.

What do you do with this data? Can youname three improvements that have comefrom taking action on complaint data inyour organisation in the past 12 months?That is, after all, the point of having acomplaints system: to improve. Figure 3shows some of the key aspects of the man-

agement process. Clearly, it has a lot to dowith aggregation, analysis, interpretation,reporting of data, priority setting, actionplanning and improvement of productsand services. But which of the issues leadmost quickly to customer disengagement?This is where further analysis is useful.

Complaints from the inside out

The next step is to ask: who are yourorganisation’s internal customers for thisdata? Who could benefit from havingknowledge of it? Who is utilising the datacurrently and what are they doing with it?Into any review meeting should come notonly the rich complaint data and informa-tion, but the key process effectiveness mea-sures. How do you know if yourcomplaints management process is work-ing? Is it effective? These are key questionsthat must be asked.

Measuring the number of complaints is thesingle worst measure you could choose. Itcauses people to perform unnatural acts toavoid formally capturing complaints - par-ticularly since most professionals seemintent on issuing an objective to reducecomplaints.

Ted Marra is president of Marra Quality Inc, which

focuses on performance and relationship excel-

lence. He has been vice president at Walker, CSM,

president of consultancy, Care Associates and of

TARP Midwest. In these positions he concentrated

on the design, pilot testing and full implementation

of customer complaint management processes.

35Qualityworld

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‘Measuring the number of complaints received causes people to perform unnatural acts to avoid formally capturing complaints - particularly since most

professionals seem intent on issuing an objective to reduce them.’

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