Complaint-Recovery Process Jason Paster The Pennsylvania State University

What will be covered today? Improvements of the complaint-recovery process for your business Classifying customer complaints Responding to the customer The complaint-recovery process in action A self evaluation of your business This is a preview of the presentation. All points will be covered on forthcoming slides.

What is the Complaint-Recovery Process? The process where companies receive complaints, process them, and communicate back to the customer.

What is the goal? 100% customer satisfaction Documentation of customers problems/concerns for future reference To fix the customers problem/concern wherever feasible, as soon as possible These points are some of the goals of a company that a good complaint-recovery process will help reach.

How does your organization measure up? What has your office done to makes sure it listens to the voice of the customer? How do the leaders in your organization view complaints? How does your organization make it easy for customers to complain? What does your organization do to make it easy for employees to solve problems? Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01) This is a brainstorming activity. Bring up one point at a time and discuss it with the group by asking the audience to answer the questions. You should write the comments brought by each of these questions on a board in plain view throughout the presentation. You should not comment on whether or not the groups answers are right or wrong. This activity is just to get everyone thinking about where their company stands on customer complaints. The rest of the presentation will allow the audience to evaluate their company based on the brainstorming done on this slide. At the end of the presentation you will evaluate the information on the board. The next two slides continue the brainstorming activity.

How does your organization measure up? How does your organization track and analyze complaints? How does your organization use information about complaints to fix easy problems fast? How does your organization use information about complaints to identify and address underlying problems? Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01)

How does your organization measure up? How is customer service incorporated in your organization’s vision, plans and actions? How do you get complaint information to the CEO or top management? How does your organization measure customer satisfaction for your overall service? Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01)

Classifying Complaints Develop a system within your organization to rank complaints on urgency. What is the magnitude of the complaint? EVERY COMPLAINT IS IMPORTANT! Develop a system within your organization to rank complaints on urgency. How urgent is the problem the customer is having? It is something that needs to be handled immediately? If so, is there a system implemented of who to contact if a urgent complaint is filed? What is the magnitude of the complaint? Although every complaint is important, some require more attention then others. Your company should set guidelines as far as who gets involved and at what point. As stated earlier, it is much more cost efficient to take care of the problem with the fewest number of people. But sometimes that is not the case. If a major grievance is filed by a customer who buys multi-million dollars worth of goods from your company, it should require more attention then when a customer who makes a five dollar purchase. In the case of a big account, sometimes it is better to get upper-management involved. A call from the CEO to a big account is more appropriate then a letter that would be sent out to a small customer. EVERY COMPLAINT IS IMPORTANT! If a customer took the time to complain it is obviously important to that customer, thus it should be important to the company. Whether or not it is the 1000th complaint of the same type, each customer should receive the same respect and explanation.

Complaint-Free Customer Service? No one is perfect, everyone makes mistakes! Sounds nice, but it will be counterproductive in the long run. “A good service accepts that things are wrong and fixes it.” -Ken Birkby, head of customer service for Marks & Spencer No one is perfect, everyone makes mistakes! You want to make it easy for customers to complain. If you notice your complaints dramatically went down when a new system was implemented, it may mean your new system has flaws. You should make it very easy and even invite the customer to voice his/her concerns. Sounds nice, but it will be counterproductive in the long run. Although it would seem nice to have customers that don’t complain, in the long-run this could end up hurting your business. As stated before customers who complain and have their problems resolved are more loyal then customers who never complain. Additionally, complaints identify problems, without complaints your problems can remain hidden.

Complaint-Friendly Customer Service It should be easy for customers to get in touch with your company. Customers should always be treated with respect and courtesy. The customer is ALWAYS right, even when they’re wrong. It should be easy for customers to get in touch with your company. The easier it is for a customer to complain the more comfortable a customer will feel. Your company should have a phone number and address to get in touch with someone that is easily identifiable. People like attention. If you give your customer the deserved attention, he/she will more likely stay loyal to your business. Cut the red tape, the simpler it is for the customer to speak to the right person in the right department the easier it is to solve the customers problem. Customers should always be treated with respect and courtesy. This is self explanatory. The customer is ALWAYS right, even when they’re wrong. If you argue with a customer you will be the one to lose in the long-run. If the customer feels he/she was right and you tell them he/she was wrong he/she will be not likely to return to your business. This should be taken within reason. If you feel a customer is scamming you the situation should be evaluated further.

Communicating to the Customer Organization Patience Understanding Assurance Honesty Organization When you confront the customer about a complaint, especially over the phone or in person, be organized. Know what the problem is, what went wrong, and what you can do to fix it. Patience Take a deep breath and relax. Remember, your company messed up somewhere along the line. You may have to deal with very upset customers from time to time. If you get uptight it will frustrate the customer even further. Understanding Be understanding and show some sympathy to your customer. People like to connect to on a personal level. Apologize and let the customer know that your company is truly sorry for the inconveniences it may have caused him/her. Assurance Assure your customer that the problem has been looked into and will be followed up. Then look into the problem and follow it up. If you let it slide and forget about it, if it problem arises again you will lose creditability. Honesty Be honest and upfront with your customer. If you get caught in a lie you and your company will lose all creditability.

Getting Customer Feedback Passively Solicited Customer Feedback Waiting for the customer to come to you about grievances/gratitude's. Actively Solicited Customer Feedback Asking the customer if he/she has any grievances/gratitude’s regarding his/her experience with your business. Foster, S. Thomas. Managing Quality, an Interactive Approach. Upper Saddle River, NJ: Prentice-Hall, 2001. Passively Solicited Customer Feedback This is strictly customer initiated contact with your company. This can be done by a customer sending an email, letter, or phone call to your company outlining any gratitude’s or complaints about your business. Most feedback will be towards the negative aspects of your business. Actively Solicited Customer Feedback Taking an active approach to get in touch with the customer. This includes surveys, telephoning customers, as well as focus groups. By understanding the customer companies are more likely to fix problems before the complaint letters come flowing in. This approach is more expensive, but in many industries it is worth the extra cost.

Implementation of a New System Issue a policy statement Establish an implementation team Establish a tracking system Develop recommendations for improvement Implement Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01) Issue a policy statement. Make the statement that says the organization embraces complaints and view them as opportunities. Establish an implementation team. Identify each step in the process and get a representative from each area in the complaint handling process to work on a new system. Establish a tracking system. Have employees record and classify complaints so they will be able to analyze the data and report to top management. Develop recommendations for improvement. Listen to employees recommendations to improve the core processes and develop a system where front-line employees can resolve the problem on first contact. Implement. The team should put an action plan together with a timetable for implementation.

Some Suggestions for Improvement… Make it easy for your customers to complain and your customers will make it easy for you to improve. Respond to complaints quickly and courteously with common sense and you will improve customer loyalty. Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01) Make it easy for your customers to complain and your customers will make it easy for you to improve. Informed customers know how things should work and if things aren’t working properly, customers are the first to know. Customers who are dissatisfied tell twice as many people as those who are happy with the product/service. Use feedback from phone calls, letters, and surveys to identify causes of an unhappy consumer. Use that information to look into a fix for the problem. Respond to complaints quickly and courteously with common sense and you will improve customer loyalty. If a company quickly recognizes a customers complaint, customers usually reward the company by remaining more loyal then a customer who has never had a complaint.

Key to Success Doing the job right the first time + Effective complaint management Maximum customer satisfaction/loyalty - Toyota Motor Sales USA, Inc. has adopted this formula for customer satisfaction The most customer loyalty can be gained by effective complaint management. Companies should try to do it right the first time, but it is important to know that you can get more out of it if a problem arises and it is handled right.

More Suggestions for Improvement… Using technology is very important in a complaint handling system. Recruit and hire the best for customer service jobs. Resolve complaints on the first contact. Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01) Using technology is very important in a complaint handling system. A database is essential to keep a record of customer complaints. Present the findings in a report to all employees, including upper management, outlining problems and possible fixes. Recruit and hire the best for customer service jobs. Put your best, well-mannered, well-spoken employees in touch with the customers. Give the customer the image of a back office that is patient and well-organized. The customer-service position can be used for employees to learn all about the different areas of a company. Resolve complaints on the first contact. You can save money by eliminating unnecessary additional contacts that escalate costs. When two or more employees get involved it is more expensive than have one person handle it right the first time.

Electronic Controls Company (ECCO) -THE PROBLEM Started receiving an unusually large number of complaints No way to keep track of complaints Management sensed they were getting the same complaints repetitively Finegan, Jay. “The rigorous customer-complaint form.” ABI Inform. March 1994. V16 n3. P. 101-103 Jim Thompson, CEO of ECCO, realized he had a problem. ECCO manufactures and markets strobe lights and backup alarms for utility trucks. Many phone calls and letters were coming in regarding bad parts. The customer service reps were authorized to issue credit memos, ship replacements, or do anything else to please the customer. The feeling was that the same complaints were coming in over and over. The challenge was to develop a tracking system of customer complaints. SEE NEXT SLIDE FOR THE SOLUTION TO THE PROBLEM.

Electronic Controls Company (ECCO) -THE SOLUTION The customers information, complaint, and corrective action were all stored into a database. Hard copies of complaints were filed in two binders Open - complaints which are pending Closed- complaints which have been solved Management was able to track the common problems to figure out the source of the problem, which yielded a fix. Finegan, Jay. “The rigorous customer-complaint form.” ABI Inform. March 1994. V16 n3. P. 101-103 A database was developed to track customer information, complaint, and corrective action. With the information provided by the database, management was able to identify repetitive problems and fix them. ECCO went a step further, they took an active approach and sent customers surveys to see how satisfied the customers were with the quality of product and service. The company also changed the way complaints were handled. Hard copies of complaints were placed in a binder labeled “open” until the complaint was addressed and fixed. Afterwards it was moved to the “closed” binder. This prevented documents from getting lost amongst piles of papers. With this new system in place, less complaints were coming in and customer satisfaction has gone up.

Activity Write down 4 ways to improve your company’s complaint-recovery process. Do your improvements include: Less Red-Tape Better use of Technology More Knowledgeable Customer Service Employees Faster Response Times Instruct the audience to form small groups of 2 or 3. Give the groups about 10 minutes to discuss on improvements they can make to their company. After the time is up read over some of the answers written on the board from the brainstorming activity from the beginning of the presentation. Proceed to call on select groups to see what they came up with. Bring up the rest of the points on the slide to show the groups all the aspects of improvement, which they can compare to their answers. Tell the group that the list above is only a few key improvements, but they are not feasible in all industries. In addition, the groups’ responses will still be right even know all the responses are not listed above.

Summary The complaint-recovery process is key to surviving in business. The process should be constantly reviewed for improvements. The customer should play an active role in evaluating your process. With a winning process your customers will be happier, which in turn will make your business more successful. The complaint-recovery process is key to surviving in business. As stated earlier, a good process will lead to customer satisfaction, which will lead to a successful business. The process should be constantly reviewed for improvements. The day your process is left alone and forgotten about is the day it will begin to crumble. Technology constantly evolves and your system should be modern. The customer should play an active role in evaluating your process. Without customer input your business will not have the slightest clue what the customer wants. Keep an open communication line between you and the customer. With a winning process your customers will be happier, which in turn will make your business more successful. If your customers are happy your company will be happy.

Bibliography Brown, Stephen W. “Service recovery through IT: Complaint handling will differentiate firms in the future.” Marketing Management. v6 n3. Fall 1997. p.25-27. “Complaint handling can increase customer loyalty.” Management Today. December 1998. p. 11 Federal Benchmarking Consortium , “Best Practices in Resolving Customer Complaints,” Internet. http://www.npr.gov/library/papers/benchmrk/bstprac.html. (2/16/01) Finegan, Jay. “The rigorous customer-complaint form.” ABI Inform. March 1994. V16 n3. p. 101-103 Foster, S. Thomas. Managing Quality, an Interactive Approach. Upper Saddle River, NJ: Prentice-Hall, 2001. McClendon, Bruce. “Complaint-free customer service.” Public Management. V79 n3. March 1997. p. 21-23. S, Stephen. “Customer evaluations of service complaint experiences: Impliceations of relationship marketing.” Journal of Marketing. v62 n 2. April 1998. p. 60-76. At this point take questions from the audience.