Complaint management – the effective handling of customer complaints within an organisation – is a hot topic right now. Go to any online newspaper and search for “customer complaint” and you’ll inevitably find stories on banks, airlines, telco’s, and fast food companies to name but a few.
Effective complaint management is about addressing the specific issues of individual customers in order to retain their business and protect revenue. You only have to look as far as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that was conducted in Australia during 2018 to see where ineffective complaint management can lead*.
But other than to avoid customer dissatisfaction and non-compliance with industry regulators, why else should an organisation have an effective complaint management procedure? Here’s three good reasons:
Continual Improvement – With their feedback, complaining customers are offering you important information about your products, services, processes, and/or people and giving you the chance to not only retain their business but fix the problem so other customers aren’t affected by it as well. Dissatisfied customers who don’t complain are more than likely lost to the company for good and the worst part is: you won’t even know the reason. Effective complaint management ensures that customer feedback gets to the right departments within the business and contributes to overall improvement.
Word-of-mouth – to reduce bad word-of-mouth which is amplified through social media. One unhappy customer can nullify the effect of multiple promoters of your brand in terms of their impact.
Productivity – complaints take up a disproportionate amount of time, effort and cost to resolve. Resources that could be spent in much better ways within the business. Not only that, those costs increase the longer it takes to resolve.
Developing a complaints handling policy
When developing a complaints handling policy, start with the end result you want and work your way back. In this case, it’s a customer who feels satisfied that they have been heard, that their time has been respected, that they have been treated fairly, and that their feedback has been used to make improvements. So at some point very early in the process, reassure customers that you value their feedback and are committed to resolving their issues in a fair, timely and efficient manner.
Your complaints handling policy should also:
Explicitly detail how customers can make a formal complaint,
identify the steps you will take to address and resolve complaints,
indicate some of the solutions you offer to resolve complaints, and
inform customers about your commitment to continuous improvement.
Complaints handling procedure
Once you have developed a policy you can create a procedure for handling complaints. A procedure will ensure consistency i.e. that complaints are dealt with in the same manner, every single time.
A typical procedure might include the following steps.
1– Acknowledge the complaint
Thank the customer for bringing the matter to your attention, apologise and accept ownership of the issue, and don’t try to shift blame.
2 – Understand the complaint
Get all the facts by asking all the necessary questions.
3 – Record details of the complaint
Log the complaint in a central system. Keeping records of all complaints in a central register helps you identify any trends or issues.
4 – Determine the options for fixing the problem
Ask the customer what outcome they are seeking; it could be a repair, replacement, refund or apology. Decide if the request is reasonable.
5 – Act quickly
Aim to resolve the complaint quickly. The longer a complaint takes to resolve, the more likely it is to escalate and the greater the cost to the organisation.
6 – Keep your promises
Follow through on your commitments and keep the customer informed if there are any delays in resolving their request.
7 – Follow up
Post-resolution, contact the customer to ensure they were satisfied with how their complaint was handled. Also, let them know what you are doing to avoid the same problem re-occurring in the future.
CentraCX supports the complaints workflow by making it easy for customers to complain and getting the complaint to the person within the organisation empowered to do something about it. CentraCX also supports collaboration on complaints by bringing everybody involved with service delivery together ensuring complaints are resolved faster.
* Perhaps as a result of this Royal Commission, ASIC has released Regulatory Guide 271 (RG 271) which contains updated standards and requirements that will drive financial services firms to ensure they handle consumer complaints in a fair and timely manner. Coming into effect on 5 October 2021, it aims to improve the trust and confidence customers have with the financial services industry and to minimise the costs that arise from protracted dispute resolution processes.
Some time ago you implemented a Voice of the Customer program. The customer feedback started coming in, and each month the score goes onto the dashboard which gets reported to management. The analysts within the Customer Experience team analyse the data and create a list of things that need fixing, you prioritise the list and develop a range of initiatives. A month later, you go through the process again.
It’s great that your scores are getting management visibility and that you’re improving the organisation’s CX by basing it on explicit customer needs, but if your VOC data stays within the CX team, I’m sorry to say you’re doing CX management wrong for at least a couple of reasons.
Firstly, everyone knows intuitively that customer feedback should be a concern for everybody in the entire organisation but practically involving the entire business in CX and VOC can be very difficult to do at scale.
In the past, I’ve held brainstorming sessions where I invited key internal stakeholders into a room, played them the feedback, and then as a group we tried to understand the feedback and come up with ideas to address the issues. More heads are always better than one in these situations and the diversity of thought always led to better solutions being developed.
But while these brainstorming sessions were valuable, because I was taking a large amount of time from peoples’ calendars, they only happened a couple of times a year. In my work with CentraCX I’ve found that using a capable VOC platform means that these sessions can take place virtually every single day. They key benefit of CentraCX is that it brings people together to collaborate around customer feedback turning customer feedback management into an everyday operational process.
Once engaging with customer feedback is embedded in your organisation you will find another unexpected benefit: your improvement initiatives will be more successful as your employee’s ability to adopt to change will significantly improve. The more your employees understand the organisation’s need to respond to customer feedback and the more they are engaged in creating the solutions, and the easier and faster you will find it to institute change.
The second reason you’re doing CX management wrong is: customer feedback can be used for so much more than just development of CX improvement initiatives. It’s like buying a smartphone and only using it to make calls. There’s so much value you’re missing out on!
Beyond business reporting and process/product improvement, there are other use cases for customer feedback across a business that increase its value to organisation incrementally.
The purpose of a business is to create and keep a customer so it follows that everybody within a business is there to contribute to customer outcomes. Whether they work on the frontline or not, everybody within your organisation wants feedback to understand how their areas of responsibility are affecting customers; they want to hear what customers are thinking and feeling.
By regularly communicating relevant customer feedback verbatims, you’ll engage the organisation and help to make the company more customer centric – a strategic goal of every good CX manager and one of the reasons your role was created in the first place. And driving change off the back of customer feedback is incredibly empowering!
Where the feedback is positive about an employee, publish that person’s name. Let them bathe in the warm glow of the recognition that they’ve done a good job. If the feedback is negative and uses employee names, I’d strongly advise not sharing it organisation-wide unless you can remove the reference to individual employees for fear of shaming them which does nothing to advance your cause.
Retention, Complaints & Compliance
We often think about surveys as providing customer insights to large groups of people internally, but the survey process can provide a very powerful mechanism for actively soliciting and managing individual customer complaints. In today’s digital age, each individual customer has the power to set off an avalanche of negativity about a brand simply because of one poor experience. Whether it’s running off to regulators, ombudsmen or even social media it only takes one unhappy customer, who hasn’t had an opportunity to have their complaint addressed, to start a series of events that can have very serious consequences. Using surveys as an integral part of your complaint management process simply makes sense.
If customer feedback never leaves the CX department and all you’re using it for is business reporting and/or to drive product or process improvements, you’re only getting a fraction of the value it offers. Let the customer’s voice ring out within the four walls of your organisation to engage and empower your fellow employees and improve your business.
We all know someone who is unconditionally in love with a brand; they simply won’t stop talking about their latest purchases and recommend that others buy from them as well. Well over a decade ago, when Bain Consulting researched this behaviour, they found a strong correlation with continued brand loyalty and as a result today’s ubiquitous Net Promoter Score was created.
The Net Promoter Score asks the question “on a scale of 0 to 10 how likely are you recommend us to family and friends?”. Based on the response, customers are categorised into three classes: Promoters (9 or 10), Passives (7 or 8) and Detractors (0 to 6).
Is having a Passive customer better for your business than having a Detractor? Using the NPS system, because they’re more likely to recommend you to family and friends, intuitively you’d say yes.
In this post, I’m going to suggest the opposite.
If someone is a Passive customer of your business, nothing’s happened to disappoint or wow them throughout their history with you. They’re equivocal about you. You’ve met their expectations all along but there’s no relationship there. And that means the next competitor who turns up with a newer feature, a cuter salesperson or a better price is likely going to win them away from you.
A Detractor customer is a Detractor for a reason. Something bad has happened at some point. Maybe it’s happened multiple times. They’re emotional about you (which we want as CX managers) but not in a good way (which we don’t). While Promoters are often simply fans of the brand, Detractors are rarely unhappy because of brand reasons. Something has happened to make them that way. The business has created them.
The good news is that if you’ve created them, you can also re-create them. And the even better news is that research shows that if you can convert a Detractor, chances are they will become your most ardent and influential Promoters.
In 1965, eminent American psychologist, Elliot Aronson, conducted a series of social experiments suggesting that people are more sensitive to gains and losses in esteem than the level of esteem itself. When someone always supports us, we take it for granted and can discount it. But we regard someone who began as a rival and then became an enthusiastic supporter as an authentic advocate.
Aronson concluded that a person whose liking for us increases over time will be liked better than one who has always liked us. Personally, we find it more rewarding when someone who was initially negative toward us, gradually becomes more positive than if that person’s feelings for us were positive all along.
Aronson also said that the feeling is mutual. To like us, resistors have to work especially hard to overcome their initial negative impressions. Moving forward, to avoid the cognitive dissonance of changing their minds yet again, they’ll be especially motivated to maintain a positive relationship.
To draw a parallel with NPS, once Detractors become Promoters, they are much more likely to remain a Promoter than someone who was always a Promoter. Our best customers aren’t the ones that have supported us all along. They’re the ones who started out against us and then came around.
The third conclusion Aronson drew was that it is our former adversaries who are the most effective at persuading others to join our movements. They provide better arguments on our behalf because they can empathise with the doubts and misgivings of other resistors and fence sitters. And they’re a much more credible source because they haven’t just been blind followers all along.
This leads me to my second parallel between this research and an NPS program: Detractors who become Promoters are much more likely to credibly refer their friends and families to your business! People are more likely to be persuaded if they know the person referring the business was once a critic of it.
For these reasons, I believe organisations should be focussing their efforts on converting their Detractors:
They’re easier to shift than Passives – there’s already emotion and a relationship there,
They payoff is greater – there is a distinct possibility that they’ll jump the Passive category entirely straight to Promoters and once there, they’re much more likely to remain Promoters, and
Once they become a Promoter, they’re much more credible as a referral.
CentraCX is a Voice of the Customer platform that can help you collect customer feedback, identify your Detractors, and turn them into Promoters.
Contrary to conventional thought, this phrase never originated as a demand from a customer. It came from London department store owner, Harry Selfridge, in 1909 and was intended to convey to customers that they would receive excellent service at his department store and to convince his employees to provide excellent service.
Selfridge wasn’t alone in placing customers on a pedestal. Similar variations of the phrase found in other cultures include: “le client n’a jamais tort” (the customer is never wrong) in France, “der Kunde ist König” (the customer is king) in Germany, while in Japan they took it to a whole new level with “okyakusama wa kamisama desu” (お客様は神様です) meaning “the customer is a god”.
Four different cultures couldn’t be wrong, could they? Whilst this mantra might have had a positive effect on customer perceptions – especially at a time when misrepresentation was rife and caveat emptor was a common legal maxim – it had the opposite effect on employees. Often disempowering them in their relationship both with the customer and the business.
We all know that customers can be jerks sometimes, right! Need evidence? Look at the lady who walked into Bunnings last year in the middle of a pandemic when masks were mandatory in public claiming that she didn’t need to wear one. Not very queen-like is it? And certainly not behaviour befitting a god. Watching that video you feel just awful for the poor Bunnings employees who did a wonderful job in the face of such adversity. Was she right? I think we can all agree that the answer is no.
In extreme cases like that, when a business owner goes by the mantra “the customer is always right” and takes the customer’s side, the effect on employee morale is devastating. If employees think you don’t have their back when they’re dealing with a customer who is being completely unreasonable, they’re going to resent you for it.
But what about when the customer isn’t being completely unreasonable? More often than not, customers aren’t jerks and have a genuine issue. In these instances, they’re still not “right” but they’ve only got half the story. They know there’s a problem but they usually don’t know what’s caused it.
The employee is always right
In these instances, what’s needed is a “translator”. Someone who can turn the customer’s external language (for example “my delivery was missed”) into internal language (“our northern region driver called in sick yesterday and we have no contingency drivers booked in those situations”).
These “translators” are frontline employees and they are a gold mine of information. Who else within the company is fluent in two “languages” and gets to use both on a daily basis? Front line employees contextualise customer feedback adding a further layer of richness to the data.
So frontline employees are just as important to your business as customers. Maybe it’s time we had another look at some of our old sayings, and put our employees at the centre of them.
The employee is always right. The employee is never wrong. The employee is king. The employee is a god.
In the wise words of Sir Richard Branson “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
Imagine turning up for work each day as a frontline worker knowing you had that kind of support from your company. Imagine what kind of work you would do.
Connecting your customer and employees together for the full picture
What if you could have the best of both worlds? Ensuring that both your customers and frontline employees are heard.
At CentraCX, we believe there are 2 sides to every conversation. So we built Centra CX VoC to collect both customer feedback and frontline feedback. Combined, these insights provide the complete picture of your customer experience enabling you to action what really matters.
Companies that tap into the valuable resource that is frontline feedback using their customer feedback software are giving themselves the full picture when it comes to customer issues, and are more likely to get it right for customers and employees.
OK now I’ve got your attention let’s qualify that statement: collecting customer feedback without having it as part of a program that ensures action is a waste of time.
It’s great that so many companies have Voice of the Customer programs but it’s an unfortunate fact that for many of them, the data gleaned from customers will only be cursorily looked at or get summarised and go onto a dashboard where it will be swamped with other information. And that’s it. A month later, it happens again.
If the goal of an organisation is to become truly customer centric then just listening to customers isn’t enough. You actually have to do something with what they’ve told you. There needs to be a process created around customer feedback that ensures insights are extracted and acted upon. It needs to be part of a defined program that not only collects the data but analyses, synthesises and socialises it as well. In other words, glean insights from what customers have told you, tell the story of the data, and get it into the hands of the right people at the right time.
Having feedback as part a broader interconnecting network within a business is what makes it useful. There needs to be procedures set up around its receipt to ensure the maximum benefit is gained from it and, indeed, that it achieves the goal of the organisation in collecting it in the first place.
The four main reasons that organisation collect feedback are: complaint management, product and process improvement, business reporting and employee engagement. Ensure that you clearly recognise your actual purpose and create action plans, assign responsibilities, and define the metrics you’re going to use to measure success. Then, in order to maintain a continuous improvement cycle, close the loop on your change management process. And it’s so important to close the loop with the survey respondents! Let them know their voices were heard and tell them what you’ve done with what they told you.
One of the unique benefits of CentraCX is that it operationalises feedback within a business. The features of the platform (including Tribal Analytics, machine learning classification and workflow) help create the processes necessary to embed the voice of the customer in companies’ day-to-day operations.
Voice of the Customer is not a platform and not an activity, it’s a system of management. Having processes around feedback so that it is part of a broader continual improvement system is what makes it useful. The risk of not making customer feedback part of your operating rhythm is falling back into old habits, failing to transform, and ultimately negating the reason the organisation sought to collect the voice of the customer in the first place.