Customer Complaints

This week I received two customer complaints from individuals who were unhappy with two different companies. When I was teaching, I used to cover customer complaint management as part of my lecture on services marketing. Some of the points that I used to make:

Actively solicit complaints. Only 4-10% of customers who have a compliant actually bother to lodge a complaint. Instead of complaining, it is easier to “exit” and decide not to come back. This is what I do when at a new restaurant they ask “how was everything?” If I have decided not to return, then this is a pointless conversation. Better to respond “fine” and move on, or write a poor review on TripAdvisor if I have the time. This is why organizations must make it easier for customers to complain in order to obtain feedback that helps them improve.

Remember complainers are friends. Following from the previous point, research indicates that people who have a problem, complain but do not get their complaint resolved are much more likely to repurchase than those customers who have a problem and do not complain (some studies indicate 50% versus 7%). The reason a person is complaining is that they have decided to continue to do business with the organization.

Empower front line to resolve complaints. Complaints are usually made to the front line staff who are usually the persons with the least discretion in the organization. Managers are always worried that letting the front line staff resolve complaints may be expensive as they may spend too much. Beyond the speed at which a complaint is resolved, all research indicates that front line staff are the most frugal on this front. The same amount of absolute money (say giving a 200 rupee gift voucher) is a much larger sum psychologically for the poorly paid front line staff, compared to say the CEO if he or she has to resolve it.

Segment complaining customers. No one is a bigger believer than me in processes when it comes to services and managing front line employees. But it has to be smart processes, which in this case, means segmenting complainers into the following four groups.

  •  “Negotiators” are complainers who want to be compensated for organizational transgression. Best to ask them “how much” right away, as often what they ask for will be less than what one would have given them in any case. The remaining negotiators, one can negotiate with.
  •  “Quality controllers” are complainers who want to feel and see that their suggestion has helped improve the product or service. They will be satisfied when they see changes.
  •  “Reasoners” are complainers who are driven to complain primarily by wanting to understand how could this happen. They purchased from a company they trusted and will be satisfied only by a proper explanation.
  •  “Victims” are complainers who when they complain already make excuses. It is as if they almost expected this disappointment to happen since it always happens to them. They see themselves as victims and seek sympathy.

From an organizational perspective, quality controllers are the most useful but often company’s processes are set up best to deal with negotiators. However, offering compensation to everyone satisfies only the negotiators.

On the topic of complainers, I read an interesting article in Psychology Today. While we all complain sometimes, it’s best not to make it a habit as the article states. It rarely solves anything and puts you in a negative frame of mind.

One can always find something to complain about. How about complaining that I am too beautiful. Well, nice article on BBC website on the downsides of being drop dead gorgeous! Well this is a luxury problem that I don’t face.

To end, an article on the 5 trends of the future for economic growth. Perhaps, nothing new but still well written, with data, and to the point. Was a good read for me.



Magic Dust

Die with memories, not with dreams

One Comment Add yours

  1. Good thoughts Nirmalya. Thank you for sharing your experience and a possible model. I will try and apply it to two instances

    Instance 1 B2C Food Industry
    My favourite the OMG burger of KFC. After movie haunt at KStar Mall Mumbai. Once the same salesperson forgot a part of my order and the second time to return my credit card!!!. I gave feedback not as a quality controller or negotiator but as someone who just wanted to reengage with my OMG burger from the same outlet. I don’t like the alternate to this product that MacD offers next door. Product and convenience play a role in feedback. So maybe I am driving process from a purely selfish motive of product

    Instance 2. B2B Service Industry
    As a relationship manager for a services firm my responsibility was to establish a long term mutually beneficial do with a high pot client. I engaged with the client regularly to seek process definition ideas. They co-owned the relationship. Why wait for CSI which is often doctored? I was the negotiator this time. We upward negotiated because the client experienced the value add.

    Applicability of the insights vary based biz model of dialogue and engagement perhaps…

    Liked by 1 person

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