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A customer complaints resolution process is a formal procedure to log, investigate, and resolve any customer dissatisfaction or problems. The overarching aim of such a process is to turn around a dissatisfied customer into a satisfied one.

To provide excellent services and products customer complaints need to be thoroughly assessed and addressed. Although most people do not like complaints, from an organisational perspective this information provides important information regarding customers' requirements, opinions, and viewpoints. In fact, Dr Robert Ramsey (1998, 2003) an educator and writer for many popular American journals, notes that "No matter what kind of factory, shop or office you work in or how good you are, sooner or later, you're going to get complaints. It's part of doing business. Every organisation has its share of dissatisfied customers, clients or patrons. Your's is no exception".

Ramsey identifies that people may complain for almost any reason at all - sometimes even for no reason! However, he believes that customers who do complain, (whether considered legitimate by the organisation or not), feel that they have been wronged and are looking for help not trouble. He notes that no facet of an organisation is 'complaint proof' with customer complaints being about such things as:

  • Product quality or safety;
  • Service;
  • Workmanship;
  • Timing;
  • Colour;
  • Size;
  • The way they have been treated;
  • Costs;
  • Shipping errors;
  • Employee attitudes;
  • Broken promises;
  • Misleading advertising etc.

However, Ramsey is clear that "The secret to successful complaint handling is to take every complaint seriously. Even if it's simply a misunderstanding or a mistake on the part of the customer, every complaint deserves your whole-hearted attention and personal handling" and "What appears petty to you may seem significant to others. If a complaint is important to the customer, it's important. Period!"

Ten key areas that make customers mad were identified from a UK government initiative regarding customer satisfaction (Anonymous, 2001a):

  • Being kept on hold for excessive lengths of time - while being told repeatedly how much the organisation values their custom;
  • Organisations which ignore basic consumer rights such as taking back faulty goods and being refused a refund and told to change it for another product;
  • Battling bureaucracy to resolve a problem - staff should be empowered to tackle complaints immediately;
  • Rude or over-friendly staff - both extremes can make customers feel uncomfortable;
  • Anonymous staff who refuse to give their names;
  • Broken promises - businesses should not make promises to customers which they cannot honour;
  • Inflexible delivery times - businesses which refuse to deliver beyond a narrow, fixed time, or at weekends when most customers are at home;
  • Lack of customer-friendly complaints handling systems - if it is difficult to complain, most people will not bother and will simply take their business elsewhere;
  • Having to pay premium rates to call advice telephone numbers, rather than free-phone or low-cost calling numbers;
  • No human voices on the telephone - mechanised systems that take customers through a lengthy process only to deliver them back to the beginning.

Dr Richard Gerson, President of Gerson Goodson Inc. a management and marketing consulting company in the US (cited Stairs 1998) sees customer complaints as the cheapest and best source of information you can gain about your company. Although he does not believe that the customer is always right, he believes that customer satisfaction is whatever the customer says it is, with speed, accuracy, timeliness, friendliness and responsiveness being key criteria. He also emphasises the importance of retaining customers and the value retention brings over time "If you can keep just 5 percent more of your customers with you over time, your profits, not your revenue, can increase 25 to 75 percent".

The information that can be obtained from complaints can be used to more effectively manage customer interactions, adapt products and services, and modify or better control a specific process. Customer complaint information not only needs to be used to reach an effective solution for the complaining customer but also to improve processes and products/services to prevent the same grievance from arising with future customers. Ramsey highlights this and states "Dealing with complaints is seldom easy or fun. Nevertheless, each complaint is an opportunity to solve a problem, right a wrong, convert a skeptic or salvage a valuable customer relationship that is in jeopardy of being lost" and "It never pays to downplay, ignore or deny complaints". In fact, he takes this further "Complaints aren't just nuisances or inconveniences. You don't get complaints because of bad luck. You get them because of bad performance". He sees complaints as a valuable warning sign, as good teachers, as real-world tests of a company's or department's problem solving capability, and similar to bodily complaints - they can tell you when something is wrong or about to go wrong. He identifies complaints as "just problems put into words" and "Without them, glitches, weak links or other difficulties can easily go unnoticed, undetected and unresolved until serious problems result". Ramsey sees complaining customers as messengers who are doing you a favour rather than being troublemakers.

Kevin Lawrence (2000) author, speaker, and business building coach suggests "Businesses encounter real problems far more often because customers don't complain, and the absence of customer complaints is usually a bad sign" as they don't feel comfortable voicing their concerns or not enough is being done to obtain their feedback. He believes that "If people feel that they are being listened to, understood and valued, they will usually give you a second chance". He cites a study by the Strategic Planning Institute:

  • The average business does not receive complaints from 96% of its unhappy customers;
  • At least 9 out of 10 non-complainers will not do business with the company again - they are gone forever;
  • Of the 4% of unhappy customers that do complain, 7 out of 10 will do business again with the company so long as their concern in handled properly, and 19 out of 20 if the grievance is dealt with swiftly.

Michael Michelson Jr. (2003) writing for The American Salesman Journal identifies similar figures:

  • 96% of dissatisfied customers don't complain;
  • 63% of these silent dissatisfied customers will not buy from you again;
  • 15% of all customers who switch product brands do so because a complaint was not handled to their satisfaction.

He also notes "frequently solving a problem, even at a loss to you and your company, will pay valuable rewards in the form of future sales saved". He also believes that even if a resolution is not in their favour it is possible for a customer to hold you in high regard as a result of your investing time in solving their complaint and letting them know that you did your best in doing so.

Michael Milgate (1998) Marketing Manager for EnergyFirst in Sydney Australia, also states that very few unhappy customers lodge complaints and prefer instead to go elsewhere or remain silent. He sees several reasons for this including customers believing (a) that it is not their job to help correct a problem, (b) that their voice will go unheard, (c) they do not want a confrontation, or (d) they cannot be bothered. He also believes that customers who do have a problem and do complain are more likely to buy again than those who have a problem and do not complain.

Investing time in resolving customer complaints is vital. Not only does it ensure customers' ongoing satisfaction and retain their business, it also means that new customers do not have to be found for those who defect. "With research showing business spends six times as much to recruit a new customer than to retain an existing one, good customer service is an essential component of successful business" states a writer in "Customer Interface" (Anonymous, 2000a). This includes managing customer complaints as effectively as possible for all parties.

A clear process and a coordinated response to customer complaints aims to ensure that:

  • Any problem notified by the customer (or that is discovered) is documented and reported to the appropriate area for resolution;
  • There is one point of customer contact to resolve a dispute e.g. there is a complaint owner;
  • Customers receive a response to their complaint within a specified period of time e.g. contact is made with the customer within 24 hours and a plan is established to resolve the complaint within 72 hours;
  • Issues are resolved to the customer's satisfaction;
  • Consistent behaviour and actions are taken by all employees managing complaints;
  • Required reporting occurs and recommendations to prevent future complaints are developed and process changes implemented to ensure the problem does not re-occur;
  • Cases are not closed until the root cause of the problem has been identified and the problem is resolved;
  • Customers are retained and a deeper relationship is developed.

To compete most effectively in the marketplace, organisations need a continuous flow of information on customers` requirements, opinions, and viewpoints so that they can react quickly to their changing needs. This input may be obtained through a formal planned feedback system whereby comments from customers are requested. Feedback can be obtained from sales visits, reports, call centre interactions, customer satisfaction surveys, customer complaints, and customer conferences or focus groups, and staff/customer interactions. The information gained is most commonly used to more effectively manage customer interactions, adapt products and services, and modify or better control a specific process. These feedback mechanisms are however, not always used to specifically determine, analyse and fix sources of complaints.

Complaints should be actively sought, the process publicised and made as easy as possible. Milgate stresses the importance of any complaints system being as easy as possible for the customer and that they must know where to go to address their issues. He also notes that if this channel is publicised and people use it, that they will feel listened to, understood, and see action. Sales visits, surveys, call centre logs and staff/customer interactions are all vital methods for actively obtaining client feedback and complaint information.

Complaint resolution should be devolved as low in the organisation as possible. John Malley and William Gooch from the University of Arkansas and Ken Griffin (1998) Manager of information Operations Centres for Entergy Corp in the US highlight this point "managers need to delegate complaint management to the lowest level possible to avoid lengthy resolution to customer disputes. If this is not done, another gap is created: the length of time it takes to resolve complaints. This can also create customer dissatisfaction". Milgate also stresses the importance of empowering staff to manage complaints "The best response system is one where a customer's complaint is dealt wit immediately at the time of the first contact, the so called 'fix it now' approach. This requires all contact personnel to use their initiative and to be empowered to do so "For complaint settlement empowerment to be truly effective however, personnel must be trained to listen and provide the appropriate personalised response".

Ramsey and Lawrence identify the following tips to boost the chances of effectively resolving complaints:

  • Respond quickly and personally - response time is critical and no complaint should go unattended for more than 24 hours. Failure to return calls or answer letters and the like can not only compound the original issue, but can become an additional source of frustration, anger and dissatisfaction'
  • Assume that the complaint is bonafide - do not try to deny responsibility or wrongdoing, belittle the complaint, argue or try to convince the customer they are wrong, give excuses or try to blame others. It may be that the problem has been a misunderstanding of what was to be expected from the service or product;
  • Listen - do not interrupt, don't hurry the explanation of the complaint, and don't be afraid of pauses in the conversation. Venting is seen as an important part of the healing processes and customers can be patient, understanding and forgiving if they feel that someone is listening, with listening sometimes being all it takes to restore their confidence;
  • Ask questions - and probe to insure that all information and facts have been gathered. Try to avoid jargon and other organisational specific language that could confuse or anger the customer;
  • Take notes - to ensure an accurate record of the complaint and the conversation;
  • Paraphrase your understanding of the situation - this confirms that you understand what the customers complaint is and ensures that they feel as though they have been heard and their complaint acknowledged;
  • Accept blame where appropriate, apologise - even if there is uncertainty about fault, remain civil no matter how angry or abusive the customer becomes;
  • Respond promptly, never promise what is unable to be delivered - and if necessary refer the customer to someone who can provide satisfaction or a solution if you are unable to. If it is likely that a resolution will take some time, make sure the customer is informed of the time frame;
  • Try to give the customer a number of solutions, where possible do more than what the customer expects - ensure that the solutions offered a not 'token' remedies. Where possible ask the customer to say what solution they would recommend or like. Lawrence notes that "in most cases, people actually demand less that you would expect. They usually just want you to take responsibility and apologise for any inconvenience";
  • Implement the remedies as soon as possible;
  • Thank the customer - for their feedback and for taking the time and energy to raise their complaint with you;
  • Follow up - via phone call, e-mail or letter to check on the customer's continued satisfaction.

For all complaints the root cause should be found. The tools of quality management should be used where possible and practical e.g. brainstorming, fishbone (Ishikawa) diagrams, Pareto analysis. In some instances it will be front line staff who manage complaints, in others work teams, and in some organisations a specifically designated position e.g. an ombudsperson or customer management executive. Whoever is involved may need to be taught these important skills.

Complaint resolution may also be affected by Legislation This may range from the time required to resolve a complaint through to ways that complaints must be redressed e.g. exchange of goods, return of money etc.

In many organisations Service Level Agreements (a performance agreement or contract between a service or product provider and a customer) are used to provide the parameters and agree the expectations for the organisation/customer relationship. In other organisations documents stating 'duties and obligations of the provider' and 'rights and responsibilities of consumers' are used. Such agreements and documents generally specify the terms of the supplier's responsibility to the customer (usually in measurable terms), what services or products the provider will deliver, the quality measures and indicators that must be met etc. Most often they are used with external providers/customers, however, they are also being used more and more regularly in-house between internal customer/provider groups.

A Service Level Agreement (or 'right, responsibilities and duties' statements) is likely to contain information related to:

  • Product/service quality levels e.g. performance indicators and measures;
  • Specific performance benchmarks e.g. benchmarks to which actual performance will periodically be compared;
  • Customer service expectations;
  • Availability of products and services e.g. delivery times, management of urgent deliveries;
  • Delays e.g. minimum and maximum delay times, actions to be taken if delays are likely to occur, notification methods and times;
  • Throughput e.g. volumes expected;
  • Cost e.g. per unit, for delivery, for repair;
  • Extent of remuneration if responsibilities are not met;
  • What percentage of the time services will be available;
  • Statistics and data that will be provided e.g. delivery times, faults, complaints;

Such agreements can reduce the incidence of complaints and/or allow for easier remedy if a disagreement arises as discussion and agreement on customer needs, wants and expectations, and what the organisation can provide as compared to these, have already been stipulated and agreed.

A key factor that is often left out of a customer complaints resolution process is a feedback loop. Such a loop facilitates individual and organisational learning to occur from the handling of a complaint. Where changes are made to policies and/or procedures, expected behaviours and levels of authority and accountability; staff should be informed and educated regarding these. The sharing of stories regarding complaints including what worked and what did not in particular situations also helps in the development of new skills and understanding, but also ensures a continued focus on improvement of customer service;

A feedback loop also ensures the complaint resolution process itself is assessed and evolves to best suit the organisation. Including a feedback loop will also assist in keeping the 'customers voice' as an active input into the organisation and the complaints management process by ensuring that a follow up of the customers view/satisfaction with the complaints resolution process from their own perspective occurs after a `resolution` has been implemented or achieved. Milgate confirms this stance "Complaints are frequently not fed back completely or accurately into the organisation to allow improvements to be made, nor are they used to update databases (when they exist) to alert marketing and sales staff to perceived problems. Worse still, most companies to not know how many complaints have been received".


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