Market-based Customer Complaints Management Initiatives
- Service & Complaints Guides
- A Practical Guide to Handling Consumer Complaints
- Best Practices in Handling Customer Complaints
- A Guide for Consumer Complaints Management
- 6 Steps to Achieve Customer Service Excellence
What are Customer Complaints Management Initiatives?
Businesses know that customers expect prompt, courteous attention and accurate information when conducting a transaction. They want the goods and services they buy to be of acceptable quality, and for the merchant to act quickly and appropriately when problems arise.
Customer complaint management (Customer Compliant Management) initiatives are mechanisms, approaches and techniques merchants use to increase customer satisfaction with their products and services. These initiatives attempt to anticipate and prevent problems and complaints from arising, promptly and appropriately address complaints through internal processes, and, when internal complaints-handling processes prove insufficient, resolve disputes fairly, effectively and efficiently through external private dispute resolution approaches. Below, we explore these three aspects of Customer Compliant Management individually, and conclude by noting that some initiatives take a comprehensive approach to Customer Compliant Management. The expenses associated with developing and implementing effective customer complaints management could be considered a cost of maintaining good customer relations.
As described in this Guide, Customer Compliant Management initiatives are:
- voluntary (i.e. not expressly required by law)
- developed and implemented by individual firms or industry associations, governments, or customer or standards organizations
- applicable to a single store or company, several firms or organizations, an entire sector or many sectors
- usually initiated in response to, or anticipation of, customer or competitive pressures, the real or perceived threat of government action, or a combination of these
- operated within a legal framework that includes customer protection, competition and contract law components.
Effectively preventing and resolving complaints can be rewarding for businesses. Research suggests, and the examples in this Guide show, that businesses can promote customer loyalty, enhance their reputation and gather valuable market intelligence by developing and adhering to service standards, policies and guarantees that signal honesty and integrity to customers, and decrease the likelihood of problems occurring.
The Business Case for Customer Compliant Management Initiatives
Using Customer Complaints as Market Intelligence
Research reveals that complaints are one of the most important types of communication customers have with businesses, and constructive responses to complaints can help retain customers who would otherwise take their business elsewhere.
Through the implementation of effective complaints management initiatives, businesses can detect and resolve customer service problems that, until that point, they didn’t even know they had.
Customer Loyalty and Effective Complaints Management: The Competitive Edge
In a vibrant marketplace, in which firms match each other on products and services and price, how does one firm gain a competitive advantage? Research suggests that building customer loyalty is key, and that customer complaints management is an effective way to do so.
Customers show their loyalty by repeatedly shopping at a store and recommending a store, product or service to friends and relatives. A recent Canadian survey found that, depending on the retail category, between 40 and 70 percent of customers could name a company to which they consider themselves loyal. One of the best ways of building customer loyalty, the survey suggested, is to build a long-term relationship of trust. Customers consider a favourable return policy to be the number one way for a company to earn their loyalty. Trust is also built when the company shows that it understands its customers’ needs, values customers as individuals, delivers on promises, and is responsive and accessible.
Positive staff attitude, shown by honesty, helpfulness and cheerfulness, also plays a large role in building a trust relationship. In contrast, being rude to customers, acting as if it didn’t matter whether or not customers were there, or ignoring customers leads to customer desertion.
Consequences to Business of Dissatisfied Customers
The results of a U.S. survey showed that unhappy customers, even when they don’t complain, have a negative effect on a business.
- About half the time, customers who have a problem with a product or service are not likely to tell the company about it.
- Nine out of ten of these “silent critics” will probably take their future business to a competitor.
- One out of every two customers who complain are not thoroughly satisfied with the company’s efforts to solve the problem.
- Dissatisfied customers typically tell between seven to nine other people about an unsatisfactory experience with a company.
- Negative information has twice the impact of positive information on purchasing decisions.
- Word-of-mouth is one of the most important factors influencing a customer’s decision to buy from a company.
- Summary
- Introduction
- Market-based Customer Complaints Handling Initiatives
- Preventive Customer Complaint Handling Initiatives
- Internal Complaints Handling Initiatives
- External Private Dispute Resolution Initiatives
- Comprehensive Complaints Handling Systems
- Characteristics of Effective Online Trustmark Programs
- Online Redress
- The Need for Effective Customer Complaint Handling Initiatives
- Customer Complaint Handling Initiatives and the Law
- Developing and Implementing Complaint Handling Initiatives
- Elements of Successful Customer Complaint Handling Initiatives
- Where Can I Get More Help?
