Developing and Implementing Consumer Complaint Management Initiatives

As we saw, Consumer Complaints Management initiatives encompass preventive techniques, internal complaints-handling approaches and external dispute resolution programs. These come in a wide variety of shapes and sizes, and are initiated for many reasons. Comprehensive consumer complaints management systems are preferred options in many circumstances, since they integrate all three components. But just as there is no one “correct” Consumer Complaints Management initiative, so too there is no single approach to developing Consumer Complaints Management initiatives.

Developing comprehensive Consumer Complaints Management systems requires a step-by-step approach and, likely, more resources than creating a single preventive measure. Similarly, developing an internal complaints-handling process is likely to be quite different from creating a new system of mediation or arbitration, introducing an external ombudsman, or creating a new decision-making tribunal. By the same token, the process for developing Consumer Complaints Management programs for single firms may be considerably less elaborate and formal than that for larger and more complex multifirm initiatives. The eight-step process set out below is a “one-size-fits-all” approach, describing the full range of questions and factors to consider when designing Consumer Complaints Management initiatives. There are aspects of the process that do not likely apply to smaller and less comprehensive Consumer Complaints Management initiatives. For this reason, a short checklist of elements of successful complaints management initiatives within firms is also provided, following the eight-step model. Then, some general tips and suggestions and a number of sources for more detailed help are provided.

An Eight-step Model for Developing Consumer Complaints Management Initiatives

Step One: Define Problem and Gather Information

What problem is the Consumer Complaints Management initiative intended to address? Is there baseline data pertaining to the needs and concerns of consumers on which to draw? What are the objectives of the Consumer Complaints Management initiative, and does everyone agree with them? Finding common ground on the problems being addressed and the objectives of the initiative is essential to moving ahead with solutions. Industry Canada’s Office of Consumer Affairs has developed a diagnostic tool to help companies identify problems with complaints handling.
What are the options for resolving the problem, and what are the potential costs, drawbacks and benefits of each solution? Industry Canada’s Office of Consumer Affairs has developed a diagnostic tool to help businesses identify ways of improving refund and exchange policies. There may be value in looking to the experience of merchants in other sectors and jurisdictions.
Have all the people and organizations that could be involved or affected by the Consumer Complaints Management initiative been identified, and have their interests or concerns been taken into account? For example, the views of a cross-section of upper management and rank and file officials within affected organizations, representatives of consumer organizations, and government officials should all be taken into consideration. Clearly, the range of identified individuals will depend on the initiative in question. A single pizza delivery company may not need to directly involve anyone outside the organization when developing a “30 minutes or free” delivery policy, but it would be wise to identify and articulate the interests of the drivers (e.g. the delivery policy should not put drivers at risk).

Step Two: Hold Preliminary Discussions With Major Stakeholders

The objective of this stage is to test the tentative conclusions reached in the information-gathering phase and identify partners willing to help develop the Consumer Complaints Management initiative. Looking beyond like-minded industry colleagues to more broadly affected interests such as consumer group representatives and government officials can help to confirm initial perceptions of the initiative or stimulate useful revisions. Informal bilateral sessions may be appropriate in many situations, and focus groups are also useful for testing new ideas.

Step Three: Create a Working Group

Having the right people on the working group is essential. They should be dependable, credible and knowledgeable, represent the diversity of affected stakeholders, and have the necessary time and resources to commit to the project. Frank discussion should take place at the outset about the group’s objectives, members’ responsibilities, anticipated workloads and outcomes, and the ground rules about how the group will operate (e.g. decision making by consensus, rotating chairs).

Within the organization, an effort should be made to ensure that frontline employees (who will play a major role in implementing the Consumer Complaints Management initiative),managerial staff and key organization leaders are included.

Consumer Complaints Management proponents may wish to explore the feasibility of inviting a government representative to participate in the working group, since relevant government agencies and departments can provide important expertise and advice. Even when they do not agree to participate as working group members, relevant government departments and agencies should be consulted early on in the development of the Consumer Complaints Management initiative.

To ensure that the full range of concerns is heard, it is very useful to invite knowledgeable consumer group representatives to participate in the working group. Consumer groups can provide a wealth of information and valuable perspectives about complaints issues, and their input can give Consumer Complaints Management initiatives additional legitimacy.“[A consumer group] told us things about our own product that we didn’t even know,” said John Tory, President and CEO of Rogers Cable Inc. This has led Rogers to develop new ideas and services.8 Consumer groups and Consumer Complaints Management initiators should work together to maintain the credibility and independence of the participating consumer group. Regular communication with the full consumer group community is also useful. When consumer group representatives are involved, it is strongly recommended that some form of remuneration be offered, such as an honorarium and compensation for travel expenses.

When selecting consumer group representatives, a good fit — both of the group and of the individual within the group — is particularly important. Care must be taken when identifying the right consumer groups and inviting the appropriate representatives within the groups. In this regard, it is recommended that the consumer groups be fully informed of the goals of the Consumer Complaints Management initiative, the development and implementation processes, and the particular roles and responsibilities of the consumer group representative. This ensures mutual understanding, builds trust and sets the groundwork for a good working relationship. Before agreeing to participate, the consumer group representative will likely want to know the following:

whether all the major players are at the table
the views of relevant government agencies on the initiative
the track record of the Consumer Complaints Management proponent for similar initiatives
whether there is commitment from the organization’s leaders
the openness and accessibility of the decision-making process
the roles and responsibilities of all working group participants.

Step Four: Prepare Preliminary Draft and Explore Appropriate Structures

In preparing a preliminary draft of the initiative, working group members will likely identify who (people, organizations and new institutional structures) will be responsible for which aspects of implementation. For example, certain employees may perform key new functions, and a new agency or management structure may be created to help with implementation. Several of the Consumer Complaints Management initiatives discussed in Part One of this Guide are housed in separate non-profit bodies dedicated specifically to complaints management or dispute resolution (e.g. the Canadian Banking Ombudsman, Advertising Standards Canada’s national and regional consumer response councils, and the Cable Television Standards Council). The advantage of such new structures is greater perceived and real independence from other aspects of the organization’s activities. The credibility of complaints handling and dispute resolution decisions is likely to increase when decision makers are seen to be at arm’s length from the organization’s other activities and officials.

In other situations, ad hoc use of neutral third-party mediators or arbitrators may be sufficient (e.g. as used by the Better Business Bureau). In such situations, there needs to be criteria for assessing the expertise of the third parties. Creation of new structures and use of new parties to help with complaints handling may involve considerable expense, which should be factored into design considerations from the outset.

Step Five: Consult With Stakeholders

The working group draft of the initiative should be considered a point of departure. Thorough consultations concerning the draft with all interested parties will help prevent problems later. One good approach is to work outward, from those most likely to be directly affected to those less likely to know about the initiative.

For industry-wide initiatives, once the working group has agreed to a draft, it should invite, using a public announcement in appropriate media, comments from anyone interested, allowing a reasonable time for comments to be returned. Direct solicitation of comments from known interested parties is also advised. A consultation plan can be useful. It should include roles for high-profile officials with good communications skills to explain the Consumer Complaints Management initiative and receive feedback. Typically, this feedback would go to the working group, which would then discuss how and to what extent the final draft would reflect the comments.

Step Six: Announce and Publicize the Initiative

As mentioned earlier, a Consumer Complaints Management initiative that is not adequately publicized has little chance of succeeding. Participating merchants (including managers and employees), consumers and governments all need to know what the initiative is and how it affects them. A good communications plan is important. It should identify who must be made aware of the Consumer Complaints Management initiative, who should receive a copy of its terms, and how the individuals and groups will be reached. The communications activities might include an awareness campaign addressing such matters as the use of a logo, publicity endeavours such as advertising and speeches, pamphlets, and a notice that firms and organizations can display on their premises. There must be adequate funding to ensure that these communications activities are properly carried out.

Step Seven: Implement the Initiative

The following are essential elements of effective implementation.

Adequate financing. When there is not sufficient funding, a Consumer Complaints Management initiative risks being nothing more than words on paper, potentially frustrating consumers and bringing the reputation of firms into disrepute. The salaries of complaints-handling specialists, communications budgets, payment of consumer group representatives’ expenses, and costs associated with operating new decision-making bodies need to be taken into account from the outset. Possible self-financing levies (e.g. paying dispute resolution experts on a per use basis) need also to be carefully worked out before the program is launched.

Phased-in implementation. There may be value in implementing the initiative in phases. For example, a program might operate only in certain jurisdictions at first, or apply only to certain types of transactions. Alternatively, the program could initially operate on a “pilot” (limited term) basis. The advantage of the phased-in approach is that it allows administrators to test the viability and practicality of a program, and make appropriate adjustments before unveiling a full and comprehensive initiative.

Ongoing communications initiatives. In addition to initial communications activities, there need to be regular information updates — quarterly, bi-annually or annually — to tell affected parties how the program is working and about any changes in operation or other developments.

Step Eight: Monitor, Review and Improve the Initiative

Regular monitoring, review and continual improvement of program terms and operation should be designed into Consumer Complaints Management initiatives from the outset. When and how often the monitoring and reviews take place should be based in part on how long it will take to generate data on effects and objectives achieved. To measure the impact of a Consumer Complaints Management initiative, data is needed on the situation prior to the Consumer Complaints Management initiative being launched (i.e. baseline data) and at frequent intervals thereafter. This data can be used not only to determine weaknesses in Consumer Complaints Management initiative design and operation, but also to demonstrate results. The Cable Television Standards Council, for example, does a random callback of consumers who have had problems to find out how well the process worked. The Canadian Motor Vehicle Arbitration Plan (CAMVAP) uses an independent survey firm to collect and interpret information from all clients concerning its dispute resolution system. Such processes provide vital feedback to the organization, so it can understand where systemic problems lie and how they may be corrected.

It may be useful to model the review methodology after the initial development process. An independent third party who conducts parts or all of the assessment can provide a more detached perspective and perhaps lend more credibility to the process. For example, every five years, CAMVAP hires an independent consultant to thoroughly review its operations.

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