Complaint Management Excellence

Creating Customer Loyalty through Service Recovery

Sarah Cook

• Publisher: Kogan Page
• Year: 2012
• Print ISBN: 9780749465308
• eBook ISBN: 9780749465315
• Edition: 1
• Topic: Business
• Subtopic: Business Communication
• Index: Business

Across the global economy, customers' expectations are continually rising - but many companies fail to deliver against those expectations. With the rise in social media, customers are becoming more vocal in expressing any dissatisfaction, which can both lose existing customers and alienate potential new ones. Complaint Management Excellence provides practical advice, tools and techniques for managers to adopt when managing any complaints that come into their organisation. In order to arrive at a culture where complaints are welcomed, the underlying values, processes, structure, strategy and people within an organization all need to be aligned with, and respect, customer needs. Not only does this improve the long-terms prospects for the company itself, but can have a tremendous knock-on effect in terms of boosting employee morale and engagement. With case studies from companies as diverse as John Lewis, Waitrose, DHL, Hilton Hotels, the Starwood group (including Four Seasons and Ritz Carlton hotels) and BT, Complaint Management Excellence explains what customers are really looking for when they make a complaint, how to avoid conflict and how managers can lead culture change to ensure the best experience for all customers and clients.

01

Complaints as opportunities

Welcome to Complaint Management Excellence.

In this first chapter I set out:

• the social, technological, political and economic factors that are changing customer expectations of the service they experience;

• how this is impacting on customer satisfaction and the complaints customers make to organizations;

• why complaints are important to organizations, and the risks associated with handling complaints badly;

• why best-practice organizations view complaints as an opportunity for improvement.

The chapter ends with some questions to help you assess how well your organization views complaints as an opportunity to improve the products and services it provides to customers.

Increasing customer expectations

The number of complaints is on the rise across the globe as customers are no longer prepared to put up with poor service. Undoubtedly businesses in the 21st century are now more focused on the need to deliver an excellent customer experience, yet many do not welcome complaints or encourage their employees to see them as opportunities for improvement. They view complaints as an unnecessary evil rather than an incentive to learn and improve as a business.

I certainly could not begin talking about complaints without focusing on customers and the trends that impact on their expectations of the service they receive.

Today’s customer is far more informed and vocal than when I first started in the customer-service industry over 20 years ago. Then, customer service as a profession was in its infancy. Power lay with large manufacturing companies who dominated the marketplace and who were chiefly concerned with satisfying their distributors. The focus was on business to business (B2B) rather than business to the consumer.

In the intervening years, the way we live and our expectations as customers have changed dramatically. Today is a much faster-moving society where customers are better informed, more knowledgeable and better travelled. Globalization has led to greater choice for customers. As marketplaces have become more sophisticated, there has been a growth in service industries rather than in manufacturing in many parts of the world. For example, according to the Office for National Statistics, in the UK manufacturing industry accounted for 40 per cent of jobs in post-war Britain, compared with 8 per cent today.

In Western society, increasing economic pressures mean that today’s consumers seek excellent service as well as value for money. In emerging markets such as Brazil and India there is a growing middle class who are attracted to brands that offer good-quality service. In countries such as China and Russia, there is strong demand for luxury consumer goods and the levels of service that are expected of these. As a consequence, many more organizations are aware of the need to deliver an outstanding customer experience.

Service organizations such as retailer Nordstrom and low-cost carrier Southwest Airlines, both based in the United States, were at the vanguard of a sea-change in how organizations viewed their customers. These companies developed a culture of customer excellence that transformed the way businesses thought and interacted with their customers. Management gurus, starting with Tom Peters, encouraged a generation of business leaders to aim to differentiate their companies from their competitors via the quality of service they provided. Professors Heskett, Sasser and Schlesinger’s book The Service Profit Chain, published in 1997, established the link between high levels of employee satisfaction and engagement and great customer service.

Today, countries such as Singapore, the UK, the Netherlands, the United States and Canada have sophisticated customer-service industries that operate in mature marketplaces. Customer service in these countries is typically aimed at retaining customers and preventing churn. In the UK for example, customer contact centres are now the norm when dealing with customers in the banking, telecommunications, retail, IT and insurance industries. Contact centres employ approximately 4 per cent of the UK workforce.

Customer service in countries such as Turkey, South Africa and Russia is focused on building relationships with customers, whereas in emerging markets such as Brazil, Peru, China and India customer service is aimed at acquiring new customers.

The power of the customer

Not only has the structure of business changed, but in recent years customers have become more empowered. No longer prepared to accept poor service, power now increasingly lies with the consumer.

There are a number of reasons for this, some of which I have touched on above:

• Today we live in a fast-moving society where people are time and attention poor.

• There is more competition in the marketplace and therefore more consumer choice.

• De-regulation and in some cases government regulation have opened up marketplaces to more competition and greater customer empowerment.

• The economic climate, particularly in the Western hemisphere, has led to a greater emphasis on cost and value for money, driving down prices and increasing the need for high-quality service in order to differentiate.

• People are more travelled and better informed.

• There is increasing demand for international brands and corresponding service experience.

In addition, one of the biggest influencers is the rapid growth of social media.

Social media

‘Word of click’ is now becoming more powerful than ‘word of mouth’. Increasingly people throughout the globe are using the internet, and the voice of the consumer has more power than that of today’s organizations. In March 2011 Internet World Stats claimed that 31 per cent of the world’s population use the internet. This figure varies from 78 per cent penetration in North America to 11 per cent in Africa. In the year 2010–11, there was a 480 per cent increase overall in its use. The internet has been adopted worldwide faster than any other modern invention such as the telephone or television. Sites such as Facebook, Twitter and LinkedIn have grown in popularity and have been instrumental in social change.

But it is not laptops, tablets and PCs that are being used most to access the internet; research by mobiThinking.com shows that half a billion people accessed the internet using mobile phones in 2010. Seventy-seven per cent of the world’s population owned mobile phones in 2010 and there were 5.3 billion subscribers. The Japanese are the world’s most sophisticated mobile users while China has the fastest growing usage.

By 2016 application-to-person messaging (A2P) is expected to overtake person-to-person SMS. This will include offers from retailers and updates from banks as well as m-payments. It is estimated that between 500 million and 1 billion people will access financial services by mobile phone (tap-and-go) in the next five years to make payments and transfers. In China alone, it is estimated there will be 169 million users of tap-and-go payments in 2013. M-ticketing for airline, rail and bus travel, festivals, cinemas and sports events will become the norm.

Generation Ys, the people born between 1977 and 1994 as well as Generation Zs (those born after 1995) have an inseparable connection to technology, and this is spilling over into older generations. New communication channels are altering customers’ expectations about service. Internet-based social networking is giving customers a vehicle for spreading good and bad news at the click of a mouse. The effect of the rise in access to social media is that the customers of today and the future are more likely to trust their peers than the organizations from which they buy products and services. Aggregator sites such as TripAdvisor, Amazon and eBay, which constantly provide customer feedback, are examples of how customers can shape future purchasing choices. Jeff Bezoz of Amazon.com is quoted as saying: ‘If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the internet, they can each tell 6,000 friends.’

Delivering excellent service

One organization that has taken account of trends in customer service to deliver beyond expectations is Zappos. Zappos is an online shoe retailer in the United States that has won outstanding acclaim from its customers for the level of service it provides. It is also ranked in the top three most admired companies for its customer experience by customer-service professionals (along with Apple and Amazon). Founded in 1999, within 10 years it had a turnover of $1bn and was ranked by Fortune magazine as 23rd on its list of the best companies to work for.

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Table of contents

• Cover
• Title page
• Imprint
• Table of contents
• List of figures and tables
• Preface
• About the author
• 1. Complaints as opportunities
• 2. Encouraging dissatisfied customers to voice their complaints
• 3. What people look for when they complain
• 4. Customer-management strategy and its implementation
• 5. Communication styles and emotional intelligence
• 6. The skills and behaviours needed for dealing effectively with complaints
• 7. Recording and thoroughly investigating complaints
• 8. Conciliation, mediation and arbitration
• 9. Making improvements as a result of complaints
• 10. Creating an environment that promotes high performance
• 11. Complaint handling and culture change
• Appendix: How customer-centric is your business?
• References
• Index
• Full imprint