When we have a problem with something, we tell someone about it. We talk about companies that have overcharged us, provided poor service or who have rude employees. Research shows that people who have a problem are likely to tell eight to ten people about it.
There are organisations that welcome complaints because complaints are customer feedback which can be used to improve service performance/reduce cost, thus improving the bottom line. They make it easy for customers to complain even encourage complaints, and then they set things right and make changes so that future customers do not experience similar problems.
Effectively handling customers with problems is critical. When customers complain and they are satisfied with the way their complaint is handled, they are more likely to purchase another product or service from the same organisation.
Organisation that resolve complaints on the first contact increase customer satisfaction and product loyalty, improve employee satisfaction, and reduce costs.
By making it easy for customers to complain, more customers will come with their problems, giving greater opportunity to correct the service delivery or production processes.
Customer complaints also represent valuable information about recurrent problems. They can point the way to understanding the root causes of customer problems and help an organization target core processes that need improvement.
If acted upon to improve core processes, customer complaints can be a source of information that can reduce costs as well as improve services.
Customers who get their problems satisfactorily and quickly solved tell their friends and neighbours, and they are not easily won over by the competition.
Studies have shown that handling customer complaints well can be a critical part of a turnaround strategy.
There is a bottom-line concern for government as well. Complaints can be costly. Repeated hand-offs increase costs and waste precious resources. When complaints are not promptly resolved, frustrated customers seek redress in different agencies or at different parts or levels of the same agency, resulting in duplicate effort and compounding costs.
Just as costs compound when there is a poor complaint system, trust also erodes as citizens become frustrated with a non-responsive bureaucracy. Indeed, there has been a cumulative erosion of public confidence in government.
There are many factors contributing to this decline in trust and confidence, particularly the huge volume of regulations that did not make sense to the public and the high cost of government.
Today, most companies strive to exceed the expectations of their customers with problems. A study carried out in USA by Federal Benchmarking Consortium on Best Practices in Resolving Customer Complaints, way back in 1996 found that some best-in-business practices were found in government organizations that have practices that rival the best in the private sector.
The study the best companies used similar approaches to handling complaints. They are:
- Train and empower their front-line employees to resolve most complaints during the first contact.
- Make it easy for customers to complain through the extensive use of centralized customer help-lines, 1-800 numbers, complaint/comment cards at the point of service, and easy-to-use customer appeal processes.
- Enter complaint data in fully automated and integrated information systems, and analyze and use data to identify and fix root causes of dissatisfaction and to determine future directions for product and service improvements. By centrally collecting the data, at the headquarters level, this valuable information can be incorporated into the strategic planning process, assuring future competitiveness.
- Consider complaints as customer feedback and opportunities to improve, alongside other measures of customer satisfaction.
- Use various organizational arrangements, but have important similarities, such as seeking to maximize resolution at first point of contact and dedicating a cross functional team to collect and analyze data and report complaint information to top management.
- Credit their overall success, at least in part, to a pending organizational crisis, normally related to their survival or significant loss of revenue.
Performance-focused culture also must be cultivated. Organizational vision, values, goals and objectives must reach all the way down to the front line. Customer and quality concerns are always being the emphasis and complaints are viewed as an opportunity to improve rather than an indictment of performance.