Complaint Management.pdf

Customer Relationship management (MKT 2207) Handling customer complaints and managing service recovery (Lesson 12) Maduka Udunuwara Senior Lecturer Department of Marketing Fa...

Customer Relationship management (MKT 2207) Handling customer complaints and managing service recovery (Lesson 12) Maduka Udunuwara Senior Lecturer Department of Marketing Faculty of Management and Finance University of Colombo  Meaning of complaint Express dissatisfaction Announce that one is suffering form an ailment Make a mournful sound, grumble, moan etc..  Customer satisfaction formula Doing the job right the first time Effective complaint handling These two leads to increased customer satisfaction. Customer complaint management Complaint management is the process of handling, managing, responding to, and reporting customer grievances. This process requires a streamlined approach and constant monitoring to ensure faster resolutions. Nowadays, customers approach you from everywhere, so you need complaint tracking software with multichannel capabilities to respond quicker to their queries.  Types of customer problems Long Wait on Hold If your team works in a call center, Average Time on Hold (ATH) is one of your most important call center metrics. Customers want fast answers and can't afford to spend their afternoon with a phone glued to their ear. In fact, studies show that after about two minutes, customers are likely to hang up the phone and 34% of those customers won't call back. That means you can potentially lose a third of your customer base just because you didn't pick up the phone fast enough.  Factors influencing complaining behaviour The level of dissatisfaction Personal importance of the service The cost of complaining (e.g. time, anxiety involved in complaining) The benefits to be gained from complaining Resources available for making the complaint Access to means of registering the complaint Who is to blame for the problem Demographic factors Strategies to reduce customer complaint barriers  How to prevent customers from switching Collect data on customer failure points Identify root causes of failure Establishing prevent solutions – Redesigning service processes – Implementing technical solutions – Educate customers – Encourage customer citizenship, where customers help each other)  Service recovery Involves actions taken by the organization to put things right for the customer It involves: Identifying service complaints (conduct research, monitor complaints, develop complaints as opportunity culture) Resolve complaints effectively (develop systems and training in complaints handling) Learn form the recovery experience (conduct root cause analysis) Perceived fairness of service recovery  Justice theory Procedural justice- Its about fairness of the policies, and rules that comprise the complaining procedure that the customer has to go through. How do consumer evaluate procedural justice Assuming responsibility for the failure Speed and convenience of the process Firm follow up to see that the complaint has been properly resolved Flexibility in applying policies Customers having some control over the process  Interactional justice-Concern the behaviour of the firm’s representatives during the complaint resolution process. Key elements Honest and open communication Politeness Genuine concern and honesty Providing explanation for the initial failure Putting efforts into resolving the problem  Outcome and distributive justice- Customer expectation to be compensated for their loss when a service fails. e.g. refunds, credits, correction charges, replacements, apologies.  Service guarantees Force firms to focus on what customers want Set clear standards Highlight cost of service failures Help firm identify and overcome fail points Reduce the risk of purchase decision and build long-term loyalty How to design a service guarantee Unconditional Easy to understand and communicate Meaningful to the customer Easy to invoke Easy to collect on Credible  Types of guarantees Single attribute-specific guarantee Explicit minimum performance standard on one important attribute is guaranteed (e.g., delivery by noon the next day) Multi-attribute-specific guarantee Explicit minimum performance standard on a few important attributes is guaranteed Full satisfaction guarantee All service aspects are guaranteed to be delivered to the full satisfaction of the customer with no exceptions or conditions attached  Case Studies Summary of the Complaint Mr. D cancelled TV and internet services with his provider. However, the service provider continued to bill him after cancellation, with the first two months’ charges being automatically billed to his credit card. Mr. D called his service provider to dispute the charges and the provider confirmed that the services had been cancelled. The provider stopped automatically billing the customer’s credit card, but continued to issue invoices for the cancelled services for the next four months. The service provider even threatened to send the customer’s account to a collection agency. Mr. D filed a complaint with the CCTS, seeking to have the two months’ charges refunded and all the other invoiced charges waived. What did the CCTS do? The CCTS contacted the service provider, which confirmed that Mr. D had indeed cancelled his services. The CCTS also confirmed that the service provider had continued to bill the customer for six months following the cancellation, including the two months automatically charged to his credit card. The provider explained that the invoices being issued was the result of a system error. Outcome The service provider offered Mr. D an explanation and apology, assuring him that his account would not go to a collection agency. Mr. D was refunded for the two months charged to his credit card, had the other four months’ charges cancelled and received an additional $50 credit as a goodwill gesture. Mr. D considered this a reasonable resolution and the matter was resolved. Summary of the Complaint Mr. C called his service provider to inquire about available loyalty promotions related to his wireless service. He was informed that a promotion would be available to him the following month, in which he would receive 10 GB of data for $60/month. The agent provided Mr. C with a code to use when he called back the following month. When the customer called back, he was told that no such promotion existed and that there was no record of his previous call. Mr. C filed a complaint with the CCTS, seeking to have the offer honoured. What did the CCTS do? The service provider told the CCTS that there was no plan offering 10 GB of data for $60 per month, adding that the code the customer received was from an older promotion from a few years earlier. The provider also indicated that no record of a call about this promotion existed. The CCTS persisted in its demand for the call recording, and the provider did eventually locate it. The recording corroborated Mr. C’s account of the events, with the agent clearly offering a loyalty plan that included 10 GB of data for $60 per month. Outcome It was clear that the service provider had made this offer to the customer. However, the provider was unable to provide the customer with the promised promotion for system reasons. In order to respect the commitment made to Mr. C., the provider offered to make a payment to him as compensation. Mr. C. accepted the offer and the file was closed.  Developing an effective service recovery process Top management commitment Develop complains as opportunities Training and empowerment Ownership of the complaint Service recovery tactics - Act fast - Apologies but don’t be defensive - Show you understand the problem from the customers perspective - Don’t argue with the customer - Acknowledge the customers feelings - Give customer the benefit of the doubt - Clarify the steps need to resolve the problem - Keep customer informed of the progress - Consider compensation - Preserve to regain customer goodwill  HW Conduct a web search of customer complaint handling software.