"Manage Complaints to Enhance Loyalty"
Quality Progress
February 2006, pp. 28-34
Providing facts and data from over 20 years of research, the author of this article identifies five key aspects of effective complaint management:
- Soliciting and satisfying a complaint usually results in a 50% increase in loyalty vs. the unarticulated complaint
- Moving a complainant from dissatisfied to completely satisfied raises loyalty 30 to 50% and produces significant word of mouth-the source of 20 to 75% of all new customers
- Many problems leading to complaints can be prevented via proactive customer education and empowering frontline staff
- Any effective Voice of the Customer process can identify problem prevention opportunities that can reduce overall service expense by 10 to 15%
- Loyalty can be further enhanced by identifying inexpensive "delighters" (such as education on avoidance of problems, information on new services of interest, or just a friendly 90 second human interaction), which can be implemented during the complaint and general customer service process
Four best practices in complaint handling are also identified in the article:
- Aggressively solicit complaints via multiple channels
- Improve the effectiveness of your complaint-handling process to ensure almost all complaints are satisfied in a profitable manner when the value of the customer is taken into account
- Prevent problems and complaints by proactively telling customers how to avoid unpleasant surprises and problems
- Identify the inexpensive actions that delight customers. Evaluate the relative cost and impact of each action to determine which should be systematically implemented
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