"6 Ways to Benefit from Customer Complaints"

Natalia Scriabina and Sergiy Fomichov

Quality Progress

September 2005, pp. 49-54

The authors of this article argue that the handling of customer complaints is a major area that can be a source of competitive advantage in the service market. They identify six practical approaches that can improve business performance through more effective complaint handling:

1. Handle complaints as opportunities—Complaints can be seen as "problems" or "opportunities". Labeling as a "problem" can lead to the complaint being viewed with defensiveness and blaming. Seeing a complaint as an "opportunity" allows the company to get maximum benefit from the feedback. The authors recommend that senior management endorse this attitude and make sure that all employees understand it.
2. Encourage customers to express dissatisfaction—Customers who do not complain often just go to competitors in the future. A dissatisfied customer often tells 10 or more other people about their negative experience. It costs 5-6 times more to attract new customers than to keep old ones...However, 90 percent of customers whose complaints are effectively resolved do not defect. Therefore, it is very cost-effective to state publicly that complaints are welcome, to publicize information on how to complain, and to make it as easy as possible to lodge a complaint.
3. Consider the customer's perspective—The complaint-handling process should focus on customers' needs. Some ways to do this are to acknowledge complaints; give complainants a timeframe for response and keep them informed; do not charge or penalize the complainant; use plain language, and provide for multiple languages or customer special needs (such as disabilities).
4. Establish documentation and maintain records—Documented policies and procedures have been shown to reduce errors by 48% and improve performance by 37%.
5. Train employees—Managers must be trained to develop effective complaint handling policies and procedures. Customer staff must be trained in how to effectively use complaint handling procedures.
6. Adhere to world-class best practices—Included in the ISO standards is a standard titled "Quality Management-Customer Satisfaction-Guidelines for Complaints Handling in Organizations".

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