"We all need people who will give us feedback. That's how we improve." Bill Gates

1. COMPLAINT AS A GIFT
www.humanikaconsulting.com

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Overview of presentation
• What is a Complaint?
• Why do customers complain?
• How is a complaint a gift?
• Impact of Management’s view of
complaints handling
• Complaints handling in a global
environment
• What can be achieved with a
“Complaint is a gift” strategy- looking
at complaints differently

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What is a Complaint?
• AS ISO 10002 Customer satisfaction – Guidelines
for complaints handling in organizations defines
a complaint as –
• “An expression of dissatisfaction made to an
organization, related to its products (services),
or the complaints-handling process itself, where
a response or resolution is explicitly or implicitly
expected”
• Complaints are golden opportunities. (Cheng,
2000) Strategic Customer Management

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Complaint cases
• Traffic delay
• Air-conditioning problem in a hotel
• Poor meal quality and service
• Unsatisfactory hygiene environment
• Impolite salesman
Context: Hotel, restaurant, coach, shop

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Why do customers complain?
Their expectations have not been met!

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Why is it necessary to understand your customers and their needs?
• 68% of customers will leave because of a
bad service experience
• It costs five times more to acquire a new
customer than to keep an existing one
• To bring in more or keep customers
• Know which area to improve and how
Examples: Sundays, Wing On Travel....

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Recipient’s normal reaction to complaints
• Ignore complaints
• Defensiveness
• Anger
• Concern re loss of trade, reputation
• Annoyance, time consuming, rectification costs
• Hindrance- wish they would just go away!
• Not believe some or all of what the customer
was saying
• These reactions are as a result of “negative
attribution” – blame is being attributed to us or
our business. A complaint is evidence that, in the
customer’s view, we have not met their
expectations.

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Customer’s manner
• Lack Gracious Social skills to communicate
• Nervous
• Harsh, one sided
• Emotional
• Lack understanding of commercial/regulatory
limitations
• Rude
• Unreasonable complainant

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Complaint deterrent techniques
• Apology only, no rectification
• Blame
• Promise but don’t deliver
• No response
• Rudeness
• Pass on to another department
• Customer Interrogation

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How could complaints be gifts?
Underlying Principles
1. There are 2 Levels of messages embodied in
complaints
2. The customer has 2 separate needs when
complaining-needs as individuals and needs
relating to the complaint
3. The benefits of Customer recovery far
outweigh the cost of losing a customer or
attracting another customer
4. The majority of customers are honest

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1. Two levels of messages in Complaints
• Example 1
• Surface message – product is not
working as expected
• Underlying message – I don’t
understand the new technology, I
need help
• Example 2
• Surface message- I am disappointed
with the service during my last
visit/purchasing experience
• Underlying message – I am testing
the value of my loyalty to your
business

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2. Customer’s needs when they complain
• Needs as individuals
• To be heard
• To be understood
• To be respected
• Needs relating to the complaint
• To have their concern dealt with quickly,
fairly and properly
• To be given what they have been denied
and perhaps an apology
• To have action taken to fix a problem or
address a concern- a resultant process
change

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3. Benefits of Customer Recovery
• Only 4% of dissatisfied customers complain. 96%
leave without any communication to business
• Of the 96% who leave, 91% will never return
• A typical dissatisfied customer will tell 8 to 10
people about the issues with your business-
significantly more in global communications
• 1 in 5 dissatisfied customers will tell 20 people
about the issues with your business
• It takes 12 positive service incidents to make up
for one negative incident

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3. Benefits of Customer Recovery (cont’d)
• 7 out of 10 complaining customers will do business again
with you if resolve the complaint in their favour
• Of complaining customers, 95% will do business with you
again if you resolve the complaint at the first contact
• On average, a satisfied complainer will tell 5 people
about their problem and how it was solved
• It costs 6 times more to attract new customers than it
does to retain current ones
• Customer loyalty is worth 10 times the price of a single
purchase
• “How to win and Keep Customers” – Michael LeBoeuf

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4. The majority of customers are honest
• 1-4% of customers systematically
cheat businesses
• If complaining customers are treated
with suspicion or rudeness, customers
will take a defensive position

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The Gift
“If a customer is
complaining, you are
being given a chance to
retain that customer”

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5 Principles of Complaint Handling: T.R.U.S.T.
• T: Trustworthy
• taking responsibility and ownership in rendering reliable services at a high
professional and ethical standard.
• R: Respect
• to make the customers feel that they are important, being valued to the
organization
• U: Understanding
• to be able to see things from the customer’s point of views and awareness of
the customer’s feelings
• S: Sensitivity
• awareness of the customer’s needs as well as verbal and non-verbal clues in
order to maintain an assertive communication
• T: Timeliness
• to act promptly without delay and follow through the complaint to customer’s
satisfaction
Complaint is actually a good thing!

19. 7A’s Model for Complaint Handling

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Complaint Handling Steps: Emotion First
Skills Explanation
Acceptance
Apology
Empathy
- Use a positive tone to show your competence and commitment
to offer assistance
- Do NOT take complaint personally; think positive (“complaint is
actually a good thing”)
- Use customer’s name throughout the complaint handling process
- The act of apology is to show respect rather than (≠) to admit
that we are wrong
- Sincere apology for the “inconvenience” caused to the customer
- Empathize with the customer’s feeling
- Show understanding and willingness to offer assistance

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Complaint Handling Steps: Problem solving second
Skills Explanation
Analysis
Alternative
solution
Agreement
- Always handle one complain issue at a time
- Avoid bias and unnecessary assumptions
- Listen without interruption
- Ask questions to gather information and to clarify
understanding
- Suggest feasible solutions – not false hope – within your
authority
- Think of another alternative if it is not acceptable to the
customer
- Confirm the solution is acceptable

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Complaint Handling Steps: Positive ending
Skills Explanation
Assurance - Show our genuine concern and sincerity
- Express willingness to help in future
- Thanks for the customer’s complaints / business

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Unwrapping The Gift
• Free direct communication from customer about
service failures, competitors offerings-no survey costs
• Readily available market research-Complaints define
what customers want
• Opportunity to increase customer trust
• Opportunity to build long term relationships-
customers will re-purchase if they believe complaints
are welcomed
• Opportunity to rectify service failures
• Opportunity of engaging customers as advocates

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Engaging Customer as your Advocate
• Customers becoming your advocates is
based upon “reciprocity” principle –
humans like to return favours
• When businesses handle customer
complaints in a respectful way and a
token of atonement is offered beyond
their expectation, customers are likely
to reciprocate with positive advocacy
• Token of atonement can be financial,
but can also be an apology,
acknowledgement of making a
difference- recognition of their value

25. Effective Customer Service Steps
1. Know your product: study and learn as much as you
can about your products
2. Reach out: greet each customer who appears to need
help, respond politely, enthusiastically, and knowledgeably to
questions and needs. Complete the interaction by inviting the
customer to return and let you know how s/he liked the
product.
3. Be alert: Learn to read facial expressions and body
language in order to sense when the customer needs help.
4. Get help fast: if you don't have an answer- know how
to quickly get help from the experienced people in your
market who do have the knowledge.

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What are the elements of “Complaint is a gift” strategy (1)
• Complaints Policy and guidelines
based on “complaint welcoming”
culture
• Complaints data base to maximize
complaints capture
• Complaint handling training, including
empathy and conflict handling
training- front line staff and induction
training
• Target response and resolution times
• Regular complaints reporting

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What are the elements of “Complaint is a gift” strategy (2)
• Clearly defined Escalation path for
difficult complaints
• Specialist Complaints case managers
• Customer Surveys
• Continuous improvement focus
• Unreasonable Complainant conduct
management guidelines (demands,
persistence, lack of co-operation,
arguments, behavior)
• Complaints Analysis- root cause analysis

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Practical Implementation of Gift
Strategy
• Thank customer for contacting you
• Explain why feedback is appreciated
• Apologize for service failure
• Take responsibility and make
commitment to customer to do all
you can to rectify situation
• Collect all information from customer
• Correct or facilitate correction of
service failure as promptly as possible
• Check customer satisfaction
• Prevent future service failures of this
type-root cause analysis (5 whys,
causal factor tree analysis etc)

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Impact of Management view of
Complaints Handling
• Customer Charter set by
management- includes complaints
handling
• Focus on complaints “welcoming”
not reduction of complaints
• Culture, Complaints Handling
guidelines/policy, KPIs, reporting,
escalation path for complaints
• Management set mandate for staff re
customer recovery, give
confidence/framework
• Mindset of staff is easily sensed by
customer

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What can be achieved from a “Complaint is a Gift” strategy
• Improved Customer Experience
• Access to valuable source of knowledge- at no cost
• Knowledge of most common service failures
• Increased customer trust and loyalty
• Opportunity to partner with customer as advocate
• Opportunity to strengthen service quality
management
• Increased satisfaction for complaints handling staff

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Application of Gift Strategy
• Can be applied to large corporations, individual departments, small
businesses, monopoly businesses, government departments or
government owned corporations
• Comment re monopoly/ businesses – equally important – focus is on
improved customer experience, improving complaint handling staff
experience, achieving best practice, reducing external ombudsman costs

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Using “Complaint is a gift” knowledge as a Complainant
• Be clear and specific in describing what you
are complaining about
• Be respectful
• Describe the impact and what you are
expecting as a resolution
• Make suggestions re improvements
• Give the business a chance to rectify the
issue and retain your business
• See your complaint as a gift

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SUMMARY
• Complaints are packages with 2 levels of
messages waiting to be unpackaged
• Complaints are given freely
• Businesses can use the gifts in different
ways- correction of immediate and
systemic issues through direct
communication of unmet expectations
• Complaints give businesses opportunities
to retain customer’s business and loyalty

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A question to ponder
Putting yourself in the customer’s seat ,
what is your preference –
Would you rather be dealing with a business
that ignores complaints or with a business
that welcomes complaints and sees them
as a gift – a powerful source of
information ?
Let your response to this question be the
driver for your approach in managing
complaints for your business.

36. Learning and Giving for Better Indonesia