Solve a complaint and win a loyal customer
Written by Shirley Lichti for The Record, January 19, 2005

You may remember the line from the 1970 movie, Love Story - "Love means never having to say you're sorry." Well, when it comes to customer service and complaint handling, saying "I'm sorry" can make all the difference to disgruntled customers.

Studies have proven that effective complaint handling is one of the top five drivers of brand loyalty. And yet for all the money spent on trying to understand customers and make them happy, an increasing number of people report being extremely upset about the way their complaints were handled.

Customer Care Measurement & Consulting in Virginia, together with Arizona State University, conducted the 2004 National Customer Rage Survey. The results were presented at a services marketing conference I attended in Phoenix last November.

The researchers referenced a 1976 study conducted for the White House by the Technical Assistance Research Program (TARP) as their benchmark. In the TARP study, 32 per cent of those surveyed indicated that they had experienced a serious problem during the past year. In the 2004 study, this number rose to 43 per cent.

This is clearly a jump in the wrong direction, even more remarkable in light of all the investments made in automated telephone response systems and call centres over the last three decades. Last year, North American companies spent $1.75 billion in software to help manage relationships with their customers.

All this begs the question, "Why do we have more problems today than in 1976?" You might suspect quality problems but, as the researchers discovered, both product and service quality have improved.

One factor behind the increase is that households own more products and use more services. In 1976, most homes had one telephone, one TV, one car, and one bathroom. Today homes have multiple phones, TVs, cars, VCRs, DVDs, and personal computers, increasing the likelihood that one of them will fail.

As well, the complexity of the products and services we use has increased. Compare the number of features on your phone in 1976 versus today. How many of you still can't program your VCR, let alone master the computer technology in your car? It's enough to make anyone cranky.

But the most important reason for dissatisfaction is linked to increased customer expectations. What customers really want is to be treated fairly.

This doesn't seem unreasonable. Yet respondents in the 2004 survey said it took an average of 4.3 interactions with a company to get a problem resolved. The researchers called this phenomenon "ping-ponging."

And let's face it, if you have to contact a company four or more times, how happy are you likely to be when the problem finally gets resolved?

In some cases, ping-ponging can be avoided. No one likes to disappoint a customer, but if you know the answer is going to be "No," it's better to say it right up front. Don't drag it out and make the customer get back to you while you "check into it."

Respondents also cited the time it took to resolve complaints. Only 11 per cent were resolved within 24 hours, 15 per cent took one to seven days, 19 per cent took more than 28 days and 46 per cent of complainants said their problems were still outstanding months later.

For situations that were resolved, 56 per cent of respondents felt they got nothing as a result of their complaint.

In all likelihood, even if the company did give them something, if it takes 4.3 interactions over a month, customers probably feel as if they get nothing.

The study found that most complainants didn't want free products or services as compensation. What they really wanted was an explanation (23% of respondents), an apology (25%), a chance to vent their frustrations (38%), and some assurance that the problem won't happen again (17%.)

By the way, all of these things cost your company nothing - all are non-monetary remedies. However, ongoing customer service training may be needed to help staff respond to customers appropriately.

Effective complaint handling practices produce brand loyalty, high return on investment and increased profitability, yet most complaints are poorly handled.

Perhaps companies that fail in this area are overcomplicating matters with unnecessary policies and procedures when a fair approach and a simple apology would suffice.

No matter how your company approaches customer service, one thing is clear - the moral of the 2004 National Customer Rage Study is "Do it right or don't do it."

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