COMPLAINT HANDLING. Principles of Good Complaint Handling

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1 COMPLAINT HANDLING Principles of Good Complaint Handling Promoting good complaint handling is a key part of your work if you receive complaints from time to time. Good complaint handling can turn aggrieved customers (or staff) into loyal ones. Within any industry, those companies with a positive philosophy and a reputation for fair complaint-management have a competitive edge. A management philosophy that embraces customer satisfaction as a primary goal of business, instead of defending the company in the face of complaints, can change the rules of the game for companies. It shifts the emphasis from the cost of pleasing a customer to the value of doing so, and trusts front-line employees to use their judgment. Good complaint handling is a key element of good administration and there are some key principles to good complaint handling. They are: Getting it right Being customer focused Being open and accountable Acting fairly and proportionately Putting things right Seeking continuous improvement Experience shows that consumers who complain about products and services continue to frequent the businesses and buy the products they complain about if they believe the complaint was resolved fairly. Research into complaint behaviour reveals that only a fraction of dissatisfied consumers complain to business s and, thereby, give the company an opportunity to correct the problem. There is evidence that some consumers do not complain because they are sceptical about business's willingness or ability to

2 resolve disputes fairly. Consumers simply withdraw their patronage and criticize the company or the product to others. Such findings underscore the importance to your organisation of a complaint management system that is well-publicised and easily accessible. An unregistered complaint may do as much harm as one that is mismanaged or not resolved. What is the cost of negative word-of-mouth from dissatisfied customers? Complaints and complaint trends tell business how to do its job better by alerting management to problems that need prompt attention and correction. Furthermore, they indicate long-range opportunities for product innovation and problem prevention. A well-planned system for screening and recording complaint data can provide business owners and managers answers to such important questions as the following: Are products "oversold" or "over advertised?" Is advertising clearly understood? Are salespeople overzealous? Do product disclosures (such as labels, product information, warranty information and service agreements) need to be improved? Are user's manuals clear, complete and easy-to-read? Would changing warranty coverage reduce complaints? Are there opportunities for product improvements or better quality control? Are there indications of safety defects that should be reported and corrected, or that justify a recall? To get this valuable feedback, complaint-reporting must generate information swiftly and systematically to the appropriate managers or departments. Initial screening should trigger immediate action, when necessary, and statistical summaries should identify trends and long-range courses of action. Complaint managers need to be patient, articulate, and able to balance fairly the interests of the organisation with those of the consumer. They also should be able to communicate legitimate consumer complaints to management to help determine whether there is a need for changes in company policies or procedures. All members of a complaint-management department should be familiar with the operations of the company and with its products and services. Training can strengthen communications skills and heighten staff's awareness of the special needs of consumers from different cultural, economic or educational backgrounds. Also, complaint-management staff should be familiar with

3 consumer protection laws and with the operations of third-party disputeresolution mechanisms to which particularly difficult complaints may need to be referred. Steps for effective complaint management 1. Define where you will receive complaints and who will receive them and publicise this. 2. Develop a system for record keeping of complaints and monitoring them. 3. Process and record the complaints log them, categorise them and assign them to be dealt with. 4. Acknowledge the complaint to the complainant and make the response personal not a mechanised response. 5. Investigate and analyse the complaint in a fair way and record it. 6. Resolve it in a consistent way, follow your organisations policy and keep the customer informed 7. Follow up ask them if they are happy with the procedure. 8. Periodically review complaint reports, summarise your findings and develop recommendation to improve. Empathy and trust will diffuse conflict and allow you to handle complaints effectively Empathy and trust improve relationships and communication, complaint handling, customer retention, and help to diffuse misunderstanding or even conflict. Empathy and trust are essential to understand others positions, develop solutions, win and retain business, and avoiding conflict (prevention is better than cure). These days we need to be more effective communicators to be successful in business - and in life. Hard sales do not build relationship with customers, understanding and trust do, hard selling over the years has created resentment and miss-trust, which makes building trust with customers even more important. One-sided persuasion is not sustainable and is often insulting, especially when handling complaints. Trust and empathy are far more important in achieving and sustaining successful personal and business relationships. The essence of empathy is really understanding the other person's position and feelings. Being able to 'step back', and achieve a detachment from our own emotions, is essential for effective, constructive relationships.

4 Part of the 'empathy process' is establishing trust and rapport. Creating trust and rapport helps us to have sensible 'adult' discussions. Establishing trust is about listening and understanding - not necessarily agreeing (which is different - sympathy) - to the other person. It is listening without judging. To listen empathically you need to understand how the other person is feeling, what is going on beneath the words they are expressing, are they annoyed, angry, excited, nervous, frustrated etc. Once you understand how they feel you can then relay this understanding back to them I can see you are frustrated, this builds trust and rapport. It is difficult and rarely appropriate to try to persuade another person to do what we want; they will end up doing what they want anyway, instead we must understand what the other person wants, and then try to help them achieve it, which often includes helping them to see the way to do it. This will build trust. Listening Of all the communications skills, listening is arguably the one which makes the biggest difference. It is also the most difficult to put into practice, most of us have had years of trying to influence people by persuading them rather than listening to them. Think about it from your perspective, how do you react when someone tries to persuade you. How would you feel if they listened to your complaint. Even the best speakers in the world can become unstuck by never listening, have you ever heard of anyone being accused of listening too much? What about talking or saying too much? Listening does not come naturally to most people, so we need to work hard at it; to stop ourselves 'jumping in' and giving our opinions. Mostly, people don't listen - they just take turns to speak - we all tend to be more interested in announcing our own views and experiences than really listening and understanding others. But we all like to be listened to and understood. If you listen to and really understand the customer (or staff members) complaint, they will then listen to your view.

5 Handling complaints and customer retention in your organisation The principle of ownership is central to complaints handling: if you receive a complaint or query you continue to own it until it is resolved, even if you get help with it or delegate it. You must always follow-up and check on progress and eventually resolve it to the complainant s satisfaction. The measurement and monitoring of complaints, from receipt to resolution is also vital: the organisation must have suitable systems and processes and commitment to do this, especially from the very top. There is a difference between 'understanding' someone and 'agreeing' with them: everyone in the organisation should have the training, motivation and ability, to understand and to convey that they understand, to see the reality of the customer s position and feelings, whether they are right or wrong, and they should have the training and authority to 'agree' where appropriate, which has implications for authorisation levels and compensation offerings. Seek complaints and feedback: the organisation should welcome complaints and should encourage staff to ask for them - complaints enable quality improvement and ultimately improve relations with customers (the vast majority of customers are more loyal after the complaint is resolved satisfactorily than they were before the complaint arose). One of the reasons the Japanese have been so successful in manufacturing, is that they say a complaint, mistake or defect in production as an opportunity to improve, and that is exactly what a complaint is, it is a gift from your customer! A gift in the form of an opportunity for you to improve what you do! Use the 'over-compensation' principle: always look after complaining customers extremely well - generally regardless of whether they are right or wrong. Organisations often begrudge compensating complaining customers, which is completely illogical, because complaints are relatively rare and the real cost of compensation is relatively inexpensive, and yet the benefits from customer satisfaction, increased loyalty and positive word-of-mouth, are enormous by comparison. Trust and rapport training to improve customer service Here are some pointers as to how you can develop empathy skills for customer service staff, especially in situations where customer retention is a strong priority (and it should be for most businesses as it costs much more to find new customers than keep the ones you ve got).

6 Explore all the wrong ways things have been done, both in your organisation and experiences staff have had outside the organisation, how people for example have reacted when being persuaded into something. Then discuss and identify good rapport-establishing phrases, questions and then practice and demonstrate suitable tone. Style must be highly sympathetic and interested (the tendency is for tone to be confrontational, competitive, challenging, etc, which makes matters worse). Use a training exercise to identify suitable empathic information-gathering questions - what do we need to know in order to help, how to ask for this information, and how to position the need to ask questions in the first place, once initial rapport has been established. Use a training exercise to identify approaches, and ' ready-made' phrases, to view customers' situations objectively with the customers - 'let's look at this together and see what the options are...' - rather than the tendency to go headto-head and counter the customer's position with superior argument, justification, or worse still implied or direct threat, such as penalties, etc. (It's easy to fall into the confrontation trap because so much sales training and experience is based on the power of persuasion, which is in itself can be highly confrontational in defensive scenarios.) The secret to customer retention is the relationship in the first few seconds - customers are far more likely to rethink and stay if they 'like' the person on the other end of the phone. Certainly a customer will not begin to reconsider if they 'dislike' the other person - instead they become empowered to accelerate and reinforce withdrawal from the moment they feel the slightest bit challenged or opposed. Trust, rapport, empathy and understanding are powerful relationship-builders, and form the bedrock of sustainable business and careers. Call now to discuss complain handling training for your organisation, so you routinely turn complaints into loyal customers, call us now on We can also help you create a customer complaint policy, procedure and system.