We agree we are in the business of delighting our customers. Therefore it is obvious that we ought to put in significant amount of time and resources to understand them and deal with their concerns and inputs. Yet few organizations can truly claim to be competent in obtaining feedbacks from their customers. Even fewer can boast of an effective system of dealing with customer feedbacks.

Obtaining Feedback
Different studies done in various countries have reported that only 4% to 44% of unhappy customers bother to complain. The rest just walked away, never to return. The same studies have also shown that more than 90% of unhappy customers will rate their service providers favorably if their problems and complaints are resolved to their satisfaction. We can infer from the studies that a) not enough customers are giving us feedback which is an invaluable source of input for improvement and strategy formulation and b) the rest of the customers who bother to talk to us are hoping that we can do better so as to allow them to keep coming back.

How can we get more customer inputs? Let’s first look at the reasons why customers do not bother to speak to us after the service has been delivered:

1. Apathy: “Why bother? I have better things to do with my time than filling up the feedback form.”
2. Skepticism: “What’s the use of complaining? Nothing will be done with my complaint.”
3. Fear: “I had better not complained lest they do something nasty behind my back.”

By understanding the motivations behind the lack of feedback, we can now attempt to examine some ways to overcome them and ultimately, be in an enviable position of staying close to our customers:

Enable Front-Line Staff
Front-line personnel are the key listening posts. Many do not go out of the way to obtain feedback because doing so is like shooting themselves in their feet. “If the customer complains, I have to account for it.” We need a “no blame” mindset here. Management needs to assure the front-line staff that feedback is primarily for improvement and not a mean of finger pointing. Employee panels and surveys are used to extract customer perspectives from the customer contact staff.

We can go one step further and actually formalize quantity of customer feedback as a performance measure for the front-line staff. If the target is met, incentives are handed out to the staff. A major departmental store in Singapore has an incentive scheme for its staff in which whoever receives a written compliment will earn a cash incentive.

Increase channels of feedback
We need to make it easier for customers to give us comments. Many customers are uncomfortable complaining to the front-line personnel who tend to be the very source of their problems. Traditional channels include the feedback form found at the contact points and the periodic customer survey carried out directly or through third parties. Enlightened organizations ensure that their senior-management team meets with key customers regularly for more personal and direct contact.

Many organizations today use 1-800 hotlines as a mean for their customers to communicate with them. Many public organizations also assign Quality Managers who are accessible to the public. Websites and Email are alternate channels. There are also external channels like consumer rights groups and newspaper forums where customers can turn to.

Encourage the Customers to Feedback
Many airlines give out gifts to passengers who are invited to complete the feedback forms. I was involved in crafting a feedback scheme in a logistics company that wanted to recognize their front-line couriers. The couriers were asked to solicit as many votes as possible from their direct customers within a period of time. To encourage the customers to vote for the couriers, every vote cast would entitle the voter to enter a lucky draw at the end of the voting period. The voters stood to win various prizes for themselves and their organizations.

Some companies actually report the actions resulting from the feedbacks to their customers. The company newsletter is commonly used to inform customers that their feedbacks are not only taken seriously but also important to the future of company development. The customer is a partner who has a voice in the organization.

Lastly, a “complaint is good” attitude has to be nurtured within the organization. This attitude has to be obvious to external customers who would then be assured that their complaints are received humbly and positively. Customers should be thanked for their inputs, whether positive or negative, at the very least. Senior management, including the CEO, should take the lead to respond to the customers. A letter to the local paper was published recently in which the writer complimented the CEO of Virgin Mobile in Singapore for personally calling him about a complaint he had earlier lodged. The writer was so overawed by this act that the original problem had become secondary.

Handling Feedback
Customer Feedback is invaluable source of improvements and breakthroughs. We need to solicit as many and diverse feedback as possible. Feedback obtained, however, is not an end in itself. The entire value of feedback lies with the handling of such feedback, both positive and negative. Research has shown that up to 95% of customers, who encountered problems with the service provider, responded positively to the provider if the problems were resolved satisfactorily. On the other hand, only close to 90% of customers, who had no problem with the service provider, were satisfied with the provider. This proves the adage “Every problem or challenge presents an opportunity”. Complaints give us a chance to impress our customers. Thus, though feedback includes compliments, this article will focus on complaint handling.

Upon receiving complaints and feedback on service failures, a world-class organization will diligently apply the following 4-step R.I.T.E complaint handling sequence:

Respond:
It is imperative that feedback is responded to promptly. Ritz Carlton has a rule called the 24/48/30. It means 24 hours to acknowledge, 48 hours to assume responsibility and 30 days to solve. A speedy response is vital in sending a message to irate customers that the organization takes them seriously and empathizes with their unhappiness. Even if resolution cannot be immediate, a simple acknowledgement to the customer that the feedback has been received and taken into consideration is necessary.

58% of U.K. employees surveyed expressed dissatisfaction with the level of empowerment given to them to resolve a problem. They also expressed concern about being untrained in complaint handling. These findings surface two keys to better responsiveness:

Customer and Complaint Handling Skills- these skills are trainable. Emotions often run high when service failures occur. A well-trained customer contact staff is able to calm down the customer and respond to the customer empathically and objectively.

Empowerment- we should aim to resolve as many complaints as possible at the earliest possible stage without the need to escalate the matter to higher levels in the organization. A complaint resolved on first contact can increase customer loyalty by 10% as compared to one requiring multiple-contacts. To achieve this end, we need to empower our front-line staff. At British Airways, all employees are authorized to settle complaints up to a value of US$5,000 and have a list of 12 gifts to choose from. While full empowerment is rare, organizations should attempt to move the empowerment limit further forward. Organizations need to let go the fear that their staff will abuse their empowerment authority. The upsides of empowerment risk are significant: faster response time, satisfactory complaint resolution, and higher employee morale.

Investigate:
Complaints and compliments represent learning points. We should discover the root causes of service failures that lead to complaints. Upon knowing and understanding the root causes, we can then make decisions to close the gaps. An ex-boss often reminded me: It is okay to make mistakes, just don’t repeat them. The same principle applies to all excellent organizations.

A common reaction to complaints is to be defensive. Understandably, it is hard to be objective when a negative comment is directed at you. Furthermore, we are resistant to change in the way we do our work. Therefore, it is important for the organization to appoint an objective party to conduct the investigation and determine the remedial steps. Many organizations today employ dedicated Service, Quality or Customer Care staff whose main responsibilities are to talk to affected customers, track service performance, manage the complaint response and resolution process, investigate root causes and create action plans for gap closures. It is common today to have Customer Care or Quality Directors/VPs among the senior management ranks.

The investigation stage should also be time-sensitive so that the risk of repeat mistakes is minimized. There are complicated problems that require investigation before resolution can be complete. We do not want to keep the affected customers waiting too long. Refer to Ritz Carlton’s 24/48/30. An investigation lead-time must be set.

Take Action:
Firstly, we need to close the loop with customers whose problems could not be resolved at first contact and needed investigation. Full resolution should be done at this stage.

Internally, commitment from top management is necessary to ensure that changes needed to improve the service delivery are instituted and monitored. Besides procedural changes, management has to be mindful of the importance to establish buy-in and cascade the learning to all employees. Communication sessions and media have to be in place. The in-house newsletter of Singapore Airlines has a regular section highlighting, not just compliments but also complaints and the learning points from such feedback.

The reward and recognition system needs to be aligned to encourage the desired behaviors. Besides awarding incentive and recognition when a compliment comes in, top management should go direct to the employees responsible and tell them about it. While giving out rewards and recognitions are positive moves, organizations have to be careful not to hand out punishments and disincentives for complaints too liberally. This will serve to discourage employees from reporting customer complaints, taking risks to delight customers and participating in improvement initiatives. Instead, complaints should be pitched as learning opportunities for employees. Only in cases of obvious disregard for customer satisfaction that result in repeat complaints should punitive actions be taken against the employees responsible.

Evaluate:
In this final step, organizations attempt to analyze all customer feedback. Here, we take a step back and look at all feedback collectively in order to spot trends on customer preferences and service fail points. Effective analysis of complaint data might show that certain customer segments complain more than others. This will trigger a need to find out why. Could it be that some customer segments have more difficulties getting access to the organization or could it be that psychological profiles of certain segments mean that these customers prefer to suffer in silence? Having these knowledge allows us to understand our customers better and as a result, be able to further “fail-proof” our business processes against breakdowns.

Singapore Airlines breaks down complaints and compliments by functions along the service chain: reservation, check-in, lounges, in-flight, delay, baggage claim etc. All feedback are collected and analyzed on a regular basis and reported to top management. Number of complaints, compliments and ratio of complaints to compliments are used as key performance indicators. Managers of each function are held accountable to meet targets pertaining to these indicators.

Finally, we also need to measure how well we handle customer feedback. We need to ask customers how they rate us on our service recovery process. We might not be able to fulfill every customer’s wish but we have to be perceived to be fair and competent in the way we deal with every customer’s concern. Questions on complaint handling should be included in customer surveys and focus groups.

A study carried out by Warwick Business School revealed that 53% of examples of outstanding service resulted from complaints handled well. Undoubtedly, if we want to be world-class, we need to be proficient in obtaining and handling customer feedback.

Written By:

George Quek
Director
DistincTions Asia Pte Ltd

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