Complaints are good for business

BY Australian Retailers Association
27 May 2019

How local retailers can mitigate the financial burden of political and economic disruption by using digital networks.

Looking for some free customer feedback and insights to inspire your sales and marketing initiatives? Wondering how to increase your staff retention levels? Need to improve your products or services? Then look no further than your customer relations department and immerse yourself in complaints data where a wealth of value awaits. 

It seems counter-intuitive, but customer complaints are actually good for business. Why might this be? Because they provide insights into consumer behaviour and the factors influencing brand loyalty and repurchase. Customer complaints should therefore be actively encouraged and valued. By using complaints data, organisations can make informed improvements on  products and services, make strategic decisions in relation to staff training and take steps to prevent dissatisfaction. All of these activities actually increase staff satisfaction and retention levels. Let’s face it – who doesn’t want to work in a culture where mistakes and errors are treated as genuine opportunities for learning and improvement? This is exactly why you should utilise customer complaints.

Complaints management principles, are largely understood and embraced by corporations and customer service professionals. Basic level compliance with complaints standards are  demonstrated by the existence of systems and procedures to capture and analyse  complaints together with staff training programs.

However, at a practical level, there are significant hurdles that prevent organisations from accessing the real benefit of complaints data. These include unreliable data collection methods, lack of clarity or consistency over the definition of ‘complaint’, outdated Customer Relationship Management (CRM) systems that don’t capture much data at all, and issues arising from the outsourcing of complaints to offshore operations. The number of channels for customer complaints is also a factor influencing data collection and analysis.

How should complaints be assessed and measured in order to get value from customer relations initiatives? What are the critical things about complaints that organisations should measure and what is the value of collecting complaints data?

Basic data to collect includes the type of complaint, the remedy sought by the complainant, the time taken to resolve the complaint and the level of satisfaction of the complainant at the end of the process. Organisations should also assess the extent of escalation, the impact of escalation, evidence of customer retention and repurchasing behaviour following the complaint, and the processes and services to be improved. Data on the root causes of the problem is essential. These elements can be translated to a complaints story board to back up discussions at team meetings.

Rather than just tracking trends and spikes in complaints data, use data to identify the root causes of customer complaints so that preventative measures can implemented. Using complaints data to reduce the incidence of matters giving rise to complaints is not only a sophisticated approach, it also directly impacts on the bottom line through issue prevention and complaint reduction. Root cause analysis is a team-based approach whereby, complaints data is used in conjunction with other data to analyse the cause of the customer complaint.

Feedback loops are essential but often overlooked. It is important to provide feedback to the front line about the root causes of the issues and the steps that have been taken to prevent the issues from arising again. What was learnt from the complaint? How can the complaint data be utilised? Can this information be shared across the organisation to relevant departments?

Customer complaints can be costly and damaging to brand reputation. Compensation costs, escalation costs, staff retention – all of these should be measured to identify the cost of complaints to the business. Turning negatives into positives through effective complaints handling is beneficial to the brand.  Thoughtful design and use of complaints data capture systems is critical for business success.

Nicole Cullen is the founding director of Cullaborate Pty Ltd and is passionate about taking  customer complaints management to the highest level. An expert in root cause analysis, Nicole provides training and facilitation services for customer relations teams, team managers, auditors and call centres and designs best practice complaints systems and assists organisations to increase customer loyalty through effective complaints handling. Learn more at cullaborate.com.au

 

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ABOUT THE AUTHOR

Australian Retailers Association

Founded in 1903, the Australian Retailers Association (ARA) is Australia’s largest retail association representing Australia’s $310 billion sector, which employs more than 1.2 million people. As the retail industry’s peak representative body, the ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members throughout Australia. For more information, visit www.retail.org.au or call 1300 368 041.

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