Department of Accounting

Learning Module

Competence: Process Customers’ Complaint

Module Title: Processing Customers’ Complaint

LO 1: Review and analyze customer feedback

1.1.Handling customer feedback

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Customer feedback is the single most important type of communication an organization can receive. It is
confirmation of the organization’s purpose in life and its ability to deliver on this purpose. Feedback can
ultimately determine whether the organization lives or dies. Despite the highly critical nature of
customer feedback, organizations often treat customer feedback as an afterthought, something that
they might get around to, if time allows. The processes for gathering and using feedback must be moved
to the forefront of the organization’s strategy. It’s not optional. Let’s take an inventory of the issues
organizations should focus on as they develop and improve their customer feedback process.

1.2. Unsolicited customer feedback is a rare gift

Organizations that solely rely on unsolicited customer feedback are fooling themselves. They think
customers will reach out and provide feedback without being asked, but that happens once in a blue
moon. Fewer than 5 percent of customers who have a strong opinion about a product will take the time
to communicate their opinions on their own. This is the case for positive and negative opinions. You’ll be
in the dark unless you solicit feedback.

Even when feedback is solicited, many customers still don’t feel compelled to respond. Think about the
surveys, questionnaires and comment cards that you’ve received from suppliers.

The first two imperatives related to customer feedback:

1. You must reach out to the customer in a proactive manner and solicit feedback. Waiting for the
customer to contact you is a fool’s game.
2. Your tools for capturing feedback must be simple and streamlined, or they’ll be ignored.

1.3. Customer feedback is a leading indicator

A leading indicator is a measure that tells us the future. Customer feedback is a leading indicator
because it reveals whether customers are likely to continue doing business with us in the weeks, months
and years ahead. Leading indicators are important because we can use them to gauge the direction of
our enterprise and make critical decisions.

Leading indicators are rare in business management, and most organizations use lagging indicators—
the opposite of leading indicators to gauge their direction. Lagging indicators reveal what has already
happened, and organizations are full of them:

Fundamentals of Effective Customer Feedback

1. Don’t wait for customers to contact you. Reach out to the customer and ask how you’re doing.
2. Keep your tools for capturing customer feedback as simple and streamlined as possible.

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3. Remember that customer feedback is a leading indicator, unlike most other indicators that
businesses use. That’s why customer feedback is so important to an organization’s success.
4. Take action quickly. The informational value of customer feedback doesn’t last long.
5. Utilize lean tools that can be applied all the time by a variety of people. Don’t make capturing and
analyzing customer feedback an event that only happens every now and then.
6. Share the trends of customer feedback with the entire organization. The more people understand
customers’ perceptions, the better prepared they’ll be to help improve them. Everybody in the
organization can affect customer satisfaction positively.
7. Follow-through on customer feedback. If you don’t take action—and follow through to completion—
then the process will produce nothing.

1.4. Customer feedback has a short shelf life

Shelf life is a concept that people often relate to food items, but the concept is also applicable to
customer feedback. Feedback is nothing more than information, but it’ll go bad faster than a ripe
peach. If you don’t analyze and act on customer feedback quickly, its value will diminish to almost
nothing within months. You may use it or lose it.

The short shelf life of customer feedback is one of the best reasons for utilizing simple tools for
capturing and analyzing customers’ perceptions. The more complex the tools, the more time will
elapse before you take action. Some organizations spend so much time and effort capturing and
  analyzing feedback that they never take action. They exhaust their time and interest, and in the end
they do nothing.

The essence of customer feedback includes:

 To know what customers are thinking about you, your service, and your competitors

 To measure and improve your performance

 To turn your strongest areas into market differentiators

 To turn weaknesses into developmental opportunities—before someone else does

 To develop internal communications tools to let everyone know how they are doing

 To demonstrate your commitment to quality and your customers

Assignment Questions

1) Customer feedback has a short shelf life. What it mean? 4pts

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 2) What are fundamentals of effective customer feedback? 7pts

3) Briefly describe customer feedback! 2pts

LO 2: Identify customer service complaints

2.1. Managing customer complaints

When a customer contacts your company to complain about a product or service received, it can be a
blessing in disguise. For every person who complains, there can be hundreds who do not bother to
complain but who also spread negative comments about your company.

In situations where customer complaints occur, the complaint must be dealt with immediately and the
cause of the complaint rectified. Some companies are not concerned with quality and often ignore
complaints or deal with them dishonestly. Seeking customer satisfaction benefits a company in the long
run.

2.2. Dealing with complaints

When the customer pays for a product or service, it is assumed that the product will work correctly or
that the service received is as promised. Ideally, the customer will be satisfied, and there will be no
complaints.

If there is a problem and the customer complains about it, your company should quickly answer the
complaint and solve the customer's problem. This is often done through your company's customer
service activity. But also, you need to follow up and improve your business processes to rectify the
problem.

2.3. Solve the problem

You need to immediately answer the complaint and solve the problem. It may be to give money back,
exchange a product or do some repair.

2.4. Special bonus

To make sure the customer is completely satisfied; some companies will provide some special service or
a reduced price on another product. This is done to assure the customer will come back for more
business. Many retail stores have a generous return policy to satisfy dissatisfied customers.

2.5. Dishonest customers

Unfortunately, there are dishonest customers who will make false claims to get some bonus. Some
people will use a product or piece of clothing and then return it, saying they weren't satisfied.

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2.6. Price in customer service

When a company sells a product or a service, part of the pricing should include the cost of servicing a
certain percentage of defective products or complaints.

2.7. Rectify problem

The second thing a company should do upon receiving a complaint is to seek to rectify the problem.

Although a company hopes not to get complaints, they often can be blessing in disguise. Sometimes
problems can be caught and fixed before they cause serious negative feedback or even legal problems.

It is in the company's best interest to solve any problems and try to make sure that they don't happen
again. It is foolish for a company not to use customer complaints to initiate a corrective action.

2.8. Not dealing with complaints

Businesses that don't bother about satisfying their customers usually get more customer complaints.
Answering them can, of course, cost the company money. Some companies will try to mollify angry
customers but many don't even bother.

2.9. Making money off complaints

One software company holds weekly staff meetings to build morale and allow for status reports from
each department. One part of their meetings is the report on how many customer problems they
rectified the past week. If the number increased, the group was given praise.

2.10. Apology mollifies customer

A company that responds and apologizes mollifies the complaining customer. But some of these
companies never rectify the problem, like the hotel in the above story. The act of responding to the
customer and apologizing is good business. Not fixing the problem is risky, though, and may backfire on
the company.

Benefits of satisfying customer complaints

There are numerous benefits for a company to properly deal with customer complaints.

a) Making Satisfied customer

First of all, it will help to satisfy the customer, so you will get repeat business or referrals. In fact, in
some cases, effectively dealing with a customer complaint can lead to a more loyal customer than others
who may not complain or have problems.

b) Rectifying problems

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Another benefit of dealing with complaints is that you can see weaknesses in your process or products
that can be rectified. This will prevent possible future complaints or problems down the line. It is an
effective form of customer feedback, although one you hope to eliminate.

c) Majoring concern about complaints

For every formal complaint you receive, there may be 10 other customers who were dissatisfied and
who felt like complaining, but who never did. Instead, they change brands and tell their friends of the
dissatisfaction. It is said that an unhappy customer will tell 13 people about his or her dissatisfaction 1.
That is not the type of word-of-mouth advertising you want.

Note

Quickly and properly solving customer complaints can help your business grow and prosper. Ignoring
complaints or dealing with them in a dishonest manner can result in loss of business or even lawsuits.

Managing customer complaints is a vital, internal process influencing customer perceptions and the
attitudes of your staff. Pay attention to complaints and you can improve customer satisfaction for the
better.

Use the following checklists to improve customer satisfaction.

1. Focus on the complaint

Read the complaint with an open and appreciative mind. Complaints are an opportunity to fix problems
and prevent them from re-occurring to improve customer satisfaction.
Identify the “value dimension” your customer is complaining about. A value dimension is that aspect of
the service interaction your customer truly values, but which has been under-delivered or unfulfilled.

Value dimensions are always positive, often the opposite of your customer’s complaint. For example, if
they complain about slow response, the value dimension is speed.
If they complain about rude staff, the value dimension is respect, courtesy and staff attitude.

2. Focus on the company

Connect with those inside your organization who can make improvements in the identified value
dimensions. This may be people responsible for procedures, staff development, etc.
Study the complaint with your team and determine what should be changed or improved to prevent
repetition. Confirm who will make the changes required to improve customer satisfaction. Be clear
about who will do what and by when. Track customer complaints in this value dimension over time.

3. Focus on the customer

Assess the impact of this problem on your customer. Has your customer been severely pained or is the
impact minor? Is your customer cool, or hot and ready to explode?
Plan the actions needed to set things right for this customer. Express empathy and apologize. Give an

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explanation of what will be improved inside the company. Prepare specific positive actions. Include a
generous gesture of goodwill to demonstrate your appreciation and improve customer satisfaction.

 The following are some key areas to providing good customer service.

 Location - Do your customers find it easy to visit you, if a physical store, is it

conveniently located with good access?

 The right quality products - Not only should you measure the quality of the service that
you provide but you should check that the products and services that you market are
what the customer wants and closely match their expectations.

 Communication - Do you make it easy for the customer to communicate with you?
When a customer telephones is the phone answered promptly; are enquiries about
products or services properly handled?

 Speed and attention - No matter what the business, the majority of customers will want
to be dealt with quickly but attentively. Are you doing everything you can to avoid
delays?

 Value for money - Cheap or expensive is not always a good measure, value of money is.
Do your customers equate your business with value for money, if not, why not?

 Demographics and Specific issues - Take the opportunity to profile your customers, for
example where do they live and what is their age group? The more you try to
understand your customers the better you will be able to target your business.

Assignment Question Two:

1) What are benefits of customer satisfaction? 3pts

2) What are checklists that used to improve customer satisfaction? 3pts

3) Describe key areas to good customer service! 12pts

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 LO 3: Establish effective regular communication with
customers

3.1. Definition of Communication

Communication with customers should take place at three levels. First, there is some essential
communication about orders. Second, you will need some ongoing sales promotion with the
objective of getting more orders. This includes responding to requests from customers for new
samples. Third, there will be general information and news which either customers might need or
like to know, or which you might want to obtain from them. For the most part, this communication
will take place by correspondence.
Note: Communication is part of the service which you must offer your customers, and the
quality of your service is as important as the quality of your products. Communication breeds
confidence in a relationship between two businesses in different countries; confidence can be
destroyed if communication is lacking.

3.2. Techniques of building trust with customers

 Remember...you're in the PEOPLE WORK business not the paper work business.
 Make your customers (shoppers) feel important. They're essential to your business.
 Greet every person that walks through your doors immediately. Make strangers feel as
welcome as regular customers.
 Say "How may I help you?" or "How may I be of service?" rather than "Can I help
you?"...Or even worse..."Did you want some help?"
 The customer always comes first when it comes to your job priorities. A customer takes

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 precedence over talking to other employees, arranging the lot or paperwork.
 Don't talk "shop" business in front of customers. Don't take or make personal phone calls
when you're serving a customer or when customers are in the immediate area. Don't talk
around or over the top of customer's heads.
 Accompany people to the right area or department rather than merely pointing and
saying "It's over there."
 When speaking to anyone about credit problems or any difficulty, politely take them
away from the area of other customers to speak with them in a non-public area.
 Use more creative wording than the tired phrase "Have a nice day!" Be more than a robot
with your speech.
 Make the leaving as pleasant as the greeting. Always say "Thank you. Please come back
and see us again." or "We appreciate your business."
 Send Thank-You notes for purchases and future business.
 Ask that they call you if everything did not meet their satisfaction. You want them to tell
you, not 10 other people.

 Make follow-up calls after the sale. Answer any unanswered questions. This is the time
you can correct any problems.
 Put on your "customer glasses." Look at all aspects of your business front the perspective
your customer sees. What can you do to improve it?
 Be easily accessible for those with physical limitations.

Assignment Three:
1) What communication mean? 2pts
2) How one business venture build trust with customers? 15pts

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