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Managing Customer Feedback

World Class Customer Service powered by Continuum™

Managing your customer feedback effectively and enjoying the inevitable business benefits is not a chance occurrence or ‘a piece of good luck’; it’s about being fair to people, fulfilling expectations and delivering ‘what it says on the tin’.

Not rocket science but more about your business managing relationships with people in a respectful and ethical way. Yet a huge proportion of well known organisations across both private and public sectors offer at best a mediocre relationship, even to their key customers.

Customers have long memories for both good and bad service while mediocrity is quickly forgotten.

Soliciting and welcoming customer feedback…

Any expression of a customer’s dissatisfaction is usually an expression of desire to remain as a customer and is a perfect opportunity to assure long term loyalty.

A large number of customer complaints are surely a very bad thing…

An organisation with a high level of customer complaints probably has a more open and responsive culture and is not necessarily experiencing an unusually high level of customer dissatisfaction. Customer complaints openly invited and handled professionally fairly and effectively become a net-positive experience and can totally eliminate any reasons for the customer to defect.

Managing customer feedback effectively will…

• Reduce the risk to reputation linked with badly handled complaints
• Improve customer confidence, satisfaction and ultimately loyalty
• Improve employee satisfaction and retention through empowerment

Isn’t it enough just to comply with current legislation…

Research indicates that even where certain industries and professions are bound by legislation and regulated practices; to gain competitive advantage, organisations need to offer much more than the minimum.

So what can an unhappy customer do?

1. Suffer in silence
2. Defect quietly
3. Tell at least 10 people about their dissatisfaction
4. Publicise their dissatisfaction
5. Discuss their issues with the organisation

What do unhappy customers actually do?

• 96% will take one of the first four actions yet the fifth action has the only potential for a win-win outcome.

Putting in measures – getting back what you put in...

• Resolve the issue at first contact – staff empowerment can reduce the total cost of customer service by 15%.
• As many as 70% of complaints in financial services are escalations of an unresolved minor issue and end up concerning the complaints process itself.
• An increasing numbers of complaints are addressed directly to a Regulator or Ombudsman indicating a reduction of faith in the original vendor.
• 75% of companies do not know why key customers choose to defect.
• Customer service staff in over 90% of companies are unable to articulate why a customer should continue to buy from them.
• Over 90% of customer feedback is lost at the point of sale
• Only 2% of companies have an ongoing customer ‘win-back’ campaign in spite of their customers often receiving a lower service level from the competition.
• 85% of financial services firms make no attempt to analyse loyal customers vs. defecting customers and therefore have no foundation to assess the lifetime value of retained customers against the cost of acquiring new customers.
• Satisfied customers will pay invoices on average 14 days earlier than dissatisfied customers.
• 1% of the customer base can generate 30% of the overall profit margin yet most companies don’t know who these customers are.
• Reducing customer defection by 5% can increase overall profitability by >25%.
• 82% of organisations in the travel & transport industry have no mechanism to capture & analyse the root cause of their customer feedback and therefore have no basis to justify remedial product or process changes.

So, how do we deliver ‘best practice’?

The solution is not prescriptive but instead driven by the will of the business, the culture and the vision for the future. The academics and gurus in the customer service industry have many stories to tell of excellence, improvement, recovery, growth and exemplary attitudes to customer relationships. Why not aspire to becoming one of their case studies?

Examples of best practice are cited by leading practitioners such as The Society of Consumer Affairs Professionals, The Institute of Customer Service and the British Standards Institute.

Charter Continuum™ is the industry-leading customer service solution which will help you to deliver much more than the minimum.

Acknowledgements:
· Professor John Murphy, Manchester Business School
· BSi Global Management Systems: CMS
· QCi – Customer Management ‘State of the Nation’ report 2003
· Institute of Customer Service