Complaint Management: The Heart of CRM

Citation

Dietz, J. (2006), "Complaint Management: The Heart of CRM", Journal of Consumer Marketing, Vol. 23 No. 1, pp. 50-51. https://doi.org/10.1108/07363760610641181

This book is a must read for all CEOs, financial managers, and customer service managers in corporate anywhere. As someone who has spent 25 years in sales and management and the past ten teaching marketing, the importance of the information that Stauss and Seidel lay out in this book cannot be minimized. It continues to amaze me that companies put their futures at risk by improperly managing and/or responding to complaints. This book is important because it lays bare the inadequacies of many current complaint management programs, it offers excellent tools to get on the right track, and it places proper emphasis on total customer orientation.

The book points out how often customer concerns are mangled:

Many firms make it difficult for their customers to register complaints with them … and the costs of complaint processing and problem solving for the firm are higher than they would have been had the firm reacted earlier (p. 1).

The authors point out that a balance has to be sought in spending resources on strategy and customer satisfaction. The tone is set with comments such as “anyone who has recognized customer orientation as a pre‐requisite for the long‐term survival of the firm and takes customer satisfaction seriously will regard complaints not primarily as a problem to be warded off, but rather as an opportunity, and complaint management as the core of a customer‐oriented strategy”(p. 2), and “the analysis of complaints is an important tool for quality improvement, but many companies overlook the value of this material” (p. 12).

The book offers many tools to aid in quantifying and putting a customer management program into practice. Because complaints “contain concrete descriptions of problems and suggestions for solutions, they often furnish much more valuable clues for the formulation of improvement possibilities than do the results of customer satisfaction surveys, which are mostly presented as relatively abstract average‐scaled values” (p. 12). The first chapter alone contains models of the following:

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  customer relationship management (p. 11);

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  process‐based quality management systems (p. 13); and

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  Baldrige criteria for performance excellence framework: a systems perspective (p. 15).

Models, templates and checklists continue throughout the 16 chapters. In fact, if it is necessary just to read a few chapters, the reader will take away enough usable help to make it worth the time spent. From “aspects that influence the desire to complain” (p. 23) to “factors influencing the choice of centralized, decentralized, and dual complaint management” (p. 250), the authors cover the area of managing and learning from customer complaints in depth.

In addition to models, the authors offer many excellent examples of these principles in action. McDonald's, long known for their consistency, supports its franchisees in Munich (Germany, pp. 256‐257) with a full complaint management program so that chances the customer will not be handled well are minimized. In addition, there is an excellent example of a complaint satisfaction questionnaire (p. 148). Of course, these are available in other places, but this book puts all the relevant tools in one place.

The importance of total customer orientation is acknowledged in the steady march of the book toward the realization by corporations that “complaints don't lead to greater cost” (p. 19). The answers to “who does what, when, and in what order” (p. 73) lie in a blueprint that revolves around objective quality standards for customer acquisition, maintenance, and growth. In a world where outsourcing commands plenty of space in the business press, Stauss and Seidel do not mince words when they say:

The responsibility for dissatisfied customers and the responsibility for the professional steering of the complaint‐management process as a whole … cannot be delegated externally under any circumstances (p. 273).

With so many IT solutions to customer relationship management on the market, it is important that “the general guideline for … a software system of active complaint management should be shaped by functional, economic and IT considerations – in this order – regardless of whether a ‘pure’ complaint management or an integrated CRM project is chosen” (p. 277). The book does point out conflicts between productivity standards and satisfactory handling of customer complaints; it also suggests quality standards for complaint processing and timely reaction (p. 158).

Chapter 13, “Human resource aspects of complaint management”, acknowledges, “experience has proved over and over again that the occurrence of an error in the core performance is not assessed as being overly negative if employees behave appropriately” (p. 228). In a book that centers on the effects of poor customer complaint handling, it is appropriate that the proper emphasis be given to the hiring of appropriately skilled people:

The basic idea is that customer satisfaction can be re‐established especially quickly when the first contact person has the ability and expertise to solve the problem without having to call in a supervisor. Customers should be spared the experience of having to deal with employees who claim not to be responsible and being referred to other people without recognizing an immediate effort to handle the case (p. 244).

Enough said. Hire the right people, train them, give them the tools to maximize their effectiveness, and focus everything the company does on satisfying the customer. This is the essence of the famous “marketing concept” that so many of us teach in the classroom.

In addition to CEOs, financial managers, and customer service managers, this book is also important for people in operations, who need to know how their part of the company affects customer satisfaction and complaint handling. Everyone, even those who do not come in direct contact with customers, impacts the effectiveness of a complaint management system. Although this book, with 310 pages and 16 chapters, takes a good bit of concentration, it is worth the effort to master the contents. Make sure your glasses are good because the charts are in very small type, but Complaint Management is several books and seminars rolled into one effective manual that holds important points in very chapter. If only corporate America (and the world) put these lessons to work, customer satisfaction levels and long‐term customer loyalty would be contributing more to the bottom line.