Recent research on customer complaints

Society of Consumer Affairs Professionals

What's Hot in

Contemporary Complaints Handling

Professor Francis Buttle © 2009


Journal of Marketing

European Journal of Marketing

International Journal of Service Industry Management

Journal of Consumer Marketing

Advances in Consumer Research

Journal of Marketing Management

International Journal of Operations and Production Management

International Review of Retail Distribution and Consumer Research

Managing Service Quality

Quality Assurance

Quality Management in Health Care

Marketing Management Journal

Journal of the Academy of Marketing Science

Journal of Health Care Compliance

Source materials


Customer complaints

Complaintsmanagement

Business case

Customer

retention

Business performance

Stockvaluation

Mechanistic

OrganicOrganizational culture

Individual differences

SexPersonalit

y

Customer experience

Justice

Emotions

Rage

Customer contact staff

Francis’smind map


Customer complaints

Complaints management

Business case

Customer

retention


Stockvaluation

Mechanistic



SexPersonalit

y

Customer experience

Justice

Emotions

Rage



Business Case for Complaints Management

– Journal of Marketing• Stock valuation

– European Journal of Marketing• Customer retention

– International Journal of Service Industry Management• Business performance


Journal of Marketing

– Examines the simultaneous effects of customer satisfaction and customer complaints on stock value gap

• Stock value gap is the gap between a company’s stock valuation and that of the best-in-class competitor

– Uses real-world data about the airline industry• American Customer Satisfaction Index• US Department of Transport• Center for Research in Security Prices• 288 data points: 9 airlines x 8 years x 4 quarters


Journal of Marketing hypotheses:

1. The higher the customer satisfaction for an airline, the smaller the SVG

2. Customer complaint has a stronger effect than customer satisfaction on the SVG


Journal of Marketing hypotheses:

1. The higher the customer satisfaction for an airline, the smaller the SVG SUPPORTED

2. Customer complaint has a stronger effect than customer satisfaction on the SVG SUPPORTED

Managerial recommendations

1. Build a customer equity dashboard that measures both satisfaction and complaint

2. Focus on resolving and learning from complaints, not just building satisfaction



– Asks what drives excellent customer retention?

– Examines influence of 4 factors• a documented complaints-handling process, • a customer retention plan, • a customer retention budget, and• an executive in charge of customer retention

– Uses Australian survey• Dun & Bradstreet sample• 170 participants



Results– Only one of the 4 variables has a statistically significant

relationship with excellent customer retention performance: the presence of a documented complaints-handling process.

Managerial recommendations– Implement a documented complaint-handling process– Consider ISO 10002 as a framework



Customer satisfactio

n

Process improveme

nt

Complaint processes

Complaint culture

Employee attitude

Employee retention

Financial performanc

e

Customer retention

Uses self-report data from a sample of UK companies participating in a benchmarking study



Customer satisfactio

n

Process improveme

nt

Complaint processes

Complaint culture

Employee attitude

Employee retention

Financial performanc

e

Customer retention

0.74

0.58

0.75 0.65

0.84

0.75

0.67

0.90

0.41



Conclusions– There is a statistically significant association between

complaints handling culture and processes, and business performance

– Process improvements and employee retention are more strongly associated with business performance than customer retention

Managerial recommendations– Ensure organizational learning from complaints data

• Data collection, analytics and reporting– Make complaints processes staff-friendly


Customer complaints


Business case

Customer

retention


Stockvaluation

Mechanistic



SexPersonalit

y

Customer experience

Justice

Emotions

Rage



Which approach to complaint-handling has the more significant effect on customer satisfaction and loyalty?

USA; B2B and B2C

110 corporate participants, mail questionnaire focus on mechanistic/organic approach to complaint handling

550 customer participants (5 complainants per company), telephone questionnaire focus on satisfaction and loyalty

Mechanistic Formalized and clear process guidelines

Organic Supportive internal environment

Organic or mechanistic?


Results– The mechanistic approach has the stronger total impact on

satisfaction and loyalty than the organic approach– A combined approach – both mechanistic and organic - has

even more powerful effects– The mechanistic approach works better in B2C contexts than

B2B

Managerial recommendations– Build a culture that values customer complaints– Develop formalized processes to capture, resolve and learn

from customer complaints

Organic or mechanistic?


Customer complaints


Business case

Customer

retention


Stockvaluation

Mechanistic



SexPersonalit

y

Customer experience

Justice

Emotions

Rage



Sex– Do women have a higher PTC more than men?

Personality traits– Do people high in Machiavellianism have a higher PTC to

complain than lows?• the use of amoral, manipulative, methods to get one’s own way, even at the

expense of others

– Do risk-takers have a higher PTC to than the risk-averse?• a willingness to take action when the desired outcome is not assured

Do individual differences influence propensity to complain (PTC)?


Sex– Do women have a higher PTC more than men? YES

• Women file relatively more medical malpractice claims• Women complain relatively more about advertising

Personality traits– Do people high in Machiavellianism have a higher PTC to

complain than lows? YES• the use of amoral, manipulative, methods to get one’s own way, even at the

expense of others

– Do risk-takers have a higher PTC to than the risk-averse? YES• a willingness to take action when the desired outcome is not assured

Do individual differences influence propensity to complain (PTC)?


Customer complaints


Business case

Customer

retention


Stockvaluation

Mechanistic



SexPersonalit

y

Customer experience

Justice

Emotions

Rage



Justice seeking

– Distributive justice• Complainants want fair and reasonable redress

– Procedural justice• Complainants want the complaint-handling process to be fair

– Interactional justice• Complainants want to be treated with courtesy and respect


Emotions

POSITIVE NEGATIVE

Delighted Enraged

Attentive Fearful

In a good mood Angry

Joyful Upset

Active Distressed

Pleased Irritated

Happy Annoyed

Excited Sad

Proud Downhearted


Customer complaintexperience

Justice perceptions

Emotional response

Customer experience


Customer rage

is furious, overwhelming, extreme anger accompanied with expressions (physical, verbal, non-verbal, displaced) and potentially harmful behaviours towards an organization following a dissatisfactory customerexperience.


Customer rage emotional clusters– Rancorous rage: disgust, scorn, contempt, resentment– Retaliatory rage: ferocity, malice, fury, rage, wrath

Customer rage expressions– Verbal rage: shouting, screaming, yelling– Physical rage: punching, slapping, stabbing, killing– Displaced rage: kicking furnishings, breaking equipment– Non-verbal rage: rolling eyes, puffing cheeks, red face– Constructive rage: offering advice or solutions

Customer rage behaviours– Exit behaviour: stop buying, boycott, – Revenge behaviour: vandalism, sabotage– WOM behaviour: tells friends, report to management, eWOM


Customer complaints


Business case

Customer

retention


Stockvaluation

Mechanistic



SexPersonalit

y

Customer experience

Justice

Emotions

Rage



Four major points to take away

1. The business case for handling complaints is very strong

2. Excellent complaints-handling processes supported by a supportive culture yields the best return

3. People who interact with complainants must be prepared for emotional as well as rational customer behaviour

4. The customer is not always right


Four Five major points to take away

1. The business case for handling complaints is very strong

2. Excellent complaints-handling processes supported by a supportive culture yields the best return

3. People who interact with complainants must be prepared for emotional as well as rational customer behaviour

4. The customer is not always right

5. You’ll never be able to make a Machiavellian, risk-taking woman happy.


Thank you

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Recent research on customer complaints

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