Complaints & Social Media Gripes

The Customer Complaints Experience Qaalfa Dibeehi, Chief Operating and Consulting Officer Zhecho Dobrev, Consultant Experience Tracker – 2010 www.beyondphilosophy.com

The Beyond Philosophy Perspective Customer Experience Thought leadership is Fourth book launch in is all we do! our differentiator September 2010 Offices in London, Focus on the Atlanta with Partners in Links with emotional side of the Europe & Asia Academia Customer Experience Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 3

The Customer Complaints Experience Qaalfa Dibeehi, Chief Operating and Consulting Officer Zhecho Dobrev, Consultant Experience Tracker – 2010 www.beyondphilosophy.com

The Study Basics • Methodology • Quarterly online survey via online panel • Sample Characteristics • 1015 respondents • 50% USA; 50% UK • Perspective • Action based on a single complaint • “If you have made more than one complaint/ comment please answer the survey with just one in mind” Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 6

When customers have an issue… Something is missing in the experience Customer interacts with company Customer expectations are not met Customer expectations are met Customer tolerates it Customer takes action Customer talks Customer walks Complaints Comments When customers inform the When customers share gripes company directly of issues with others via social media (1:Company) (1:World) Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 7

Customer Interactions and feedback Something is missing in the experience Customer interacts with company Customer expectations are not met Customer expectations are met Only 6% of customers think 38% of organizations state they know organizations know their expectations their customer’s expectations Source: Beyond Philosophy Customer tolerates it Customer takes action Customer Experience Tracker Customer talks Customer walks Complaints Comments When customers inform the When customers share gripes company directly of issues with others via social media (1:Company) (1:World) Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 8

When customers fall through the cracks… Complaints and negative comments in social media occur when customers fall through the cracks in the experience the organization provides. Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 9

When Complaints Go Viral The very dangerous new world of complaints Source: Industry.BNET.com Source: Los Angeles Times.com Original Video can be found on YouTube – Search for “United Breaks Guitars” Source: Newsweek.com Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 10

The Cost/Benefit of Getting Complaints Right • Every customer you keep represents at least 3 that you don’t have to attract. • The cost of acquiring a new customer usually runs from 2-4x the annual cost of keeping an existing one. • It is estimated that defecting customers will tell 8-10 people about their negative experience. One in 5 will tell 20 people (multiply for Social Media and the internet). • Conversely, a referral from a loyal customer has a 92% retention rate versus 68% for a customer acquired from advertising. Source: Bill Bleuel, PhD, Professor of Decision Sciences, Graziadio Business Report Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 11

Poll Does your organization monitor: • Satisfaction with complaint outcomes • Satisfaction with complaints handling • Both • Neither • I don’t know Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 13

Complaints Profile Fig. 1: Complaints by Channel Fig. 2: Complaints by Sector ( the total > 100%) ( total sums to 100%) Source: Beyond Philosophy Customer Experience Tracker (CET) 58% 22% Percent of Complaints Percent of Complaints 48% 36% 15% 13% 12% 10% 8% 7% 7% 4% 1% 4% Leisure Energy Hospi- Trans- Health Utility/ Banks Travel Insur- Retail Other Telco Svcs/ tality/ Email Phone Letter Other SMS ance port/ care Fin. IT/ Fig. 3: Complaint Reason Fig. 4: Complaints Management ( total sums to 100%) Complaint Handling Complaint Outcome 31% Percent of People who Complain 27% 42% Percent of Complaints 23% 23% 20% 19% 19% 17% 13% 15% 13% 9% 9% 8% 7% 5% 1% Treat- Service Product Service Missed Highly Highly Other Price Policy ment Dissatisfied Neutral Satisfied Quality Quality Speed Appt. Dissatisfied Satisfied by Staff Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 14

Complaints - Defection Model What is the effect of complaints on Defection? Fig. 5: Complaints Handling-Defect Model Fig. 7: Complaints to Defection Profile Complaint Handling Resultant Behaviour ( total sums to 100%) Source: Beyond Philosophy Customer Experience Tracker (CET) 59% Continue 28% 31% Defect risk 42% Satisfied Percent of Complainers 10% Defect Make a complaint 32% 20% Continue 26% 54% Defect risk 19% Neutral 26% Defect 12% Continue 53% 43% Defect risk Continue or Dissatisfied use more Defect risk Defect 45% Defect Fig. 6: Complaints Outcome-Defect Model Fig. 8: Complaint outcome/handling effect on Complaint Outcome Resultant Behaviour behaviour 42% Continue Complaint Handling Complaint Outcome more Resultant Behaviour Use 40% 33% Defect risk Satisfaction with complaint Satisfied Dissatisfaction with gives a bigger handling complaint 25% Defect Make a complaint handling also gives a bigger positive effect than negative effect than with outcomes satisfaction 22% Continue dissatisfaction with outcomes 54% Defect risk 23% Neutral 24% Defect 13% Continue Defect 37% 43% Defect risk Highly Complaint Handling/Outcome Highly Dissatisfied 44% Defect Satisfied Dissatisfied Satisfaction Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 15

Customer Interactions and feedback Further evidence of poor complaint handling Customer interacts with company Customer expectations are not met Customer expectations are met Customer tolerates it Customer takes action Customer talks Customer walks Complaints Comments When customers inform the When customers share gripes with company directly of issues others via social media (1:Company) (1:World) 44% of customers show their discontent by talking to employees in a raised voice or by using sarcasm. 36% of customers engage in more violent behaviors such as slamming their fists, screaming, making threats, and using intimidation. Source: 2009 Customer Rage Study by California Review Management Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 16

Complaints Management – “net satisfaction score” How satisfied were you with the way How satisfied were you with the your complaint was handled? outcome of your complaint? Source: Beyond Philosophy Customer Experience Tracker (CET) % Satisfied 30% % Satisfied 30% Less % Dissatisfied 20% Less % Dissatisfied 20% Complaint Handling: 10% Complaint Outcome: 10% Net Satisfaction Score Net Satisfaction Score Fig. 9: Complaints Management – net satisfaction scores Complaint Handling Complaint Outcome Net Complaints Score 28% 0% 0% 12% -6% -11% -19% -11% -6% -17% -19% -1% -20% -28% -30% -32% -39% -52% Hospitality Utility/ Transport/ Fin. Health IT/ / Leisure Energy Retail Travel Other Insurance Svcs/ care Telco Banks Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 17

Complaints Management – “net satisfaction score” Source: Beyond Philosophy Customer Experience Tracker (CET) Results from a previous Beyond Philosophy CET study. 61% of customers say there is a problem in terms of consistency in handling issues yet only 23% of managers recognize the problem. 66% of organizations think they are honest and cooperative: but in contrast, only 15% of customers think they are! Fig. 9: Complaints Management – net satisfaction scores Complaint Handling Complaint Outcome Net Complaints Score 28% 0% 0% 12% -6% -11% -19% -11% -6% -17% -19% -1% -20% -28% -30% -32% -39% -52% Hospitality Utility/ Transport/ Fin. Health IT/ / Leisure Energy Retail Travel Other Insurance Svcs/ care Telco Banks Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 18

Complaints - Sensitivity Model What is the effect of complaints on the customer’s sensitivity to issues? Fig. 10: Complaints Handling-Sensitivity Model Complaint Handling Future Complaints Sensitivity Fig. 12: Complaints Sensitivity Profile Source: Beyond Philosophy Customer Experience Tracker (CET) ( total sums to 100%) 1% less sensitive 28% 58% no change Satisfied 57% Percent of Complainers 41% more sensitive Make a complaint 7% less sensitive 39% 19% Neutral 45% no change 48% more sensitive 5% less sensitive 4% 53% 28% no change Less sensitive: less More sensitive: likely to make a No change in Dissatisfied sensitivity more likely to make 67% more sensitive complaint in future a complaint in future Fig. 11: Complaints Outcome-Sensitivity Model Fig. 13: Connection between the complaint Complaint Outcome Future Sensitivity outcome/handling and future sensitivity 2% less sensitive Complaint Handling Complaint Outcome sensitive Less Future Sensitivity to More 40% 47% no change Satisfied 51% more sensitive Make a complaint 2% less sensitive Issues 23% Neutral 44% no change 54% more sensitive 7% less sensitive sensitive 37% 28% no change Dissatisfied Highly Complaint Handling/Outcome Highly 64% more sensitive Dissatisfied Satisfaction Satisfied Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 19

Original slide presentation can be found at Slideshare.net – Search for “Yours is a very bad hotel” Source: Hotel Chatter.com Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 20

Poll Does your organization do any of the following in social media? • Monitor customer comments • Monitor and respond to customer comments • Neither • I don’t know Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 21

Comments Profile Fig. 14: Comments by Channel Fig. 15: Comments by Sector ( ttotal sums to 100%) ( total sums to 100%) Source: Beyond Philosophy Customer Experience Tracker (CET) 67% 27% Percent of Comments Percent of Comments 17% 12% 11% 19% 9% 8% 14% 14% 7% 9% 7% 5% 4% 5% 5% Face- Customer Trans- Hospi- Fin. Linked- My You IT/ Utility/ Health Insur- book Twitter Rating Blog Other Retail port/ tality/ Svcs/ Other In Space Tube Telco Energy care ance Website Travel Leisure Banks Fig. 16: Comment Reason Fig. 17: Comments Management ( total sums to 100%) 41% Percent of People who Comment 47% Percent of Comments 36% 19% 28% 13% 9% 7% 6% 5% 1% Treat- Received Surprised Satisfied with Service Product Service Missed ment Price Other Policy response from company company’s Quality Quality Speed Appt by Staff the company responded response Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 22

Complainers who comment What percent of complainers also comment? Fig. 18: Comments/Complaints Ratio by Sector Source: Beyond Philosophy Customer Experience Tracker (CET) 50% 50% Percent of Commenters 45% 45% 40% Overall: 40% 39% 38% 29% 22% Trans- Hospi- Utility/ IT/ Fin. Health Insur- Retail port/ tality/ Other Energy Telco Svcs/ care ance Travel Leisure Banks Fig. 19: Comments/Complaints Ratio by Category 76% Percent of Commenters 49% 48% 41% 38% 29% 27% 20% Treat- Product Service Service Missed ment Price Policy Other Quality Speed Quality Appt. by Staff Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 23

Comments Takeaways • 40% of the people who complain also comment via social media • Focus on the quality of experience you provide. • Like complaints, the biggest reason for making a social media comment is “service quality”. • Accept that you may not have visibility of most of the comments made about your organisation - 48% of comments are made on Facebook. • Your best option is to create a Facebook presence that is interesting for customers such that you are able to observe their Facebook comments. • That is, your Facebook presence should NOT just be a place to leave customer feedback. • Respond to comments – just over a 1/3 of people who comment are “surprised” that they got a response and almost half are satisfied with that response. Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 24

Complaints Takeaways • Service quality and treatment customers (humanics) are the biggest reasons for complaints. • It is NOT price, or product quality. • You can affect about 40% of people who complain with the way you handle complaints. • Make a distinction between complaint handling and outcome. • Focus on complaint handling over complaint outcomes – it has a bigger upside if you get it right and a bigger downside if you get it wrong. • Unfortunately, organizations are currently too focused on outcomes rather than handling - the “net satisfaction score” of complaints handling is always worse than that of complaints outcomes. • People who complain become “sensitive” to future issues regardless of the complaint outcome or how it was handled – so handling complaints appropriately becomes even more important. Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 25

Q&A The Customer Complaints Experience Qaalfa Dibeehi, Chief Operating and Consulting Officer Zhecho Dobrev, Consultant Experience Tracker – 2010 www.beyondphilosophy.com

Further Conversation? Contact us... qaalfa.dibeehi@beyondphilosophy.com colin.shaw@beyondphilosophy.com zhecho.dobrev@beyondphilosophy.com London Office: 0207 917 1717 Atlanta Office: 1 678 638 6162 Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 27

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Complaints & Social Media Gripes

by Beyond Philosophy on Jun 29, 2010

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