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Recent research on customer complaints

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A breakfast presentation by Prof Francis Buttle delivered to the Society of Consumer Affairs Professionals (SOCAP). It reviews recent research into customer complaining behaviour. Presentation prepared in June 2009.

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Recent research on customer complaints

  1. 1. Society of Consumer Affairs Professionals<br />What&apos;s Hot <br />in <br />Contemporary Complaints Handling<br />Professor Francis Buttle © 2009 <br />
  2. 2. Society of Consumer Affairs Professionals<br />Journal of Marketing<br />European Journal of Marketing<br />International Journal of Service Industry Management<br />Journal of Consumer Marketing<br />Advances in Consumer Research<br />Journal of Marketing Management<br />International Journal of Operations and Production Management<br />International Review of Retail Distribution and Consumer Research<br />Managing Service Quality<br />Quality Assurance<br />Quality Management in Health Care<br />Marketing Management Journal<br />Journal of the Academy of Marketing Science<br />Journal of Health Care Compliance<br />Source materials<br />
  3. 3. Society of Consumer Affairs Professionals<br />Francis’s<br />mind <br />map<br />Rage<br />Emotions<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints<br />management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  4. 4. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  5. 5. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  6. 6. Society of Consumer Affairs Professionals<br />Business Case for Complaints Management<br />Journal of Marketing<br />Stock valuation<br />European Journal of Marketing<br />Customer retention <br />International Journal of Service Industry Management<br />Business performance<br />
  7. 7. Society of Consumer Affairs Professionals<br />Journal of Marketing<br />Examines the simultaneous effects of customer satisfaction and customer complaints on stock value gap<br />Stock value gap is the gap between a company’s stock valuation and that of the best-in-class competitor<br />Uses real-world data about the airline industry<br />American Customer Satisfaction Index<br />US Department of Transport<br />Center for Research in Security Prices<br />288 data points: 9 airlines x 8 years x 4 quarters <br />
  8. 8. Society of Consumer Affairs Professionals<br />Journal of Marketing hypotheses:<br />The higher the customer satisfaction for an airline, the smaller the SVG<br />Customer complaint has a stronger effect than customer satisfaction on the SVG<br />
  9. 9. Society of Consumer Affairs Professionals<br />Journal of Marketing hypotheses:<br />The higher the customer satisfaction for an airline, the smaller the SVG SUPPORTED<br />Customer complaint has a stronger effect than customer satisfaction on the SVG SUPPORTED<br />Managerial recommendations <br />Build a customer equity dashboard that measures both satisfaction and complaint<br />Focus on resolving and learning from complaints, not just building satisfaction<br />
  10. 10. Society of Consumer Affairs Professionals<br />European Journal of Marketing<br />Asks what drives excellent customer retention?<br />Examines influence of 4 factors<br />a documented complaints-handling process, <br />a customer retention plan, <br />a customer retention budget, and<br />an executive in charge of customer retention<br />Uses Australian survey<br />Dun & Bradstreet sample<br />170 participants<br />
  11. 11. Society of Consumer Affairs Professionals<br />European Journal of Marketing<br />Results<br />Only one of the 4 variables has a statistically significant relationship with excellent customer retention performance: the presence of a documented complaints-handling process.<br />Managerial recommendations<br />Implement a documented complaint-handling process<br />Consider ISO 10002 as a framework<br />
  12. 12. Society of Consumer Affairs Professionals<br />International Journal of Service Industry Management<br />Customer satisfaction<br />Customer retention<br />Complaint culture<br />Process improvement<br />Complaint processes<br />Financial performance<br />Employee retention<br />Employee attitude<br />Uses self-report data from a sample of UK companies participating in a benchmarking study<br />
  13. 13. Society of Consumer Affairs Professionals<br />International Journal of Service Industry Management<br />0.41<br />Customer satisfaction<br />Customer retention<br />0.58<br />0.90<br />0.74<br />0.75<br />0.65<br />Complaint culture<br />Process improvement<br />Complaint processes<br />Financial performance<br />0.84<br />0.67<br />Employee retention<br />Employee attitude<br />0.75<br />
  14. 14. Society of Consumer Affairs Professionals<br />International Journal of Service Industry Management<br />Conclusions<br />There is a statistically significant association between complaints handling culture and processes, and business performance<br />Process improvements and employee retention are more strongly associated with business performance than customer retention<br />Managerial recommendations<br />Ensure organizational learning from complaints data<br />Data collection, analytics and reporting<br />Make complaints processes staff-friendly<br />
  15. 15. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  16. 16. Society of Consumer Affairs Professionals<br />Which approach to complaint-handling has the more significant effect on customer satisfaction and loyalty?<br />USA; B2B and B2C<br />110 corporate participants, mail questionnaire focus on mechanistic/organic approach to complaint handling<br />550 customer participants (5 complainants per company), telephone questionnaire focus on satisfaction and loyalty<br />Organic or mechanistic?<br />
  17. 17. Society of Consumer Affairs Professionals<br />Results<br />The mechanistic approach has the stronger total impact on satisfaction and loyalty than the organic approach<br />A combined approach – both mechanistic and organic - has even more powerful effects<br />The mechanistic approach works better in B2C contexts than B2B<br />Managerial recommendations<br />Build a culture that values customer complaints<br />Develop formalized processes to capture, resolve and learn from customer complaints<br />Organic or mechanistic?<br />
  18. 18. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  19. 19. Society of Consumer Affairs Professionals<br />Sex<br />Do women have a higher PTC more than men? <br />Personality traits<br />Do people high in Machiavellianism have a higher PTC to complain than lows?<br />the use of amoral, manipulative, methods to get one’s own way, even at the expense of others<br />Do risk-takers have a higher PTC to than the risk-averse?<br />a willingness to take action when the desired outcome is not assured<br />Do individual differences influence propensity to complain (PTC)?<br />
  20. 20. Society of Consumer Affairs Professionals<br />Sex<br />Do women have a higher PTC more than men? YES<br />Women file relatively more medical malpractice claims<br />Women complain relatively more about advertising<br />Personality traits<br />Do people high in Machiavellianism have a higher PTC to complain than lows? YES<br />the use of amoral, manipulative, methods to get one’s own way, even at the expense of others<br />Do risk-takers have a higher PTC to than the risk-averse? YES<br />a willingness to take action when the desired outcome is not assured<br />Do individual differences influence propensity to complain (PTC)?<br />
  21. 21. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  22. 22. Society of Consumer Affairs Professionals<br />Justice seeking<br />Distributive justice<br />Complainants want fair and reasonable redress<br />Procedural justice<br />Complainants want the complaint-handling process to be fair<br />Interactional justice<br />Complainants want to be treated with courtesy and respect<br />
  23. 23. Society of Consumer Affairs Professionals<br />Emotions<br />
  24. 24. Society of Consumer Affairs Professionals<br />Customer experience<br />Justice perceptions<br />Emotional response<br />Customer complaint<br />experience<br />
  25. 25. Society of Consumer Affairs Professionals<br />Customer rage <br />is furious, overwhelming, <br />extreme anger accompanied <br />with expressions (physical, verbal, <br />non-verbal, displaced) and <br />potentially harmful behaviours <br />towards an organization following <br />a dissatisfactory customer<br />experience.<br />
  26. 26. Society of Consumer Affairs Professionals<br />Customer rage emotional clusters<br />Rancorous rage: disgust, scorn, contempt, resentment<br />Retaliatory rage: ferocity, malice, fury, rage, wrath<br />Customer rage expressions<br />Verbal rage: shouting, screaming, yelling<br />Physical rage: punching, slapping, stabbing, killing<br />Displaced rage: kicking furnishings, breaking equipment<br />Non-verbal rage: rolling eyes, puffing cheeks, red face<br />Constructive rage: offering advice or solutions<br />Customer rage behaviours<br />Exit behaviour: stop buying, boycott, <br />Revenge behaviour: vandalism, sabotage<br />WOM behaviour: tells friends, report to management, eWOM<br />
  27. 27. Rage<br />Emotions<br />Society of Consumer Affairs Professionals<br />Stock<br />valuation<br />Customer contact staff<br />Justice<br />Business case<br />Business performance<br />Customer complaints<br />Customer experience<br />Customer<br />retention <br />Individual differences<br />Complaints management<br />Mechanistic<br />Personality<br />Sex<br />Organic<br />Organizational culture<br />
  28. 28. Society of Consumer Affairs Professionals<br />Four major points to take away<br />The business case for handling complaints is very strong<br />Excellent complaints-handling processes supported by a supportive culture yields the best return<br />People who interact with complainants must be prepared for emotional as well as rational customer behaviour<br />The customer is not always right<br />
  29. 29. Society of Consumer Affairs Professionals<br />FourFive major points to take away<br />The business case for handling complaints is very strong<br />Excellent complaints-handling processes supported by a supportive culture yields the best return<br />People who interact with complainants must be prepared for emotional as well as rational customer behaviour<br />The customer is not always right<br />You’ll never be able to make a Machiavellian, risk-taking woman happy. <br />
  30. 30. Society of Consumer Affairs Professionals<br />Thank you<br />Comments or questions? <br />

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