What is complaint management?

Complaint Management

Even in the best organizations, it is difficult to predict the expectations and desires of each individual. Therefore, the majority of the target audience may be satisfied, but others may have dissatisfaction with the product or service. Sometimes what goes wrong is also related to manufacturing, delivery or supply. A product does not reach the customer as hoped or the service is not performed as previously planned. Mistakes are inevitable, but the fact that customers are then unhappy is easy to understand.

A functioning complaint management system is essential for any company to be more successful in the long term. This is because good contact with the customer and a high level of satisfaction can be maintained even after a fault. Furthermore, a well-designed process can significantly reduce the risk of delivery or production errors. Customer feedback is important so that the product can become even better in the future.

Definition: Complaint management

The term complaint management describes the handling of customer complaints within a company. The aim is to generate positive effects from criticism and to eliminate the causes of criticism in the interests of the customer. Thus, complaint or reclamation management is intended to strengthen customer loyalty and ensure quality assurance.

What is complaint management?

In every business, there are complaints from customers at some point. This is unpleasant, but unavoidable. As the company grows, the number of critics will often be as large as the number of friends – and this can quickly lead to a confused situation. At some point, the number of complaints becomes so large and the company structure so complex that a complaints management system is introduced.

If you don’t implement a well thought-out system, you could end up with a big mess, which could significantly impact your business success. If you ignore customer feedback, they will never choose your offer again and will tell others about their bad experience. In earlier times, only a handful of friends and family members were affected by such negative news, but nowadays, thanks to the Internet, such news can reach a much larger audience.

Complaint processing is standardized in Germany. DIN ISO 10002:2010-05 provides precise information on tasks and tools as well as definitions of technical terms.

The aim of complaint management is to respond to customer criticism in a targeted manner. Strategies should be in place to receive complaints, respond to feedback, and direct criticism to the appropriate departments or individuals. The division of responsibility is also part of claims management. In fact, negative criticism can only be appreciated positively if it is clear who is responding and when.

Complaint management is a component of customer relationship management (CRM). CRM is the basis for maintaining customer relationships and includes, among other things, the analysis of them.

The complaint management process includes the following steps:

A sophisticated complaint management process has two key objectives: to increase customer satisfaction and to ensure quality control. With the help of this process, we can reduce customer anger and increase customer loyalty. In addition, customer feedback can help us on the path to improving our products and services through claims management.

Tasks

The objectives mentioned above refer to the tasks and therefore also to the processes for handling possible complaints. Activities can be divided into two categories based on quality control and customer satisfaction. Several tasks are necessary to ensure positive customer contact.

Complaint management should be simple and straightforward for customers who are angry. They should contact the company and not post their anger on social media. Only through criticism can complaints be used positively. The first contact with the customer should be positive.

Customers are free to voice their complaints, in doing so they should not be made to feel bad. To do this, specially trained employees must be open to criticism and make disgruntled customers feel that their opinion counts. Processes must be clearly defined: Which feedback is forwarded to which department must be made clear. It is therefore the responsibility of complaints management to set up structures and assign roles. Respond positively to customer feedback. While some responses can help improve quality, others should occur immediately after contact with the customer. Decide in advance whether a discount or product replacement is appropriate. These actions contribute to the improvement of service quality in the medium term. There is no “standard complaint format” for customers. Therefore, each complaint must be reviewed for its content and the customer’s purpose in order to identify patterns, prioritize, and take appropriate action. Furthermore, comment management must be regularly monitored to identify potential problems and optimize procedures already in place.

It is important that decision makers have access to meaningful management control reports. Changes can be made based on these reports. Data collected by the claims management system often provides inferences. For example, data from complaints management often provide clues about quality control. These can then help improve manufacturing and service operations.

Framework

In order for complaint management to be successful, certain framework conditions must be met. First of all, an organizational structure is necessary. Receivables management is therefore an integral part of the business and should also be recognized as an important factor by management. It is important to clarify proper communication with other departments in the company. Then it is a matter of finding the right employees and training them accordingly – mainly in the area of direct customer contact. Employees should be trained in areas such as diplomacy and stress reduction to deal with stressful situations, as not all customers offer valuable constructive criticism. Finally, a functioning infrastructure is also part of the framework conditions. The main issue here is the provision of suitable IT systems. Software and hardware help employees interact with customers and keep the internal organization as organized as possible.

Processes

Companies need to create an easy way to respond to customer feedback when complaints are received. This can be done via a hotline, chat function or e-mail address. Responses can also be submitted online or by postcard. Companies must always clearly demonstrate this ability. This encourages customers to complain. When a complaint is received, we then receive it and process it further. In this process, the kindness and understanding of the qualified staff plays an important role. Make sure your customers also know what they should do after verification. It’s important for customers to know that you value their feedback and that it has led to change. However, for some, there may be more actions to be satisfied. Companies must carefully decide whether it is necessary to establish further communication to understand the impact of the client’s criticism. To achieve this, appropriate staff support facilities must be provided where staff work directly with the customer to offer, for example, discounts, replacements, repairs or other benefits.

Now internal tasks are being put into action. To this end, incoming complaints are analyzed, classified and then provided with proposed solutions in order to make changes within the company. Two auditing and reporting tasks then take place to review the effectiveness of the complaint handling process. For example, whether customer dissatisfaction is sufficiently reflected in the complaints submitted. As a solution, one could increase the willingness to complain.

Before sending to managers or other decision-makers, data processing is carried out by Receivables Management. In addition, the department also takes care of using the collected and processed information to improve quality assurance. There is the option of making minor changes in the short term that have little impact on the manufacturing process, as well as making fundamental changes in the longer term that affect the entire company.

The process explained: Complaint management in an example

Suppose your company produces t-shirts with printed designs. One customer is disappointed that the print fades after only a few washes. Therefore, the customer contacts your hotline and it is now up to you to satisfy him. Therefore, it is important to first listen carefully to what the customer has to say and then ask reasonable questions to emphasize both the seriousness of the situation and the respect for the customer. In addition, you will receive valuable information for further processing of the problem.

Support can figure out how best to help the customer by answering questions. Usually, in technical situations, the staff can provide support to fix the problem. Since the problem cannot be fixed here, as the imprint has already disappeared, the employee can only give advice on how to care for the T-shirts. However, to compensate the customer immediately, he will receive a voucher with which he can order another cup of his choice for free.

The evaluation of the complaints revealed that the defective imprints were primarily from one particular series. This information was passed on to the responsible production department. Controlling assessed the processes as good. However, most complaints are raised via the hotline, which is not cost-effective. Therefore, it was decided to promote the online form channel more strongly in the future and to simplify it.

All information is summarized in a report to familiarize third parties with complaint management. The report is responsible for preparing all the necessary information so that it can be easily interpreted. Management decides to increase the complaint management budget and asks the lab to continue experimenting with dyes to improve product shelf life.

Five tips for successful complaint management

In order to delight customers with excellent service, we’ve gathered a few more tips to help you stick to complaint management procedures. This already gives you a reliable system.

See complaints as an opportunity

Customer feedback is important for companies to grow and improve. By taking the time to listen to our customers’ complaints, we can gain valuable insight into our products and services. In addition, being responsive to customer concerns shows that we care about their satisfaction. It’s worse when customers are dissatisfied and don’t say anything because they may have already given up on us and we’d never know why. That’s why we recommend proactively asking for customer feedback. We should always respond positively to feedback, but improving our services based on customer complaints is often the best way to show that we are listening and care about providing a great experience. That’s why we make it easy for customers to contact us with their concerns and let them know that their feedback is important to us.

Listen attentively to the customer

Give the customer the opportunity to fully express their dissatisfaction. Avoid jumping to conclusions before you understand his problem. Sometimes the customer cannot describe exactly what is bothering him. Therefore, it is important to support him with proper listening and follow-through questions. This communicates to the customer that you notice them and will make the necessary adjustments to improve their experience.

Do not make the customer wait unnecessarily

Nothing is more annoying for dissatisfied customers than being stuck in a telephone waiting loop. For this reason, it’s important that companies respond quickly to their customers’ needs not only with phone service, but also with email feedback and social media. If this is ignored, customer anger can steadily increase until damage control is impossible. However, by establishing an effective complaint management system, such problems can be avoided.

Assume responsibility

It may be that the problem was not caused by your company or your product at all, but by the customer himself. It is not advisable to blame the already angry customer for his annoyance, because he is the one who contributes to the success of your business. At the same time, such a complaint can also serve as a great opportunity to improve your offer. Therefore, take full responsibility for the problem.

Focus on solutions

When a customer is dissatisfied, they usually want to both get rid of their anger and get a solution to their problem. It is important to understand the customer instead of just making them an offer. This keeps you in control and allows you to better estimate the costs incurred by offsetting. The solution can be adapted to the customer’s individual requirements, depending on its relevance.

Conclusion

Complaint management is essential for a successful company. Offering your customers genuine assistance and seeing criticism as an opportunity can have a positive impact on the way you deal with them. In this way, dissatisfied customers can be turned into loyal customers.