Any organization can maximize customer satisfaction by offering products and services of the highest quality to customers free of cost. This however, will make the organization unprofitable. Organizations must therefore optimize customer satisfaction. For every unit of investment that the organization makes to enhance customer satisfaction, there must be an equal or more amounts of revenues or profits generated.
It is therefore important for an organization to achieve optimization of its customer satisfaction scores and not maximization of customer satisfaction. Optimization will lead to positive business outcomes/profitability for the organization. Now, this has one big implication – if an organization looks towards optimization of customer satisfaction - that means there will always be some amount of dissatisfaction amongst the organizations customers. How should any service provider deal with this?
The answer is really quite simple – encourage customers to complain. The organization must strive to maximize customer complaints by providing many avenues and forums for the customer to complain. Why is this important? There are four reasons for this:
- Customer complaints are often a good indicator of what is going wrong and of the shape of things to come. A good understanding of customer complaints can provide several insights to the management not just about what’s going wrong in terms of people and processes, but could also provide ideas for new products and services.
- Customer complaints provide an opportunity for the service provider to resolve the customer’s problems on time and thus reduce dissatisfaction levels.
- It is common knowledge that those customers who had a problem and whose problem’s were resolved effectively, had stronger relationships and higher levels of loyalty compared to those customers who never had a problem! (Does this mean that the service provider should create problems for the customers and then resolve them effectively? The answer is No, since this would be quite an expensive way to build strong relationships. The service provider must build products and services that have no problems. However, should there be problems; the organization must have efficient and effective ways to resolve those issues).
- In today’s context where social media is available at every customers’ finger tips, any problem or unresolved problem gets lodged and discussed aggressively on social media, creating potential havoc for any organization besides providing ulcers to the customer service manager. It is much better that customers complain to you than plaster social media with their problems!
In many organizations, customers are not encouraged to complain, often inadvertently. Customers do not know whom to complain to? Or where to complain? Even if they do know these details, there are several barriers. For example try calling up the call centre of any telecom or of a credit card company and see if you can get through to them. Even if you are able to get through quickly, you will be confronted with the next big barrier - the IVR. Once you survive the IVR, in all probability, you will be put on hold for a few minutes before you can speak to the agent. If you are lucky your issue will be addressed. If not you will be asked to call another number or visit the nearest showroom (which could be several kilometers away). No wonder, most customers do not want to complain!
Incidentally, one of the thinking about customer satisfaction (especially with call centers) is to measure the effort exerted by the customer to get his/ her problem resolved! The challenge for any service provider is to make it convenient for customers to complain. This also implicitly tells the customer that the organization is interested in resolving their problems! Organizations should also have systems in place to resolve customer complaints quickly and effectively, once the customer lodges a complaint.
Real-time customer feedback
A real time customer feedback system at critical moments of truth can be a good way to capture and resolve customer problems. Such systems are available today at reasonable prices.
It’s not just about encouraging customers to complain. It is also about in some sense the organization culture of the service provider. The Customer Service Head, may want to show the CEO (his boss) that customer complaints are on the decline, since this aspect is one of his KRA’s. All the service head has to do is make it challenging for customers to complain and complaints will drop! One way to think about this is by making sure that the percentage of complaints is as close to the dissatisfaction levels as possible! In other words, if the survey results show that 20% of customers are unhappy, while only 5% of customers are actually complaining (based on actual customer complaints received), then there is a major problem and disconnect between intention and reality!
Net net – Service recovery is key in building strong customer relationships and maximizing customer complaints is the way to go! Make sure there is a service recovery capsule in your strategic relationship surveys.
Note: If you found this article interesting, you may find “The Little Book of Big Customer Satisfaction” interesting too. The entire royalty goes to charity.
Key Reference: Claes Fornell, The Satisfied Customer, Palgrave Macmillan, 2009