Complaints & Social Media Gripes

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

www.beyondphilosophy.com

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Beyond Philosophy © All rights reserved. 2001-2010 www.beyondphilosophy.com 2

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

We are Proud to Have Helped Some Great Organizations…

www.beyondphilosophy.com 4
Beyond Philosophy © All rights reserved. 2001-2010

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”


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)


Customer Interactions and feedback
Something is missing in the experience

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


Complaints Comments
When customers inform the When customers share gripes
company directly of issues with others via social media


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.


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


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


The Cost/Benefit of Getting Complaints Right

Source: The Customer Complaint Iceberg by Paul Qu


Poll

Does your organization monitor:
• Satisfaction with complaint outcomes
• Satisfaction with complaints handling
• Both
• Neither
• I don’t know


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

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%

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


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%)

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


Customer Interactions and feedback
Further evidence of poor complaint handling


Customer tolerates it Customer takes action


Complaints Comments
When customers inform the When customers share gripes with
company directly of issues others via social media

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


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?

% 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


Complaints Management – “net satisfaction score”

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


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

( 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


Original slide
presentation can
be found at
Slideshare.net –
Search for “Yours
is a very bad
hotel”

Source: Hotel Chatter.com


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


Comments Profile
Fig. 14: Comments by Channel Fig. 15: Comments by Sector
( ttotal sums to 100%) ( total sums to 100%)

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


Complainers who comment
What percent of complainers also comment?
Fig. 18: Comments/Complaints Ratio by Sector

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


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.


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.


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


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